Reader’s Perspective: Question and Answer with Spencer Sherman, Founder and Executive Chairperson of Abacus Wealth

By Paul Curley | | January 5, 2017

How does the founder of a growing RIA and author of "The Cure for Money Madness" integrate college financial planning into his discussions with clients?

This article features an interview with Spencer Sherman, Founder and Executive Chairperson of Abacus Wealth, and Author of “The Cure for Money Madness” (Random House). While Spencer is based in San Francisco, California, Abacus Wealth has more than 40 employees in six locations including Los Angeles and Philadelphia, and manages over $1 billion in assets for over 700 clients in 35 states. You can learn more about Spencer Sherman and Abacus Wealth at the website of Last but not least, thank you Spencer for your time, insight and support. Please read the question and answers to learn about his perspective on college financial planning, and hope that the article provides with you an opportunity to learn more from your peers.

Question 1 (Paul Curley, Editor of the 529 Dash): How do you integrate college financial planning into your discussions with a client?

Answer 1 (Spencer Sherman, Founder and Executive Chairperson of Abacus Wealth): We talk about their goals and what they want to do. Do they want to fund college completely, or partially, and we figure out how much savings is needed to achieve that goal. Sometimes the money is coming from earnings and sometimes it might be coming from other accounts. We also integrate it into discussions around reducing estate taxes, because you are getting the assets out of the estate even if they do not go to college. We always talk about college planning with anyone that has kids, unless they say that they have no interest in planning for college or want their children to just pay for it. We feel so strongly about 529s that we are always having the conversation with clients, and we begin as soon as the child is born. Therefore it is a springboard from the birth of a child, or a new client coming on board. It is a marker of something happening that they would not have done on their own. Therefore 529s are a marker of our value add as they recognize that the 529 Plan would have remained on their to-do list forever without us.

Question 2: What is working for you in terms of college financial planning?

Answer 2: 529 plans allow you to pay all college expenses from one account and you get a dedicated savings vehicle that is visible to parents.  Even though the huge tax savings are of course an important component, the segregation of the account gives families the awareness of their growing college savings and that it can’t be used for other purposes.

Question 3: How can product providers and states better support you?

Answer 3: While I am generally satisfied with the product support, clearer charts on usage and limits on the plan would help. For example, what are the details on the withdrawal rights? There does seem to be lots of flexibility that people do not know about, and more detailed descriptions with case scenarios would help.

Question 4: What key trends do you see in college financial planning going forward?

Answer 4: People at all levels of income can set up plans and use them, as many minimums are as low as $25. Also, I have seen usage increase over the last ten years by those without children as a means to provide legacy planning to nieces and nephews, and other family members. In fact, people are starting to use these plans to fund multiple generations. Your name will be remembered as having created a family educational fund that educates family members for many years. 529s have become a core conversation piece with every client, including those without children, as a way to leave a great legacy.

Editor’s Final Note: Thank you Spencer Sherman for your time and insight, and much appreciated. Also, I would like to provide a special thank you to the readers for learning from your peers, for your support and your engagement. Cheers, and may you have a successful 2017.