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How to extinguish problems with free-lunch seminars and senior designations

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Financial-services regulators are doing a slow burn about two widely used marketing techniques: free-lunch seminars and senior designations. After clamping down on abuses in the mid-oughts, they are now concerned that pockets of advisors are still scorching retirees’ financial security, using these common, but sometimes deceptive, sales techniques. Are you as amazed as I am that we’re still having this discussion?

In reading news reports out of the Securities Industry and Financial Marketing Association conference this past November, I was struck by how regulators are far from putting away their fire hoses when it comes to these techniques. Consider these comments:

Joseph Borg, director of the Alabama Securities Commissions and prior two-time president and current board member of the North American Securities Administrators Association, has seen a shift from using lunch seminars as a broad marketing tool to one that identifies and targets specific seniors on a one-on-one basis. He calls this a “real danger.”

Kevin Goodman, national associate director, U.S. Securities & Exchange Commission adds, “There is an undeniable correlation between conducting (free lunch programs) and higher incidents of problematic behavior.” He also believes “there’s nothing in-and-of-itself wrong with using a senior designation. But when (advisors) start to really exaggerate what it means to have that credential, (there’s a) huge correlation with problematic behavior.”

Furthermore, consumers don’t understand senior designations, says FINRA’s Ann-Marie Mason, director and counsel in the litigation and policy unit of the Regulatory Operations Department at FINRA. “There’s no common nomenclature and no common educational requirements surrounding (them), so I think (they) will continue to be a focus …”

The good news? It seems they believe mainstream advisors have cleaned up their acts. So why obsess about the rogue fringe? Because they affect what the media decides to cover, which directly affects the reputation of large insurers and investment firms and indirectly affects all advisors’ ability to get people to attend their seminars and request office interviews. And if prospects become increasingly dubious about financial credentials, advisors will have an even harder time building trust.

For example, consider what prospects are seeing in the media these days:

  • “The Worst Deal in America — Free Lunch Seminars for Seniors.” –
  • “Don’t Let Free Lunch Seminars Give You Financial Heartburn” –Yahoo Finance
  • “Financial Advisers Abusing Senior Specialist Labels” –U.S.
  • “Watch Out for ‘Senior Specialist’ Financial Advisers” –

So should you toss your seminar scripts and designation certificates on a bonfire? Hardly.

See also: Why seminars still work

First, start viewing non-compliant advisors as seminar interlopers stealing food off your attendees’ plates. In other words, get serious about advisors whose flawed seminars are making your own events less productive and whose phony designations are depreciating the legitimate value of your own educational achievements.

Second, double down on your own seminar compliance. Make sure your marketing materials accurately identify you and make clear what products or services your firm provides. Most importantly, avoid using your seminars to explicitly hype products. Instead, focus on providing general financial education that “disturbs” people enough to come see you.

Third, make sure your own professional development efforts are as rigorous as possible. This means pursuing legitimate designations with accredited curricula that require a substantial effort in order to pass.

Because when all is said and done, slow-burning compliance issues have a way of flaring up and singeing everyone nearby. To protect your ability to use seminars and specialized designations in the future, be sure to read Part 2 for more detailed guidance.

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