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Annual College Savings Survey results: Direct- or advisor-sold 529 plan?
Looking to open a 529 savings plan but donít know where to start? 529 plans can be opened directly through the plan manager or through a financial advisor. According to our Annual College Savings Survey, many of our readers feel comfortable selecting their own investments and would choose a direct-sold plan. The right choice depends on your personal situation, but here are some key questions to ask yourself:
Could you use some help?
With more than 100 options available, itís no surprise that many families have a difficult time choosing the right 529 plan. Our Survey revealed that a large percentage of those who do not have 529 plans havenít even started saving for college. When asked why they have been putting it off, 53 percent claimed that they have not had enough time to research and understand all of the different plans available. If you fall into this category, you may want to consider working with a financial advisor who can recommend a suitable investment for your family.
529 plans are sold through registered investment advisors (RIA) as well as broker-dealers. RIAs typically charge a flat fee based on a percentage of assets for their services, and broker-dealers earn a commission on certain products they sell. Both are licensed professionals who are able to provide assistance based on your financial goals. Advisors can also provide information on whether or not your stateís plan offers additional tax benefits or financial aid incentives for residents. Most importantly, reaching out to an advisor is a simple first step toward opening a 529 plan. If procrastination is holding you back, give yourself a little nudge!