that success then breeds success. Often times we see that when
families who have been saving for a while get their statements
and see the results of a disciplined savings approach, they want
to do even more.
One great tool is the automatic investment plan. These have been
known in regular investing for decades: dollar-cost averaging—
take the emotion out of it; save the same amount on a regular
basis; take advantage of down markets, up markets, and everything in between.
PA: What other savings opportunities or tools are there that
advisers should be aware of?
Dombrower: Our Ugift platform has been around for several
years, and we’ve made some tremendous improvements to it.
These have led to significant increases in gifting through the
Ugift platform. The success of Ugift is partly the technology we
introduced, which lets parents, grandparents, friends, family,
etc., make gifts electronically and very easily to any of our plans
that are hooked up to the platform. But I also think it’s people’s
realization that they’re giving a gift of college savings versus
some item that the recipient might outgrow or lose interest in.
On the adviser side, Ascensus has what we call “Quick View.”
This is basically a portal through which advisers can see all of their
client accounts and download data into whatever program they
may be using for portfolio management. We’re also connected to
a number of companies that aggregate financial information; an
adviser can subscribe to that aggregator and, from there, download financial positions from different providers such as Ascensus.
At Ascensus, one of our priorities is to make financial advisers'
lives easier so they can grow their practice by helping more families save.
PA: How can advisers help clients manage competing savings
Dombrower: One of the biggest values—besides investment and
product expertise—that working with a financial adviser brings is
objectivity in helping a family meet its goals. Helping the family
figure out, “Where am I going to get the money every month to
save for our retirement, our college savings accounts, the mortgage, the car payment, the food bill, and so on?” Sometimes they
need that objective person saying, “Why don’t you knock off that
trip to Starbucks five days a week? You’ll have $100 a month to
put into a 529 account.”
I would tell any family to avoid setting an objective of saving for
four years of school. Paying for college for the typical family is
usually a mosaic, composed of four to seven different funding
sources—what you’ve saved, current income, gifts the student
may have received from grandparents, student income, etc.
Consider telling families that they need to start early, save often,
and set up an automatic investment plan—even if it’s only $20 a
month at first. Every dollar saved is potentially one less borrowed;
that’s how they can set themselves up for success over time.
At Ascensus, our average account for the 16- to 17-year-old
beneficiary has enough in it today to pay for two years of a public
education. That’s not a bad start. As I said earlier, success breeds
success—I’ve experienced it personally.
Nineteen years ago, I received a postcard from New York State
about a new 529 plan that was designed to save for college. It was
federally tax deferred and tax-free if used for qualified expenses,
and, for any money I put into it, I’d get a local/state tax deduction. My wife and I said, “It’s got to be better than just putting the
money in a bank account.” So we moved what we’d saved in an
UGMA account to a 529 account in New York. We set up an automatic investment plan and never looked back. My older son just
finished his freshman year, and, including some—though not a
tremendous amount—of merit money because of his SAT scores,
he probably has 85% to 90% of his four years of school paid for.
It was just being disciplined—starting early, saving often, and just
continuing to do it.
PA: Discuss the new resource
Ascensus has introduced to
provide advisers and their
clients with a way to educate themselves.
Dombrower: Howtosaveforcollege.com is an Ascensus-powered
website that we rolled out a couple of months ago. It was designed
to serve as a one-stop shop or clearinghouse for all things related
to college financing. It doesn’t promote any particular plan, but is
a site where a family can go to research how to save for college.
Compared with some of the other sites out there, it’s very clean,
efficient, easy to use, and intuitive.
It also has a feature in which the user can click on “Find Your Plan,”
then pick a state from the drop-down menu to choose from the
different plans available in that state. From there, links take users
directly to the sites of any of those plans. We felt that we needed
to bring this type of tool to the consumer and financial adviser.
When it comes to financial advisers, our tools and distribution
team work to explain what helping clients save for college could
do for a practice in the long term. Advisers who get involved in this
way end up developing good relationships with the kids for whom
they’re establishing these plans. That’s a great way to deepen the
relationship with the family as a whole, and to have a good shot at
gaining the students as clients when they graduate, start working,
and need a financial adviser. n
Visit howtosaveforcollege.com – the authority on 529
college savings plan information and education.