Although most parents and grandparents help pay for their kids’ and grandkids’ college education, most producers say 529 college savings plans account for less than 5% of their business, according to a study recently conducted for John Hancock Life Insurance Company, Boston. A recent survey of more than 780 producers, conducted online by Zoomerang for John Hancock College Savings, found 76% say just 1% to 4% of their business comes from 529 savings plan sales.

In contrast, a survey of consumers conducted by Synovate for Hancock found that more than two-thirds of parents and nearly one-half of grandparents have contributed or plan to contribute to 529 plans.

Hancock found that 42% of consumers agreed that the 4th quarter of the year is the best time to sell 529 plans, followed by 24% who said sales were strongest in the 1st quarter, 17% in the 2nd quarter and 16% in the 3rd quarter.

The fact that the 4th quarter coincides with the end of the tax-planning year is probably the reason many producers see a boost to sales of the products late in the year. Still, Hancock also found 53% of producers advocate the promotion of gifting all year long, not just during the 4th quarter.

Consumers apparently agreed, with roughly 46% saying a gift for a child’s college education needed no special occasion. Others said they preferred to contribute at graduation (31.4%), on the child’s birthday (11.7%) or at the child’s birth (5.6%).

Among producers, 29% said they don’t sell 529 plans for the simple reason that their clients don’t ask about them. At the same time, 49% of producers who do sell 529 plans said clients’ college savings resulted from an overall planning discussion, while 45% said it was mentioned in an annual review, and 42% said it came up when a client experienced a life event such as the birth of a child.

When asked about the benefits of 529 savings plans, 84% of producers thought the availability of federal tax breaks was most important to their clients. Flexibility to change beneficiaries was considered important by 82% of producers, and 77% said choice of investment options in the savings plan was important.

According to producers, the characteristics of 529 savings plans most important in their sales were:

–Performance (79% of producers).

–Multi-managed platform (67%).

–Availability of sales tools such as calculators (58%).

–Brand recognition (49%).

–Wholesaling support (45%).

Among consumers studied, almost 93% said they wanted to be able to send their children or grandchildren to whatever college the children wanted.

The clear interest in 529 college savings plans among consumers shows “there’s a real opportunity for producers,” said Diana Scott, senior vice president and general manager of John Hancock College Savings. Noting that the tax-free status of qualified distributions from 529s was recently made permanent under the Pension Protection Act enacted in August, Scott urged producers to take another look at 529s.

“While a 529 sale may not be a large ticket–although some of them are–the relief parents feel in starting to tackle this financial issue is so great, it pays off by strengthening relationships and many times leading to sales of other products,” she maintained.

John Hancock is a unit of Manulife Financial Corporation, Toronto.