Fundsters interested in the advisor-sold side of the 529 business may want to take heed of what's happening in California. The Los Angeles Times reports that early next year the giant state will shut down its $283-million, 22,565-account, advisor-sold 529 because, according to the state's treasurer's office, no one (or at least no one the state wanted) was willing to run it.

"In the end, we were not able to find a manager that could deliver a competitive plan for our account-holders," Joe DeAnda, a treasurer's office spokesman, reportedly said, "and we felt the best option was to transfer them to our direct-sold plan."

The move comes after California already switched the direct-sold 529 from Fidelity to TIAA-CREF [see profile] this year. The direct-sold plan boasts $3.9 billion and 277,343 accounts, and TIAA takes over on November 7. The advisor-sold accounts will shift into the direct-sold plan in the spring. 

Edited by: Neil Anderson, Managing Editor


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