Sometimes, it starts with a free lunch.

You dropped your business card in a fishbowl at the local Chinese restaurant hoping to win a free meal, courtesy of a local broker's office. Or a nice man called you at home one evening to invite you to a "free lunchtime seminar" at a local restaurant you like.

And you accepted, because even if you had to listen to a sales pitch, the kung pao chicken at that place is pretty good, and everything's better when it's free.

Whether the hook was a free lunch, an "investment workshop" offered through your community school, or an evening meeting with an investment professional one of your friends recommended -- beware.

That person can wreck your life.

The most expensive lunch you'll ever eat
Lots of brokers use the "free lunch" trick to market their services. In my area, the Ameriprise guys are particularly fond of this one. They leave a fishbowl at a local restaurant and invite people to drop their business cards in for a chance to win a free lunch. Later, they sift through the cards, and they invite the most likely looking prospects to a lunch that's accompanied by a hard-sell presentation.

Now, signing up with these folks isn't always bad. Your new broker could do the right thing and put your nest egg into a bunch of mutual funds that are in line with your goals. While most broker-sold mutual funds have a lousy performance, thanks to the big fees that brokers love so much, there are exceptions.

Take American Funds Growth Fund of America. Despite its big fees, the fund is still a strong performer, powered by heavyweights such as Cisco (Nasdaq: CSCO), Oracle (Nasdaq: ORCL), and oilfield services giant Schlumberger (NYSE: SLB).

There's also American Funds EuroPacific Growth, a highly rated star with a deep portfolio led by names including Spain's Banco Santander (NYSE: STD), Danish pharma leader Novo Nordisk (NYSE: NVO), and Brazilian energy giant Petrobras (NYSE: PBR).

So you could get lucky. But I wouldn't bet on it.

The problem with brokers
Even if most brokers want to help their clients out, the free-lunch song and dance that earns those fees is part of their job. Worse, some less scrupulous brokers just sell what their company gives them to sell without letting it keep them up at night. And the products the company likes selling best -- the most profitable ones -- are usually lousy. Annuities, for instance, have made a lot of sales folks rich and a lot of investors frustrated. (See the sordid details for yourself.)

When the broker is focused on just the big commissions and gets caught up in his own sales hype, things can get really ugly.

You could find yourself cashing out your 401(k) and putting the money into a portfolio of crummy stocks you've never heard of -- at $200 a trade. Or he might offer you a nice, safe-sounding bond that has some tricky features you don't quite understand, along with a funny name like "auction-rate security."

And when those investments crater, when that bond blows up, when your retirement nest egg evaporates in a puff of smoke, well, hey, that's just market risk, you know?

Sound implausible? This stuff happens every day to people who should have known better but let their own lack of knowledge and trust in a smooth sales pitch carry them -- and years of careful savings -- away.

The Foolish bottom line
You've got to do better if you want to retire with more than just Social Security. How?

  • Get informed. Be smart about your money. If you were smart enough to make the money, you're smart enough to educate yourself.
  • Don't invest in anything you don't understand. Ever. This is Warren Buffett's most important rule, and it's even more important for us. If you need to get informed, there's no shame in that -- none of us was born with investment knowledge.
  • Consider hiring a professional -- one who charges an hourly fee and gives unbiased advice, not a broker or salesperson who makes money off of commissions.

Better yet, use the Fool. We're totally unbiased and a lot less expensive. In fact, we provide a special service called Rule Your Retirement for people who want to know more about retirement finances. Every month, you get a newsletter with the latest expert thinking on retirement issues, access to a searchable archive containing five years' worth of retirement information, and a members-only section of our famous message boards, staffed by Fool professionals who specialize in retirement issues. Got a question? We've got answers.

It costs a whole lot less than you'd pay to meet with that investment advisor. Better yet, you can try it free for 30 days, with no obligation. Click here.

Fool contributor John Rosevear does not own any of the stocks mentioned. Petrobras is an Income Investor recommendation. The Motley Fool has a disclosure policy.