RIAs Concerned About Quality and Selection of Investment Options of Traditional 529 Plans

ST. LOUIS, March 5, 2012 /PRNewswire/ -- Tuition Plan Consortium, a group of more than 270 U.S. private colleges and universities that own and operate the Private College 529 Plan, today announced the findings of a survey of registered investments advisors (RIAs) that found that despite broad adoption and acceptance of traditional 529 Savings Plans, more than half (53 percent) are concerned about the quality and selection of investment options offered by such plans.

The majority of RIAs (88 percent) have concerns regarding traditional state-sponsored 529 Savings Plans. While quality and selection of investment options topped the list of concerns, more than a third of RIAs (34 percent) cite exposure to market volatility as their main concern, and one in three (28 percent) pointed to fees levied by traditional 529 plan providers.

The benefits of 529 Pre-paid Plans, on the other hand, seem to be clear. Nearly six in ten RIAs (57 percent) agreed that the most important feature of a Pre-paid 529 Plan is the ability for parents/guardians to lock in today's rates for future college tuition costs, followed by the associated tax benefits and protection from direct market exposure (tied at 15 percent, respectively).

"Given ongoing market volatility and uncertainty, RIAs are working hard to uncover suitable college savings options for their clients," said Nancy Farmer, president of Tuition Plan Consortium. "The concerns of RIAs are well-founded and underscore the importance of a diversified college savings portfolio with options that eliminate fees, market risk and the stress associated with making the right investment choice. Private College 529 Plan is one such solution."

Structured as a pre-purchase of tuition and not an investment, Private College 529 Plan offers a guaranteed way to lock in today's tuition rates at a diverse group of more than 270 private colleges and universities across the country. It is the only 529 Plan that is not state run.

Through Private College 529 Plan, families can pre-purchase tuition at leading private institutions that may be applied at any participating school for up to 30 years. Participants benefit from eliminating their exposure to tuition inflation and market volatility.

The most commonly recommended college savings vehicles recommended by RIAs to their clients, according to the survey, include: traditional 592 Savings Plans (95 percent), UGMA/UTMAs (45 percent), Roth IRAs (30 percent), Taxable Accounts (29 percent) and Pre-paid 529 Plans (28 percent). 

The survey was conducted at the TD Ameritrade Institutional 2012 National Conference in Orlando, FL from February 1-3, 2012.

Private College 529 Plan can now be followed on Twitter at @PC529Plan and accessed via Facebook at www.facebook.com/PrivateCollege529Plan.

About Private College 529 Plan and the Tuition Plan Consortium

Owned and operated by a national consortium of more than 270 leading private colleges and universities, Private College 529 Plan was created by authorization of the U.S. Congress for colleges and their consortia to help families save for college and increase the affordability and accessibility of higher education. Private College 529 Plan enables families to invest in their children's future by pre-paying tuition at member institutions, protecting their savings from annual tuition inflation. 

The educational mix of private institutions participating in Private College 529 Plan provides families with a wide range of college choices. As opposed to other state specific congressionally authorized plans, Private College 529 Plan has a national scope, with participating private colleges across the United States. It also differs in that its administrative management is by the institutions themselves as opposed to government. Today, Private College 529 Plan is working for nearly 6,000 families with over $160 million under management. For more information, visit https://www.privatecollege529.com/.

SOURCE Tuition Plan Consortium