Reader’s Perspective: Question and Answer with Steve Stanganelli, CFP, CRPC, AEP, Founder of Clear View Wealth Advisors

This article features an interview with Steve Stanganelli, CFP, CRPC, AEP, Founder of Clear View Wealth Advisors. Based in the greater Boston area of Massachusetts, Steve’s insight as a fee-only fiduciary planner is built off of providing strategic financial planning to families, business owners and pre-retirees since 1991. Over that time period, he was a registered representative with First Colony National, financial advisor with Merrill Lynch Private Client Group, Investment Advisor with Focus Capital Wealth Management, financial planner with Quest Financial Services and more recently as a fee-only financial and tax planner with Clear View Wealth Advisors. During that time, Steve was also elected to a 2-year term as Councilor-at-Large for the City of Amesbury in Massachusetts, and ran for state representative in 2014. As part of his current role, he provides a number of public education articles on funding college and retirement, and on financial literacy. Within his role as financial planner, Steve covers a number of client issues including retirement income, divorce, college and elder care. You can learn more about Steve Stanganelli and Clear View Wealth Advisors at http://www.clearviewwealthadvisors.com/. Last but not least, thank you Steve for your time, insight and support for working with me on the article. Please read the question and answers to learn about his perspective on college financial planning, and hope that the article provides you with an opportunity to learn more from your peers.

Question 1 (Paul Curley, Editor of the 529 Dash): What is working for you in terms of college financial planning?

Answer 1 (Steve Stanganelli, Founder of Clear View Wealth Advisors): I focus on the strategy side of college financial planning as opposed to products, and have had a lot of experience with late stage college financial planning. All too often, the client will come to me the summer before their son or daughter starts college, and at that stage, I help them to create a holistic cash flow plan. This includes the evaluation stage to see how much they can pay from an ongoing cash flow basis, review how they can most efficiently borrow and check to see if there are other resources available to them such as in-laws that are willing to contribute towards the goal. The later the planning begins, the higher the level of focus on cash flow management, which includes navigating the student loan process. One mental hurdle that I come across is that the parent or parents feel like they make too much to receive aid, but don’t make enough to cash flow the cost of college without taking on loans. In these circumstances, I wish they had come to me earlier, or at least earlier than the summer before college starts as does happen all too often.

Question 2: How do you integrate college financial planning into your discussions with a client?

Answer 2: The process begins from the very beginning during the discovery stage. With retirees or pre-retirees, we ask if they have grandchildren and if they are looking to help them out. If they are looking for financial planning around higher education only, we have a module for that. That being said, the process of college financial planning is fully integrated with other savings goals, and I reinforce the need to start soon.

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

Answer 3: In 2014 when I ran to become a state representative, part of my platform was to incorporate a state tax credit for families to make 529 contributions. While Massachusetts recently joined the thirty other states that provide a tax credit or deduction on 529 contributions, more states should provide incentives, or increase the size and/or flexibility of those incentives to help even more families to save. Additionally, more state and municipal funds should be allocated to subsidize tuition for in-state schools and community colleges.

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

Answer 4: With tuition inflation so high, one trend that I have seen is the opportunity to become the big fish in the small pond as a means to receive more financial aid. In the case that the parents choose to get a full ride at a smaller named school as opposed to paying full price at the brand named school, the parents and students are able to save the money for graduate school. More families should consider this perspective. Second, we have seen families saving for college, but not saving enough. For example, a parent that saved $70,000 per child to go to college is only able to pay for roughly 1-year of private school or 2-years of public school. Starting the process is a good first step, and parents should start planning and saving earlier as cash flowing the remaining cost is still not an option for many. Lastly, planning for college is an emotional decision for families, and so looking at college financial planning impartially is hard. For example, while getting into the brand named school to keep up with neighbors and colleagues may feel gratifying in certain social circles, they may also be losing from a financial burden perspective. Therefore, families need to recognize the expense and plan for it accordingly. Pushing the planning off doesn’t work, and that’s why I have so many families come into my office their junior- or senior-year in high school. I wish we connected earlier, as winging it through the do-it-yourself method results in too many piecemeal decisions. As such, I help to create and present the holistic large picture to my clients, and get them to act sooner rather than later through an integrated approach.

Question 5: Are there any questions that I overlooked?

Answer 5: One situation that I have recently come across more and more is the intersection of divorce financial planning and college financial planning. When families unwind their emotional, legal and financial situation, all too often college financial planning gets left behind and is not addressed. Therefore college financial planning should be addressed in the early steps of the divorce financial planning process, and families should recognize the value of hiring someone to help unwind and integrate the seemingly different financial issues. Lastly, and given the rate of tuition inflation, guidance counselors and college financial planners should note the importance of “fit” in the college selection process, as the downfall of choosing the wrong college rises as the cost of tuition climbs higher and higher.

Editor’s Final Note: Thank you Steve Stanganelli for your time and insight for this article. Also, I would like to provide a special thank you to the readers for learning from your peers, for your support and your engagement.