More American families are asking financial advisers for help saving for college, and nearly all those families have accumulated much more toward their goal than the typical family, according to a Fidelity Investments survey.
About 89% of those who have an adviser already have started saving funds to cover the rising cost of tuition and other college expenses, compared with 69% of all families, according to the survey, which comprised 2,538 families with children 18 and under and annual income of at least $30,000.
About 57% of families using an adviser are investing in a tax-advantaged college savings plan, such as a Section 529 plan.
One-third of parents use advisers to help with college savings decisions, a jump from just 21% seven years ago when Fidelity began its annual College Savings Indicator study.
Those working with an adviser have accumulated 57% of their goal so far, compared with the average family, which has amassed 34% of its college savings goal, according to the survey, conducted by Research Data Technology Inc. in June.
Advisers also are helping clients talk to their kids about college costs.
About 45% of families with an adviser use materials from their adviser in discussions with their children about saving for college, and 10% of advised families have their student meet with the professional themselves to discuss college finances.
“Paying for college is a stressful topic, and adding a third-party financial professional may help take some of the emotion out of these highly charged, yet important, conversations,” said Matt Golden, vice president of college savings for Fidelity Financial Advisor Solutions.
Cheaper options
Advisers can help parents and students discuss some options for saving on costs, such as going to a cheaper public school over a private school or having the student attend a community college for two years and then moving to a more expensive institution for the final two years, he said.
The college topics that parents in the survey said they are talking to their advisers about include strategies for efficient college savings, tax benefits of 529 plans, strategies for efficient withdrawals of college funds, parents' and children's debt, and the financial aid process.
About a quarter of those who have advisers said they also have discussed the child's anticipated salary after graduating, researching schools and the major that the student plans to pursue, according to the study.
