The Hartford—a provider of 529 college savings plans—said its research found that grandparents might be open to hearing more about how 529 savings plans can help them save for their grandchildren’s education. Although many grandparents want to contribute financially to their grandchildren’s education, the majority (64%) are not currently saving anything.
Advisers can help coordinate between parents and grandparents to fund college education for their children and grandchildren, according to a release from The Hartford. As adults are struggling to find the funds for their children’s college education in this economy, most grandparents (65%) are willing to contribute. However, many grandparents have not discussed it with their adult children—it seems a lack of communications between the generations has stood in the way. Three-fifths of grandparents say their children could benefit with a discussion with a financial advisers about a college savings strategy.
“This statistic presents a wonderful opportunity for financial professionals to initiate the college savings conversation between their Boomer clients and the clients’ children,’ said Jeff Coghan, director of
529 programs at The Hartford, in the release. “Advisers can help their clients and potentially grow their business by tapping into the client base of the younger generation.’
Although all of The Hartford’s survey participants currently work with a financial adviser, only 33% have had a discussion with their adviser about college savings for their grandchildren. Feedback from those who have had a college savings conversation is positive: 76% said the discussion came at the right time; 88% said their adviser brought up tools and strategies for college savings; and 61% asked their adviser for more information about college savings options, according to The Hartford.
Nearly half of The Hartford’s survey participants who do use a 529 college savings plan enrolled in the program at the advice of their own financial professional. Participants also enrolled because 529 plans make it easy to save (61%), offer tax benefits (40%), and allow them to maintain control over the investments (59%).
The Hartford’s third annual college savings survey was conducted online by Praxis Research Partners in July, surveying 607 grandparents who have at least one grandchild under the age of 15 and who work with a financial adviser.