It is no secret that some firms try to use the "free lunch" seminars to attract elder clients to high-fee investment products. The SEC recently noted that it will be, through the examination process, targeting firms who frequently sponsor these lunches that target the elderly as new clients.
Although the SEC noted that there is nothing wrong with providing free lunch seminars, the unfortunate reality is that the SEC has found that these lunches are being used to market to the elderly or to gain information about potential clients to then market them further through one on one contact.
Likewise, the SEC is focusing once again on senior designations that some advisors slap next to their names. In some circumstances, these designations are bogus and/or incomprehensible. Yet, some advisors still try to use them to attract an older clientele.
The SEC and FINRA are both focused on the graying population and the potential abuses that occur with this segment of our society. If your firm markets through free lunches, it makes sense to reexamine that program, especially if you are targeting older clients.
For one, you should be looking at the products that those elder clients are then buying. If they are buying high fee products, you may be going down the path to examination heartache.
Similarly, you should pay particular attention to any designations your advisors are using. Best practice would certainly suggest that you only allow advisors to have designations that are provided by well-known and scrupulous organizations after some formal exam process, and not out of box of cereal. The box of cereal designations will only land you in hot water.
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