he demand for 529 College Savings plan is picking up, according to early evidence. No one knows total sales through this emerging channel for certain but the sales figures at one fund are a part of the public record.
Capital Research and Management's
American Funds has hailed in nearly $270 million in its special 529 class shares since the Los Angeles-based firm launched the share class in March. 529 sales at the firm can be tracked to the extent that they are in separate share class.
Sales in the programs of other vendors are harder to track since they are of combined with shares sold through other channels in reports.
, director of research at Strategic Insight, says that the strong sales at American Funds is a signal of pent up demand for the product. He expects that sales through the channel may double to $10 billion this year from $5 billion a year ago.
Those sales may not reflect all of the benefit the college savings programs bring to fund firms. Nachmany points out that 529 plans allow advisors to open the door with new clients.
"529 has become the number one mind space item because it is an excellent topic for financial advisor to discuss with the clien," explained Nachmany. "It may not translate into significant business in every case, but its leads to broader discussions about issues like family that hit home with investors."
The American Funds CollegeAmerica
529 program features 21 funds and is sponsored by the Commonwealth of Virginia.
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