HOW LUCKY I WAS to be the recipient of a dinner invitation to Ruth’s Chris. I love a sizzling ribeye, so I booked my seat at the event. Those nearing and in retirement have a good idea of what I’m referring to—the good old annuity sales presentation.
These dinners are put on by financial advisors looking to expand their business. The routine goes like this: Invite prospects, present for an hour on the benefits of owning insurance or an annuity, and then let the guests enjoy their meal while attempting to book appointments.
It must work because these invitations are distributed all the time, though usually not to millennials like me. More often, it’s affluent couples in their 60s who get the flyers in the mail.
What I find interesting at these gatherings—I’ve been to a few—is the advisor’s sales tactics. I’m reminded of the strategies detailed in Influence, Robert Cialdini’s bestselling book:
- Reciprocity. “The advisor is kind enough to buy me a $100 meal? The least I can do is hear him out and perhaps buy his product if it sounds helpful.”
- Social proof. “I see couples making appointments. Oh, and table No. 1 has a few existing clients of his. They look like happy people. Maybe I should give him a chance.”
- Commitment. “Well, I RSVP’d to this dinner and now I’ve hesitantly booked an appointment. I might as well follow through and trust this guy.”
- Authority. “He has the credentials and his points make a lot of sense. And those were some scary stock market predictions. I sure don’t want to lose my retirement assets in the next crash.”
I never booked an appointment. I always leave these events worried for that innocent older couple who clearly don’t have a plan.
Such dinners underscore the value of true fiduciary financial advisors—some of whom even host such presentations with all the right intentions. Individual investors just need to be careful and remember to do their due diligence when choosing an advisor. Otherwise, that free steak could turn out to be mighty expensive.
Mike Zaccardi is a freelance writer for financial advisors and investment firms. He’s a CFA® charterholder and Chartered Market Technician®, and has passed the coursework for the Certified Financial Planner program.