Ever find yourself getting tricked into a free dinner offer to listen to some “enticing” financial topic? It just happened to me, and I am on the lookout for scams like this all the time. Listen to my story.
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A Deceptive Invitation
Last week, I received a mailer from Fleming’s Steakhouse. For anyone familiar with Fleming’s on the Main Line in Philadelphia or the surrounding area, you know it has great food and offers a wonderful, albeit pricey, dining experience. So, I was intrigued when I received the mailer because it looked like it was from Fleming’s. I thought there might be a special offer inside, maybe for loyal customers who had dined there before.
The Sales Pitch Disguised as a Free Meal
When I opened the mailer, I quickly realized it wasn’t an offer for a free meal, discount, or even a coupon. Instead, it was a cleverly disguised sales tactic. It invited me to a free meal at Fleming’s, but there was a catch: attendees have to sit through a presentation where a salesperson tries to sell insurance and annuity products.
How Do They Afford This?
You might wonder, “How can they afford this? Fleming’s is expensive.” Well, here’s how: when someone buys an annuity product—actually, I should say when someone is sold an annuity product—the agent selling it earns a huge commission. Annuities might not even be the best investment option for you either—most times they are not!
As a fiduciary, I don’t sell products for commissions, but the agents who do make a substantial profit on these products. The problem is that, technically, you don’t pay the commission; the agent is paid by the issuing insurance company. However, these commissions come at a cost to you in the form of surrender charges.
The Hidden Costs of Annuities
Surrender charges can last anywhere from five, ten, or even fifteen years or more. If you need to withdraw your money early, you could face steep penalties. That’s how they afford to provide these free dinners—they’re banking on the hefty profits from these long-term contracts.
My Experience: Even I Was Fooled
The point of my story is that I was duped. I’m a financial advisor and have been one for 30 years, but even I thought it was a legitimate mailing from Fleming’s. Just imagine how many others think they’re getting an exclusive offer from the restaurant, only to find themselves stuck in a high-pressure sales pitch for annuities.
Final Thoughts: There’s No Such Thing as a Free Meal
So, be careful. If you’re invited to a free dinner, there’s usually an ulterior motive. Make sure to read the fine print and be cautious when you hear the pitch—it may not be in your best interest at all.
