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HOW LUCKY I WAS to be the recipient of a dinner invitation to Ruth’s Chris. I love a sizzling ribeye, so I booked my seat at the event. Those nearing and in retirement have a good idea of what I’m referring to—the good old annuity sales presentation.
These dinners are put on by financial advisors looking to expand their business. The routine goes like this: Invite prospects, present for an hour on the benefits of owning insurance or an annuity, and then let the guests enjoy their meal while attempting to book appointments.
It must work because these invitations are distributed all the time, though usually not to millennials like me. More often, it’s affluent couples in their 60s who get the flyers in the mail.
What I find interesting at these gatherings—I’ve been to a few—is the advisor’s sales tactics. I’m reminded of the strategies detailed in Influence, Robert Cialdini’s bestselling book:
I never booked an appointment. I always leave these events worried for that innocent older couple who clearly don’t have a plan.
Such dinners underscore the value of true fiduciary financial advisors—some of whom even host such presentations with all the right intentions. Individual investors just need to be careful and remember to do their due diligence when choosing an advisor. Otherwise, that free steak could turn out to be mighty expensive.
I’ll admit it. I’ve attended several. I once heard the speaker assure the group that they would pay him no commission for purchasing an annuity. He explained that his commission was paid to him by the insurance company. I wanted to get up and say “so there is such a thing as a free dinner.” But I kept quiet and finished eating my steak.
Same thing the guy said at mine! I wanted to say, “well, I buy the product from you and the company, the company pays you, so money is coming from me to you in a sense.”
I went to a couple some years back, partly because friends were going. None of us bit on anything but food. These days I’m tempted to go and ask awkward questions. Do you do that?
I have to bite my tongue sometimes. I don’t want to cause drama.
I’ve also been to a couple, more out of curiousity than anything. Since I’m eating their food, I have avoided causing a stir. That calculus would change if I felt they were trying to take egregious advantage of people’s ignorance.
It’s a very clever marketing plan. Only those who are naive enough to believe they are getting a free meal will come, and they are ripe for the plucking. It’s not just financial planners – estate lawyers run these things too. If you ever meet someone with $1 million in assets who has an estate plan worthy of Bill Gates, you’ll know they went to one of these seminars.
We never go to these “free” dinners because it may be the most expensive dinner we have ever had.