MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Wednesday, December 13, 2000 Schwab Offers 529 Across the Board Starting in mid-December, Charles Schwab will add American Century's Learning Quest to its distribution network. Elsewhere, it had been incorrectly reported that Schwab would be offering the college savings plan only to its retail customers. The relationship extends American Century's distribution and marketing throughout the Schwab complex. Schwab Institutional's 6,000 advisor clients will be able to broaden their financial planning capabilities with the new product. Schwab's existing college savings IRA, with a $500 annual limit, does not offer the same benefits as a 529. About a year ago, Schwab's clients started demanding access to a 529 plan, so the firm began searching for a provider. In addition to surveying ten to twelve firms, Schwab considered starting up its own program. "We considered doing our own," said Schwab spokesperson Morrison Shafroth. "We found a product that works for us and the key for us, philosophically is that we wanted to provide client choice and cost." Time was another key factor. Shafroth added, "It would have taken a significant amount of time to build something from scratch." American Century itself looked around before settling on Kansas as the home of its 529 program. With legislative variation across jurisdictions, every state is not equally attractive. "We looked long and hard at the State of Kansas," said American Century spokesperson Beth Randolph-Taylor. "I'm sure it didn't hurt that we were in their backyard and a third of our employees live there." Randolph-Taylor explained that the firm went back and forth with Kansas over the terms of the state's 529 initiative. Many fund companies have been throwing their hats into the college savings ring. Those who are leery of undesirable program features may gain a leg up simply by entering the market. "This is a landscape that's going to continue to shift and change, I suspect," said Randolph-Taylor. Printed from: MFWire.com/story.asp?s=26269 Copyright 2000, InvestmentWires, Inc. All Rights Reserved |