Monday, September 19, 2011

Beware of Misleading Seminar Invitations

I received an invitation to a steak dinner over the weekend! It happens to be at a very popular place here in Jacksonville and it is not cheap either. I told my wife when I received it that..."what do you want to bet that this person does not even have an office of his own, is not licensed as an investment adviser and probably not licensed with a broker-dealer either?" She did not want to bet me, because she knew that I was probably right.

The postcard invitation implies investment expertise. The name of the firm listed is "__________ Financial Strategies" There is a slogan for the firm that uses the word "Wealth" in it, which again implies investment expertise.

One of the bullet points on the postcard says the following:

If I can stop you from paying taxes on money in Stocks, Bonds, Mutual Funds and CD's by redirecting - you would keep more of your money.

The other bullet points told me that this was probably an insurance agent. Being a compliance oriented person, I know how to check people's backgrounds. First I went to the SEC site, located at An investment adviser search for the firm name and the "advisor's" name (don't make me laugh) turned up nothing.

Then, I thought, surely this guy is affiliated with a broker-dealer. So, I went to the FINRA Broker Check site located at and did a search for this "self annointed advisor" who is going to advise people on when to "redirect" their stocks, bonds, mutual funds and CD's. Again, I was sadly disappointed to not find any record of this advisor.

Lastly, I knew that I could look up his insurance record to see if he is insurance licensed. Sure enough, he is licensed with a boat load of insurance companies a lot of whom are in the annuity business. Now, there is nothing wrong with earning a living. However, I do not take to kindly to people who break the rules while we ethical people in the business adhere to the rules.

An insurance agent cannot advise people whether or not to sell their stocks, bonds, mutual funds, or any other investments. They are NOT LICENSED to do so. Apparently though, they have no problems implying that they are licensed to do so.

Sadly, several people will go to this seminar. This advisor will get some appointments out of it and most likely will convince some of these people to sell their stocks, bonds and mutual funds and buy the annuities that he has as his end game. In doing so, he will violate the rules around investment advice in Florida, but he will probably get away with it.

When I was the former branch manager at Charles Schwab, we used a location in the same building as our Schwab office for client seminars and meetings. Strangely, this advisor has this same address as his office. I recognized the address on the postcard right away as the same address. This office and meeting complex is one of those places that rents offices to business people for their appointments. The postcard implies that this is his office which is not true. When you go into this office and seminar complex, you will think that this is his office, unless you are like me and have been there before. Is it just me, or is this just a tad bit misleading?

Let's evaluate this, shall we? If he is misleading on his postcard about his licenses and qualifications and he is misleading on his office location, or lack thereof, then what else might he be misleading about? He has no qualms about implying investment expertise. He has no qualms about implying that he has an office in a four star office building. Can you really expect ethical objective advice from someone like this? I'll let you answer that question.

My wife was smart not to bet with me on this one. I was right on with my analysis. No investment adviser license, no affiliation with a broker-dealer and no registered representative license. Further no office! Only an insurance agent trying to sell everyone he meets annuities. This is just a wee bit of a conflict of interest, don't you think?.

Readers of this blog will know that doing business with banks, insurance agents and Wall Street firms benefits them, not you. The best choice is to use a registered investment adviser who does not work for a bank, who is an insurance agent only (not licensed to give investment advice) or who works for a Wall Street firm. Even if it is not me!

I will be able to look across the street and watch the herd go in for their steak dinners this week. The restaurant is right out my office window. If only they did a little research ahead of time, then they would have stayed away. Perhaps, they would have saved themselves a lot of headaches, too.

Until next time.