Tired of 'Free Lunch' Invitations Offering Free Financial Advice? State Securities...

Tired of 'Free Lunch' Invitations Offering Free Financial Advice? State
Securities Commission and AARP Provide an Alternative

HARRISBURG, Pa., June 1 /PRNewswire/ -- "Get priceless information that will
protect your financial security," the nicely printed invitation read. "Win
FREE prizes and enjoy an incredible dining experience including an open bar!"

If you're like many Pennsylvanians at or nearing retirement age, you may be
receiving one or more mailers like this every month and wonder how and why so
many financial experts can afford to be so generous - unless there's a catch.
And, according to the Pennsylvania Securities Commission, there often is. And
that's why they are joining with AARP in urging some senior citizens to do
something about it.

"AARP - the American Association of Retired Persons - is organizing a 'free
lunch monitor' program as part of a nationwide campaign in cooperation with
our national organization, the North American Securities Administrators
Association," said Bob Lam, chairman of the Pennsylvania Securities
Commission. "We are asking these volunteers to use a simple checklist to
differentiate as much as possible between bona fide financial seminars and
those using high pressure and unscrupulous sales techniques."

Commissioner Tom Michlovic said, "Four out of five investors age 60 and over
got at least one of these invitations in the past three years and three out of
five received six or more. I'm confident some of the financial advisers
involved give good, unbiased advice but the events that don't - the ones that
we hear about - are of great concern."

Too often, the free meal comes with a hard sales pitch, said Steven Irwin, the
third member of the commission. "Not all financial products or investment
types are appropriate for people nearing or already of retirement age," Irwin
said. "Licensed brokers have an obligation to identify and recommend suitable
investment vehicles."

Lam explained that senior citizens who want to provide a public service can
log on to the AARP website and sign up to become a free lunch monitor and
learn what to watch out for at such a session. "They can log on to
www.aarp.org/nofreelunch and find out how easy it is to participate," Lam
said.

"Because nothing is ever really free, people have to be prepared to ask tough
questions at these 'free meal' seminars," Michlovic said. "Just for starters,
you need to ask about the risk level of any investment. You need to ask if
there are any up front costs involved - or withdrawal cost or liquidation or
surrender fees."

Irwin said one of the easiest questions is, "Is this investment suitable for
me or someone like me." He said, "The key word here is suitable because it
has a specific legal meaning in securities law. And the best answer would be
that they can't be sure it's a good investment for you until they get more
information about your personal situation."

Even if an individual doesn't want to serve as a "free lunch monitor," there
are two or three things to keep in mind when attending such a seminar, the
commissioners advise.

"First, decide now to decide later," says Lam. "Don't make any commitments or
sign any documents during the event. If it's a good deal, it can wait a few
days or weeks."

Michlovic advised participants to "get a second opinion." He said, "We're
talking about your financial health" and likened signing financial papers to
committing to a major medical procedure.

"Don't turn over any of your financial records until you fully understand what
they are selling and have confirmed that they are licensed to sell it by
checking with the Pennsylvania Securities Commission or other regulatory
agency," said Irwin.

Potential investors can find a wealth of public information about securities
broker-dealers and investment advisors by calling the PSC's toll-free consumer
hotline at 1-800-600-0007 or logging on to www.psc.state.pa.us.

SOURCE Pennsylvania Securities Commission

Mike Byrne, chief counsel of Pennsylvania Securities Commission,
+1-717-783-5177