Top 10 Advisor-Sold 529 Plans

Advisors helping clients save for college have a choice: They can recommend a direct-sold 529 plan that the client would open themselves, or invest their client’s money in an advisor-sold plan, one which will almost always charge higher fees but often include more investment options, including often actively managed funds.

Both types of 529 plans offer the same benefits of tax-free savings and tax-free withdrawals so long as the funds are used for qualified education expenses such as tuition and room and board. (Now educational expenses for private K-12 tuition costs qualify as a result of a 2017 tax cut law.) Many plan contributions also qualify for state income tax deductions. In most cases, those deductions are only available for residents contributing to an in-state 529 plan, but some states allow state tax deductions for contributions to any 529 plan, including those out of state.

Savingforcollege.com, a website that provides information and tools for families to use to help families finance a college education, recently released its performance rankings for direct-sold 529 plans, broker-sold plans and RIA-sold plans. The performance rankings reflect a composite score in seven asset allocation categories: 100%, 80%, 60%, 40% and 20% equity and 100% fixed income and 100% short-term compared to published investment returns.

We’ve already reported on the top 10 direct-sold plans. Now we’re focusing on the best RIA-sold plans, which tend to cost less than broker-sold plans because they don’t charge commissions. Many RIA-sold plans also don’t charge a management or program fee since the RIA already charges an advisory fee. Most of these plans offer a variety of investment choices including age-based, static investment (usually target funds) and individual investment options, which often include actively managed funds.

Note that Savingforcollege.com maintains a directory of financial advisors for readers who are considering turning to a professional advisor for college savings guidance. It offers a 25-question exam on college planning and funding topics, and advisors who pass receive a “529 Pro” badge on their profile.

Check out the slideshow above for the 10 best RIA 529 plans for 2018, according to Savingforcollege.com. Most of the plans also ranked in the top 10 for the past three, five or 10 years or for two or all three of those time periods.