The National Association of Securities Dealers has widened its inquiry into sales of 529 plans by investment advisors and brokers, more than tripling the number of firms under scrutiny to 20. The regulator began its fact-finding investigation in June of 2003 with an analysis of six large broker/dealers.
"Our initial criteria were firms that had had investor complaints, or that sold only one 529 plan, and where 529 plans were a significant part of the firm's business," said Herb Perone, spokesman for the NASD. "We have twice expanded the scope of the thing to add additional firms with additional criteria, to get an accurate view of sales of 529 plans," he said. Perone declined to reveal what additional criteria the NASD is now using, but said the inquiry could continue to widen.