With higher education costs on the rise, individuals have made progress in understanding the importance of college savings. However, many 529 college saving plan participants have yet to paint the town red over their returns, according to The Boston Globe.
John Trainor, a schoolteacher who has a 529 account, is disappointed in the returns he has been getting. "I'd almost have been better off sticking it into a mattress," he said.
The participation in these plans is on the rise, as Americans had $80.3 billion invested in 8.1 million accounts last year alone. But as this number grows, many account holders are complaining about poor returns, high fees and confusion over the different types of programs.
"Now that the plans have been through a few market cycles, you can assess the plans that aren't really doing that well, and that a lot are quite expensive," said Lauren Gadowski, a financial planner.
Now the Municipal Securities Rulemaking Board has proposed some changes, one of which is requiring brokers to only sell those plans that suit the buyer. Some worry over the mayhem that brokers will face when required to track too many different plans. Also, brokers would be expected to inform customers of all the tax benefits that exist in their state plans. In other words, brokers would be expected to overlook boosting their own commissions, and instead concentrate on client needs.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.