Reader’s Perspective: Question and Answer with Vince Sullivan, Founder of 529NOW

This article features an interview with Vince Sullivan, Founder of 529NOW, LLC. Based in Denver, Colorado, Vince’s experience as an industry consultant is built off of firsthand experience in working with intermediaries for over twenty four years. Over that time period, he was a wholesaler working with advisers across all distribution channels for a variety of products ranging from SMAs to Mutual Funds to Annuities to 529s. During that time, Vince has worked with a variety of large organizations such as Edward Jones, Fidelity Investments, Jackson National Life, Janus and OppenheimerFunds. Building upon his experience with larger organizations, he has launched his own firm of 529NOW to increase usage of 529s through continuing education, consulting and speaking engagements. Also, thank you Vince for presenting at Strategic Insight’s 529 Conference 2017 on the “Advisor Perspective: Top Producer’s Panel” on October 17, 2017. Last but not least, Vince is a fellow Boston College Carroll School of Management graduate. You can learn more about Vince Sullivan and 529NOW at http://www.529now.com/, and thank you Vince for your time, insight and support for working with me on this article. Please read the question and answers to learn about his perspective on college financial planning, and hope that this article provides you with an opportunity to learn more from your peers.

Question 1 (Paul Curley, Editor of the 529 Dash): How and why did you first get started in the college financial planning industry?

Answer 1 (Vince Sullivan, Founder of 529NOW): I joined the 529 industry when I began working at CollegeInvest, the state plan administrator for the Colorado 529 program, in 2013. I had worked previously within the financial services industry for over twenty years and was aware of what 529 plans were, but did not understand their true power, flexibility, and tax incentives prior to joining the State of Colorado.  

Question 2: How much of a role do intermediaries play in recommending of 529 plans?

Answer 2: Intermediaries can play an instrumental role in bringing 529 college savings plans to the awareness of their clients. Unfortunately, many intermediaries do not discuss 529 plans with their clients, usually for one or two of the following reasons:
–    They do not want to be ‘on the hook’ for a specific 529 plan recommendation for liability and licensing reasons. (think tax professionals)
–    They don’t see the time versus income tradeoff sufficiently profitable for them to discuss with their clients. (think financial advisors)
Most intermediaries will do the right thing here and offer assistance on how to open a 529 and provide some direction about the most suitable 529 plan for their individual client situations and risk tolerance – they see the loyalty, long-term relationship, and other goodwill-type of loyalty rewards associated This article features an interview with Vince Sullivan, Founder of 529NOW, LLC. Based in Denver, Colorado, Vince’s experience as an industry consultant is built off of firsthand experience in working with intermediaries for over twenty four years. Over that time period, he was a wholesaler working with advisers across all distribution channels for a variety of products ranging from SMAs to Mutual Funds to Annuities to 529s. During that time, Vince has worked with a variety of large organizations such as Edward Jones, Fidelity Investments, Jackson National Life, Janus and OppenheimerFunds. Building upon his experience with larger organizations, he has launched his own firm of 529NOW to increase usage of 529s through continuing education, consulting and speaking engagements. Also, thank you Vince for presenting at Strategic Insight’s 529 Conference 2017 on the “Advisor Perspective: Top Producer’s Panel” on October 17, 2017. Last but not least, Vince is a fellow Boston College Carroll School of Management graduate. You can learn more about Vince Sullivan and 529NOW at http://www.529now.com/, and thank you Vince for your time, insight and support for working with me on this article. Please read the question and answers to learn about his perspective on college financial planning, and hope that this article provides you with an opportunity to learn more from your peers.

Question 1 (Paul Curley, Editor of the 529 Dash): How and why did you first get started in the college financial planning industry?

Answer 1 (Vince Sullivan, Founder of 529NOW): I joined the 529 industry when I began working at CollegeInvest, the state plan administrator for the Colorado 529 program, in 2013. I had worked previously within the financial services industry for over twenty years and was aware of what 529 plans were, but did not understand their true power, flexibility, and tax incentives prior to joining the State of Colorado.

Question 2: How much of a role do intermediaries play in recommending of 529 plans?

Answer 2: Intermediaries can play an instrumental role in bringing 529 college savings plans to the awareness of their clients. Unfortunately, many intermediaries do not discuss 529 plans with their clients, usually for one or two of the following reasons:

– They do not want to be ‘on the hook’ for a specific 529 plan recommendation for liability and licensing reasons. (think tax professionals)

– They don’t see the time versus income tradeoff sufficiently profitable for them to discuss with their clients. (think financial advisors)

Most intermediaries will do the right thing here and offer assistance on how to open a 529 and provide some direction about the most suitable 529 plan for their individual client situations and risk tolerance – they see the loyalty, long-term relationship, and other goodwill-type of loyalty rewards associated with introducing and executing on the idea of getting a 529 plan opened.

Question 3: Of all the recent 529 changes, which one appears to be the biggest 529 plan change for intermediaries?

Answer 3: I think it is the new category of qualifying 529 expense of computers and related services. I think this is even bigger than the recent $10,000 expansion for qualifying K-12 tuition because it simplifies the conversation about qualifying expenses. The old rules allowed for computers to be a qualifying expense only if the institution required it, and so it was quite confusing and determined by the institution. Consider this: A family with two children in college at the same time could, under the old rules, have a computer-related cost and 529 distribution be a qualified expense for one child but not the other! Now that this ‘computer’ expense is uniform, and goes beyond just computers to include peripherals (think printers), software and internet service, and so this provision change is a big thing, and a good thing for families – the clients of intermediaries. Anything to simplify the 529 conversation is what works for advisors and their clients.

Question 4: How can advisers add more value to clients in the college financial planning conversation?

Answer 4: By starting the conversation with the question: “What are you doing to help save for the college expenses?” Then, be tenacious with clients and make them commit (follow-through, be accountable) to making saving for college part of their general financial plan. Such a basic concept, yet so many families with college-bound children never get started, or have misconceptions about how 529 plans can help them. Help clients create a new habit of saving for college like they save for retirement, for example…start small, commit to increases tied to inflation, birthdays, bonuses, or student achievements. Get the account opened. Throw out the excuses and incorrect client “programming” associated with 529 plans regarding financial aid, for example. Being an advisor sometimes means telling people what they don’t want to hear because telling them is the right (and fiduciary) thing to do – in this case, save money: what is so bad with creating and sticking to a plan of saving, after all?

Question 5: Where can we go to learn more?

Answer 5: There are many resources available for advisors, their clients, and the general public to find out more about the benefits and details of how 529 plans work. A few of the public sites I particularly find useful are www.nces.ed.gov, www.fafsa.ed.gov, www.irs.gov.and and www.collegeboard.org. In addition, individual states each have their respective 529 program websites where anyone can become familiar with state-specific 529 plan programs. One final resource I’ll mention here that I find extremely helpful is a document each 529 plan must offer called the Plan Disclosure Statement, or PDS – in this document, you can find detailed plan information including investment choices, descriptions, performance, cost, state tax provisions, and other detailed plan information. I call this document a prospectus on steroids! If you’d like to discuss this further, you can also contact me directly through my company, 529NOW.

Editor’s Final Note: Thank you Vince Sullivan 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. Have the college financial planning discussion today.

Strategic Insight 529 Conference 2017, “Advisor Perspective: Top Producer’s Panel”, Ritz-Carlton Orlando, October 17, 2017