529 Plan Web Site Aimed at Advisor Market

January 23, 2003 (PLANSPONSOR.com) - Financial advisors helping clients find the best 529 college savings plan may get some help from a new online plan search tool.

Mendota Heights, Minn.-based PlanAnalytics, said Search529, should allow advisors to compare 529 plans offered around the country by generating custom comparisons of plan features. The new service is free to advisors.

According to an announcement from the company, Search529 catalogs more than 70 state-sponsored 529 plans.

To use the Search529 Web site, the company said financial advisers enter information about the client and beneficiary they represent and then view a list of available 529 plans. The adviser can then run a comparison that discloses expense and performance information for up to three plans at a time and download pre-completed enrollment forms from respective plan providers.

Search529 then makes the processed data available to advisers free-of-charge via  its Web site .


The company said financial advisors can use the site to learn more about the 529 marketplace, download sales and enrollment materials and conduct due diligence on 529 products.

President and chief executive officer Tom Plumb told PLANSPONSOR.com that current college savings programs are difficult enough to understand that many potential customers will rely on a financial advisor to guide them. That’s why the company projects the advisor market will generate 70% of the 529 sales in coming years.

“There’s enough complexity in the 529 marketplace where we believe the advisor will play a major role in distribution of 529 plans,” Plumb said in an interview.

He said the company doesn’t currently project a significant market among plan sponsors. “As the workplace market matures, there’s a definite applicability in delivering our product to the workplace,” Plumb said.

A s with a 401(k) plan, income generated in a 529 plan grows tax-deferred at the federal level, and qualified withdrawals from a 529 plan also are free of federal income taxes; premature withdrawals of earnings for other purposes incur income taxes and a 10% penalty. Many states have endowed their 529 plans with tax-free qualified withdrawals at the state income tax level, too, while some   allow their residents to claim a state income tax deduction for contributions to their plans.