What You Should Know About Free Dinner Seminars Offered by Financial Advisors
What's the Catch With Free Dinners from Financial Advisors? Often It's You!I get 2 or 3 direct mail pieces each month from financial advisors offering a free dinner seminar. Every mailer seems to feature a “fear factor” call to action – usually some current event that spells doom for your hard-earned retirement nest egg.
What's the Catch With Free Dinners from Financial Advisors? Often It's You!
I get 2 or 3 direct mail pieces each month from financial advisors offering a free dinner seminar. Every mailer seems to feature a “fear factor” call to action – usually some current event that spells doom for your hard-earned retirement nest egg. Here are two examples from mailers I got this weekend:
How the war in Ukraine could affect your portfolio and finances over the next several years.
Stock Market Correction: Are you prepared for a market downturn?
It’s a well-known refrain in the news business that “if it bleeds it leads.” I think when it comes to advisor marketing some believe in a similar approach – “be sure to scare, it puts butts in chairs.”
How Financial Advisors Use Influence
If you are unsure where to turn for sound financial advice, these offers may have appeal. But let’s look at this sales tactic from a different perspective. Robert Cialdini is a noted researcher on influence and these free dinners are a textbook example of how the host can use social influence to produce a desired result – in this case signing a new client.
These dinners usually exploit the following means of influence:
Reciprocity – by accepting the offer of a free dinner we are automatically primed to reciprocate in some way. Some advisors combine a free dinner with a “free consultation” or a “free book” that further tilts the reciprocity scales in their favor. If you decide to attend such a dinner, perhaps tell yourself beforehand that you are giving the hosts 90 minutes of your time in exchange for the dinner. Research suggests this technique makes you less likely to succumb to the sales pitch.
Social Proof – these dinners often include 1-2 existing clients of the advisor. Why? Because they provide living, breathing examples of someone just like you. The advisor often mentions the clients by name and thanks them for the opportunity to work with them for the last so many years. This strategy does two things – it bestows a mantle of authority on the advisor, and it confirms that you, the prospect, are a candidate to be in their tribe. Think of social proof as canned laughter, designed to ever so slightly lubricate the sales wheel.
Scarcity – at the conclusion of the dinner the advisor is likely to extend an offer of a free consultation. The offer usually comes with an element of scarcity:
for a limited time – “if you call our office in the next 2 weeks, we’ll do a free analysis of your current plan.”
for a limited number – “the first five attendees to sign up will get a free analysis of your current plan.”
It might be worth asking, if it essentially takes bribing people to attend, how valuable is the content anyway?
If you’re looking for a financial advisor, we’d skip the free dinner. We recommend working with a CFP, one who ONLY works in a fiduciary capacity and one who is a member of NAPFA or XYPN.
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