After attending an investment seminar, George Painter, 59, rolled over a tidy pension fund at SBC Communications Inc. into a speculative stock...

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KANSAS CITY, Mo. — After attending an investment seminar, George Painter, 59, rolled over a tidy pension fund at SBC Communications Inc. into a speculative stock account with hopes of retiring early.

Instead, he lost $300,000.

Painter, a former cable splicer, now mows the lawn at a Leavenworth, Kan., church while his wife, Barbara, works for a travel agency.

They also refinanced their house to make ends meet.

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“We’re getting by, but we have to rob Peter to pay Paul,” Painter said.

He and his wife hope to stretch their $34,000-a-year income until he reaches 62 and can get Social Security.

Thousands of people tell similar sad tales.

They blew millions in hard-earned retirement savings on failed financial plans that they were led to believe would let them live the American dream.

Now, they are back at work — often at menial jobs — to pay the bills.

How to avoid costly missteps

Be wary of sales pitches that offer a one-size-fits-all plan.

Don’t say yes to investments you don’t understand.

Ask about surrender fees that can tie up your investment for years.

Monitor investments and ask tough questions about risks.

Make sure you have enough money to purchase an investment product.

Find out all the fees you may have to pay.

Make sure you can get at your money in an emergency.

Know your risk tolerance, what you can afford to lose.

Regulators say thousands face similar fates as they chase after promotions at trendy retirement seminars that are often too good to be true and are subject to little or no regulation.

“It’s a huge problem,” said Joseph Borg, director of the Alabama Securities Commission and chairman of the enforcement section of the North American Securities Administrators Association.

Regulators say most investment advisers have their clients’ interests at heart.

And seminar promoters say consumers too often fail to take responsibility for their own bad choices.

But Borg and other regulators say many consumers nearing retirement age are lured into unsuitable investments that quickly sink while the seminar promoters reap big commissions.

The concerns come at a time when debate rages over whether to allow workers to divert part of their Social Security taxes into private investment accounts, which would be vulnerable to the whims of the market.

More workers also are looking at alternatives to their companies’ pension funds, which no longer promise the security they once did.

Regulators first saw a flood of complaints after the stock market imploded in 2001.

Gerri Walsh, deputy director of investor education at the Securities and Exchange Commission, said the SEC is still hearing complaints “about investment seminars and high-pressure tactics to get people to invest in inappropriate products.”

Many new complaints involve variable annuities, described as mutual funds wrapped inside an insurance policy, which are being sold as alternatives to the stock market.

Investor complaints filed with the National Association of Securities Dealers (NASD), a self-policing trade group, increased from about 3,500 in 1990 to nearly 9,000 in 2003 — falling only slightly last year. NASD arbitration cases brought by consumers who claimed they were placed in unsuitably risky investments tripled between 2000 and 2004.

“I feel like I’m running triage for people who have lost a lot of money,” said Leawood, Kan., lawyer Diane Nygaard, who has filed lawsuits and NASD complaints on behalf of more than a dozen clients who said they were bilked by seminar promoters and investment advisers.

“We call them cancer clusters,” said Philip Aidikoff, past president of the Public Investors Arbitration Bar Association in Norman, Okla.

He calls it “cancer” because of the way news about a hot, new retirement seminar or persuasive investment adviser can spread quickly among employees of large companies.

Part of the problem is there are few rules governing seminars.

Regulators have authority over an investment adviser’s sales practices.

And advisers are obligated to avoid recommending unsuitable investments involving more risk than their clients can handle.

But what’s “suitable” for a particular investor often is hard to define.

“It can be difficult to prove what is and is not suitable,” said Wiley Kannarr, associate general counsel for the Office of the Kansas Securities Commissioner. “You can’t just say something is a better option.”

Darrin Wolff, an investment representative for Edward Jones and an NASD arbitrator, said an adviser’s goal should be a diversified portfolio that weathers market fluctuations.

Wolff said the problem with some seminars is they take “a cookie cutter” approach, pushing products that may not fit everyone’s needs, but which generate big commissions.

Deborah Stovall, 49, attended an investment seminar after retiring early from Hoechst Marion Roussel. She lost $250,000. She recently got a job as a cashier at a Price Chopper grocery.

Stovall is one of nearly a half-dozen investors who filed complaints against the investment-seminar promoters. The Missouri Securities Division also opened an investigation, said Mary Hosmer, assistant commissioner of the securities division. The case is ongoing, she said.

“They told me the market fluctuates,” Stovall said, “that the market will come back and make me even more money. It didn’t. It kept getting smaller and smaller.”

In filings with the NASD, the investment advisers denied they were at fault, blaming the “unexpected” stock-market downturn.

Even if consumers share part of the responsibility, experts say seminars are often designed to lower their guard, creating an entertaining atmosphere by offering them free dinners and prizes.