Survey: 529 industry feeling the heat of financial furnace

Even the normally upbeat Section 529 college savings plan industry is in the dumps as it grapples with the financial crisis, according to a survey released this morning by the College Savings Foundation at its annual conference in Miami Beach, Fla.
JAN 29, 2009
By  Bloomberg
Even the normally upbeat Section 529 college savings plan industry is in the dumps as it grapples with the financial crisis, according to a survey released this morning by the College Savings Foundation at its annual conference in Miami Beach, Fla. Just 28% of respondents said that they thought that the level of financial advisers’ commitment to selling 529 plans in the field was increasing, compared with a year ago, when 51% said they thought that. Also, while 57% of respondents in January 2008 thought that the overall commitment of program managers to 529 plans was increasing, that fell to 44% this year. Just under half of respondents last year thought the overall commitment of states to 529 programs was increasing, but this year just 44% of respondents did. Not surprisingly, respondents cited the economic environment as the biggest factor holding back 529s’ growth, followed by “lack of interest and/or funds” and “perception of poor performance.” What’s more, just 12% of survey respondents said that they are very optimistic about the growth of 529 assets and accounts in the short term, though nearly half said they are very optimistic about growth in the long term. “The industry remains optimistic but is also more cautious in these uncertain times. There’s a need to refocus and have financial advisers get the message out to families on the importance of saving for college,” said Kevin McMullen, chairman of the foundation’s executive committee and counsel for State Farm Mutual Automobile Insurance Co. in Bloomington, Ill. “I think everyone is having a difficult time dealing with the stock market,” said 529 veteran Joe Hurley, vice president of Bankrate Inc. of North Palm Beach, Fla., and founder of Savingforcollege.com LLC. “States and program managers want to make sure they have programs set up that are appropriate for this environment and make it as easy as possible for people to understand.” Forty-three association members participated in the survey. The Washington-based association is an industry advocacy organization whose members include program managers, state officials and distributors of financial service products for 529 plans.

Latest News

Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future
Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future

While the choice for advisors to "die at their desks" might been wise once upon a time, higher acquisition multiples and innovations in deal structures have created more immediate M&A opportunities.

Raymond James continues recruitment run with UBS, Morgan Stanley teams
Raymond James continues recruitment run with UBS, Morgan Stanley teams

A father-son pair has joined the firm's independent arm in Utah, while a quartet of planning advisors strengthen its employee channel in Louisiana.

Social Security trustees see one less year in insolvency countdown, project shortfall to start 2034
Social Security trustees see one less year in insolvency countdown, project shortfall to start 2034

New report shows dimmed outlook for benefits to retirees and disabled Americans, creating further pressure for federal tax hikes or more borrowing.

NY Republican Stefanik presses SEC to probe Harvard bond sale
NY Republican Stefanik presses SEC to probe Harvard bond sale

Open letter to SEC Chair Paul Atkins questions whether the Ivy League university withheld material information prior to its $750 million taxable bond offering.

Ex-LPL leader re-emerges at The Wealth Consulting Group
Ex-LPL leader re-emerges at The Wealth Consulting Group

The Las Vegas-based hybrid RIA overseeing $8.8 billion in assets has named Andy Kalbaugh president to help scale its advisor platform.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave