I went to the free steak dinner so you don't have to
Experiencing the wealth management sales pitch
I accepted an invitation from a financial advisory firm for a “DeRisking Retirement Seminar” to hear their sales pitch at a nearby Ruth’s Chris Steak House. It was a good opportunity to experience the hard sell combined with the free steak dinner.
The Pitch
The presenter looked younger than the children of the ~25 retirement-age attendees. His credibility to speak on issues of retirement seemed questionable but his presentation was so smooth and well-honed that age didn’t matter. He knew all the rhetorical tricks:
FUD (fear, uncertainty, and doubt). If you were to have any chance of safely navigating through the minefield of retirement, you need a plan (from them).
Metaphor — losing at basketball, doing PT to recover from a shoulder injury, and climbing up and down Mt. Everest all somehow tied back to de-risking retirement. I was never entirely clear on the connection other than, it’s good to have a plan.
Parable — he told stories of some clients who listened to their guidance and others who wished they had, along with lots of charts and tables that seemingly reinforced the same point… you need a plan.
And, if you didn’t have a plan, he gave examples of what could go wrong:
not signing up for the survivor benefit on your work pension and then dropping dead shortly after retirement and leaving behind a pension-less widow after a lifetime of hard work
retiring into a down market compared to a brother who retired into an up market (yes, the point of this was confusing)
paying high taxes on IRA distributions because you have a multi-million dollar IRA (sounded like a nice problem to have)
having the stock market go down
and everyone’s greatest fear, running out of money before you run out of time
The presenter did not cover some issues — most importantly, he didn’t take questions nor discuss their fees.
Their Sales Process
They have a slick sales funnel.
First, an old-fashioned mailing, then phone-qualifying anyone who signs up (to confirm their age and investable assets), then the one hour pitch before dinner, and then immediately scheduling a 15-minute personal follow-up phone call for anyone in the room. If the phone call goes well, they then move on to a one hour video call with a “senior advisor” who closes the deal.
It’s impressive.
My takeaways
First, if you’ve considered attending one of these “seminars” hoping to learn a thing or two and get a few questions answered, you’ll be disappointed as it’s a pure sales pitch. To discuss anything specific to your circumstances, you’d need to schedule the phone call and/or video call. But, you can skip the dinner and just do that anytime.
Second, as I’ve written about, these services are expensive. I asked about fees afterward and their asset management fee is 1% to 1.5% and the cost of developing and delivering a full financial plan is $1,000 to $2,000. Someone has to pay for the steak dinners.
Third, laypeople are understandably nervous about how to financially manage their retirement and events like this effectively prey on these fears. You’ll probably feel even more scared and ill-equipped after listening to them for an hour. But there are better ways to get your questions answered and learn what your options are for developing a sustainable financial strategy for retirement.
For readers in the Boston area, I have two classes on Saturday November 11th on related topics — Financial Planning During Retirement and Evaluating and Compensating your Financial Advisor. To learn more about either, click on the links or be in touch. No steak dinner and no sales pitch but unlimited Q&A.
Great combination of financial insight and humor! Thanks Jimmy!!
Thanks, we just got the postcard!