More families are seeking the help of financial advisers when it comes to saving for college, but fewer reps are talking to them about Section 529 college savings plans, according to a
Fidelity Investments survey released today.
Thirty-three percent of the families surveyed said they have sought the help of financial advisers on college savings issues this year, up from 28% last year. However, only 40% of families that bought a 529 plan through advisers said they were pitched such a plan, according to the survey.
“Families in general are struggling with what to do with their overall financial picture,” said Jeff Troutman, vice president in charge of 529 plans at Fidelity. “With unemployment going up and staying high and the housing market being very weak, families are really just trying to focus on how to regain their level of wealth, as well as their retirement savings.”
At the same time, however, the 529 plan market is complex, Mr. Troutman said. Each state plan has a different tax treatment for in-state investors. That, on top of the fact that it can be cumbersome to set up a 529 plan account, may be hampering advisers from selling these plans, he said.
However, those families that are using advisers are sticking to their college savings plans: Sixty-six percent of parents working with advisers are saving systematically, compared to 52% who aren’t using an adviser.
Also, more advisers are helping parents with the entire college application process, the survey showed. Twenty-five percent of advisers are helping clients research schools, up from 13% from last year. And 30% of advisers said they are helping parents navigate the grant process, up from 16% last year.
Thirty-seven percent of advisers said they are helping parents secure financial aid, up from 20% last year.
Fidelity’s Fourth Annual College Savings Indicator research is based on a national sample of 2,562 families with children 17 or younger. All families had an annual household income of at least $30,000.
