California to shut down its advisor-sold 529

The Los Angeles Times reports that the state of California has decided to shut down its ScholarShare Advisor 529 College Savings Plan early next year and transfer accounts in the program to the state's direct-sold ScholarShare program.

The direct-sold ScholarShare is changing program managers, going from Fidelity Investments to TIAA-CREF's Tuition Financing Inc. (TFI). Fidelity had decided not to participate in recent rebidding of program management services for the $4 billion plan.

California received no bids to manage the state's advisor-sold 529 plan, which is currently managed by Fidelity and holds approximately $300 million in assets. Unless plan participants roll over to another 529 plan--presumably with the help of their financial advisors--they will see their assets transferred automatically to the direct-sold ScholarShare and TFI next year.

Fidelity Investments continues to manage a similar advisor-sold 529 savings plan out of New Hampshire called the Fidelity Advisor 529 Plan.

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