One of the big questions in the 529 arena is how to get the word out to potential customers. Many firms have looked at employer-sponsored programs as one possible solution to this issue. Well, ADP
is leaping into this idea both barrels blazing.
The firm is launching a fully automated 529 payroll deduction program, Joe Grana, vice president of marketing for ADP's 529 Services, told the MutualFundWire.com. The program taps into CollegeBoundfund, which is a 529 plan managed by Alliance Capital and offered by the State of Rhode Island.
"Right now, we are getting the word out to our payroll clients, companies that we have had relationships for a long, long time. But we are also talking to other 529 plan providers. Eventually, our service could be extended to any program regardless of the state that is administering it," Grana reported.
"For our clients, it will basically be a check-the-box offering," he added. "Post-pilot, our first targets were those who have a 401(k) service with us. We've taken a great deal of what we learned from our 401(k) experiences and applied them to our 529 offering. For instance, our 529 automation and integration systems look very much like our 401(k) system."
Grana noted that the firm would not be targeting consultants in the short-term. "They are not part of the mix right now. Our logical first choice is to talk to the clients who use us for payroll."
"One of the things we learned from our pilot program is that we need to introduce an educational component. We want to step up the employee education meetings. We need to spend more time educating employees and make them aware of the choice available for them," he explained.
Stay ahead of the news ... Sign up for our email alerts now