Steak Dinners and Retirement Planning

Bill Parrott |

Now that restaurants are open and people are vaccinated, I've received several invitations to attend retirement workshops at local restaurants. Recently, I received one for a retirement planning seminar at Flemings Prime Steakhouse to help me eliminate taxes in retirement. Sounds yummy.

The mailers are elaborate with beautiful pictures of steaks and lakes. The flyers even come with tickets attached. Most firms that hold these seminars aren't offering retirement planning, but instead, they're selling expensive annuities or whole life insurance policies.

These firms typically spend several thousand dollars to host one steak dinner. For example, to get an audience of 50 people, they'll send 10,000 mailers. The mailing will cost about $5,000, and the dinner could add another $8,000. If they host their event at a hotel, it may add another $1,000 to the cost. So, all in, it may cost $14,000 or more to host an event.

Why do firms spend $14,000 per month to offer free retirement workshops? Because it's profitable. If their guests purchase $1 million in annuities, the sales representatives may generate $50,000 or more in commissions! If they sell a few insurance policies, they'll recoup their cost and make a substantial profit.

If you attend one of these gatherings, here are several questions to ask the speakers.

  • Are they fiduciaries?
  • What is their financial planning process?
  • Do they offer a free consultation?
  • Do they own the investments they're recommending?
  • What is the total cost to buy the product they're selling?
  • How do they get paid?
  • Is there a fee to redeem your investment if you need access to your money?
  • Are there alternatives or less expensive investments to the ones they're recommending?
  • Do they work with multiple insurance carriers?

If you have questions about retirement or Social Security, meet with a Certified Financial Planner (CFP)® who charges a flat fee or hourly rate. CFPs are fiduciaries, and they are required by law to act in your best interest and disclose any conflicts of interest – not so with brokers or insurance agents. In addition, most CFPs offer free consultations before starting the planning process, and you are under no obligation to act on their recommendations.

The fall is seminar season, so be on guard for elaborate mailers offering "free" dinners. If you live in a high-income zip code and you're over 50, you're a prime target for these firms.

Caveat Emptor.

Beware of false prophets, who come to you in sheep's clothing but inwardly are ravenous wolves. ~ Matthew 7:15

September 21, 2021

Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level. PWM's custodian is TD Ameritrade, and our annual fee starts at .5% of your assets and drops depending on the level of your assets.

Note: Investments are not guaranteed and do involve risk. Your returns may differ from those posted in this blog. PWM is not a tax advisor, nor do we give tax advice. Please consult your tax advisor for items that are specific to your situation. Options involve risk and aren't suitable for every investor.