Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:When 529s and SAs Collide Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, May 14, 2002

COME TOGETHER
When 529s and SAs Collide

by: Tony Pennino

Is it possible for the two next big things to be bound together in one neat package? Delaware Investments sure thinks so. The firm went live with its 529 plan for the State of Hawaii on April 29, Dan Carlson, vice president at Delaware, told the MutualFundWire.com. The kicker is that the investment vehicles being offered in that plan are separate accounts.

"These is a separate account structure created by the state. There are seven unique portfolios available through the plan, each of them customized according to the needs of Hawaii. This allows Hawaii to change the underlying portfolios as needed. Most individuals who might want to utilize a 529 plan probably do not have the minimums needed to get into a separate account. This gives them the opportunity to do so," Carlson reported.

Hawaii's plan is available nationally. Delaware also recently closed a deal wherein it will provide services for Pennsylvania's 529 plan. That will have a different investment structure from Hawaii's; Calvert Funds will provide two socially responsible funds to that plan.

Looking ahead for the 529 business, Carlson sees an increase in competition. "Competition will create greater exposure and educational opportunities. The more competitive the space is, the more likely the story is going to get out, the better the products will be, the more you will reach the investor," the executive added.

"We are looking at assets in 529 plans growing two to three times current levels over the course of the year," he contended, "but you are not going to see the explosive growth you saw in mutual funds or 401(k) plans. There are only 50 states. This is a limited space."

Carlson further stated, "The nimble will survive, those with the capital and the skill sets. In three to five years, you will know who are the winners in market growth."

The executive does see an place for alternative investments as having room in the 529 world. But again he cautions that the life of the investment is approximately 12 years whereas the life of an investment in, say, a 401(k) plan is around 30 to 40. "That will affect how people choose their investment options."

He also feels that 529 plans are going to have an impact on the world of employee benefits. He foresees that employers will offer one -- or, perhaps, even two -- to their employees. Carlson further reported that the presence of a 529 plan helps with 401(k) sales. "They help in building the confidence of the employer. For Delaware, we have the 529 plans for two states. That acts as a kind of endorsement for our offerings across the board. It is difficult to measure, but it certainly gives the employer a heightened sense of confidence in our product," he concluded.

Any last thoughts on 529s? "Stay tuned, more to come," Carlson responded. 

See the list of all the 2002 Most Influential People



Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2020: Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly




©All rights reserved to InvestmentWires, Inc. 1997-2020
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use