State securities regulators and insurance commissions are placing “free lunch or dinner” seminars on the top of their watch list. Seminars and lead generating materials that offer a free meal are under heightened scrutiny by regulators and have quickly become one of the most regulated areas of financial marketing — especially those that target seniors.
The following points are some of the most published requirements of regulators. This list is not meant to be all inclusive or to provide approved ways of marketing since each piece of marketing material is different and all states have various regulations.
- All invitations, promotions and communications offering a meal must disclose that a licensed insurance agent is involved and that insurance products may be discussed or offered for sale, at the event or at a later time.
- Agents may not use materials that contain exaggerated or misleading claims, or that are intended to pressure the consumer into making an immediate decision.
- Any reference in materials that suggest the involvement of a regulatory or governmental agency, or any organization that focuses on seniors is prohibited.
- Any reference to a seminar being educational is a red flag to a regulator. All seminar material needs to fully disclose to the consumer that they may be solicited to buy a life or annuity product in the future. The overall objective of any seminar is to lead to a potential sale so no seminar is ever viewed by a regulator as educational only.
- Advertisements or mailers that invite consumers to attend a seminar must contain a disclosure that states this is an insurance and sales presentation.
What is considered a seminar?
Seminars are defined very broadly to include any public speaking appearance in which agents are involved in as either:
- A speaker at the event.
- An organizer or facilitator of the event, including client appreciation events.
- Any event in which a presentation is given to more than one client or prospect.
The following pieces were published by North American Securities Administrators Association (NASAA) and highlight the most common areas of concern for consumers when it comes to lunch or dinner seminar marketing materials. These areas of caution for consumers are the same red flags regulators are zeroing in on.
The full article by NASAA can be viewed here http://www.nasaa.org/1950/senior-investor-alert-free-meal-seminars/.
If you have questions about compliant advertising and marketing practices please reach out to our compliance team at ComplianceConnection@biltd.com. We are here to help you succeed.
This information is intended for Financial Professionals who are insurance licensed only. If you are securities licensed please contact your Broker Dealer for their requirements.
These educational pieces are intended to be informative and provide generalized guidance. They should not be construed as legal advice or provide protection against compliance violations brought on by a consumer or state insurance commission. It is the sole responsibility of the financial professional to seek compliance or legal direction specific to their individual situation. These pieces should be used as a means to raise awareness and evaluate business practices.
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