Filed Under:Life Insurance, Sales Strategies

Pershing to Offer 529 College Savings Plans

The clearing firm Pershing announced Wednesday at its annual conference that it will now offer 529 college savings plans on its platform.

Pershing Insite 2012 is being held June 6 to 8 at the Westin Diplomat in Hollywood, Fla. This is the 14th year for the event at this location, which draws thousands of registered investment advisors, registered reps and home office professionals.

The new 529 college savings plan offering allows advisors to open, fund and manage accounts electronically for their clients. It is designed to help advisors overcome the hurdle of managing college savings outside their clients' investment portfolios.

“With Pershing's new solution, investment professionals can now operate more efficiently and manage these investments alongside the other assets and investments of their clients,” said Rob Cirrotti, director of retirement and long term savings at Pershing, in a statement.

The 529 College Savings plan is one of the most popular college savings vehicles for American families and is expected to reach $237 billion in assets by 2015, according to the Financial Research Corporation (FRC). But advisors also face the hurdle of client education when it comes to 529 plans: according to a recent survey from Edward Jones, 62% of Americans do not know that a 529 plan is a college savings plan.

Pershing plans for its open architecture platform to eventually include a large selection of 529 college savings plan providers. The first 529 plan available on the platform is CollegeAmerica, sponsored and administered by the Virginia College Savings Plan. American Funds is the plan's program manager, offering 25 investment options. CollegeAmerica and American Funds have 42% of advisor-sold 529 college savings plan assets, FRC says.

“Pershing's offering has the potential to greatly expand the use and sales of 529 college savings plans in the advisor-sold channel,” said Paul Curley, FRC’s director for college savings, in a statement. “We've already seen an impressive 14% increase in gross sales for advisor-sold plans in fourth quarter 2011.”

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