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Rating:529 Advisor Web Tool Debuts Not Rated 2.3 Email Routing List Email & Route  Print Print
Thursday, January 23, 2003

529 Advisor Web Tool Debuts

by: Sean Hanna, Editor in Chief

With both Morningstar and SavingForCollege offering directories of 529 college savings programs how can a new player enter the game? Mendota Heights, Minnesota-based PlanAnalytics this that advisor tools are the answer. The firm is unveiling its tools at today's Securities Industry Association 529 conference in Washington, D.C.

The venture capital-backed firm, which also runs the Search401k Website, went on a roadshow ending at the conference this week as it formally launched its Search529.com Website for advisors. The site had been in a beta test with a small number of advisors since December, said Tom Plumb, president and chief executive officer of PlanAnalytics.

Plumb said that no major changes were made to the site based on the feedback from the first group of advisors using it. "It is an iterative process," he explained. He added that he expects the tool to be a dynamic one that responds to what he predicts will be a quick evolution of college savings products. The site provides information on each program, marketing materials made available by the programs, and ready-to-mail account applications.

The site is launching with product information on all 74 existing 529 programs and has the active participation of some leading program vendors, said Plumb. Among the firms working with PlanAnalytics are Alliance, Raymond James, AIM, ING, Delaware, ManuLife, Pan American Life, US Bancorp Piper Jaffrey and Robert W. Baird. The firm is actively wooing more programs as well.

Providers tying into the service will increase their distribution, Plumb promises. "We are building a universe of advisors who will use the fulfillment and enrollment tools," he added. Providers pay PlanAnalytics on a transaction basis, either per application or for each piece of marketing material downloaded from the site. He believes that partners will be able to cut their costs even after paying PlanAnalytics when they take into account the cost of distributing those materials in their current form.

Fund firms can also subscribe to research PlanAnalytics generates through advisor activity on the Web site. That activity will provide basic information such as what funds advisors acquire about and what percentage of advisors downloading marketing information ultimately put clients into accounts. "We are looking at when providers win and lose cases, where they are being compared and what products advisors are actually buying," said Plumb.

As for the competition, Plumb thinks they are heading down a different path. "We are less competitive with Morningstar than it may appear," he explained. "They are very deep on the investment side of the product. That is there competency and is always the basis of the products that they bring to the marketplace."

And, unlike SavingForCollege, Plumb says PlanAnalytics will never offer an advisory service to retail investors. "At the end of that game we would become competitors with our customer -- the advisor -- if we did that," he said.

He also said the firm has no interest in working with plan sponsors or a product based on workplace distribution of 529 plans. Two products, College Savings Exchange and a marketplace from ADP, cover that niche.

Plumb said that path would distract the firm from working with advisors. Instead, they are now courting advisor groups to build the use of the tool with intermediaries. If that effort is successful, Plumb foresees the 529 product eventually growing larger than the 401(k) search product.

"I see this as a slightly larger product than 401(k). DC plans are a relatively narrow slice in terms of audience with only 10 percent or so of advisors using it," he explained. "I expect that 70 percent of advisors will do meaningful business with 529 plans.  

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