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IA Advisor 529 Plan |
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State Provider: Iowa; Net Assets ($mil):
$37.4 as of
09-30-09 |
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This advisor-sold plan will be making some improvements in the spring of 2009, but not enough to earn our endorsement. The big change here will be the addition of three Vanguard ETFs, which is a first in the 529 world. That adds some appeal, but overall the investment options are still a mixed bag: The underlying funds range from good to mediocre. Costs are still an issue too, especially when the plans' administration fees--program management, distribution, marketing, etc.--are juxtaposed with the new, ultra-cheap ETFs. For example, the total administration fees of 0.65% are six times greater than the underlying Total Stock and Bond Market ETFs. Simply put, those administration fees erode the main appeal of the low-cost ETFs. The rest of the plans' total fees aren't a bargain either and range up to a hefty 1.75%. Those fees can add up over time, potentially outweighing the benefits of the state's income-tax deduction on contributions ($2,685 per beneficiary in 2008, adjusted annually for inflation). Residents should consider the state's direct-sold option in order to maximize their tax savings. And those working with a broker, especially non-residents, can find better investment options at a lower cost elsewhere.(Information as of 04/08/2009) |
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| Availability: Sales Channel |
Resident: Broker
Non-Resident: Broker
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| Annual State Tax Deduction |
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Up to $2,800 (S),
5,600 (J)
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| Max Investment/Beneficiary |
| Mos. to Qualified Withdrawal |
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Public, Private & International
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| Static Portfolios and Self-Directed Funds |
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| US Stock
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Bond |
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| Total International Funds: 2 |
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| Underlying Funds’ Ratings |
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| Overall Morningstar Rating |
# Equity
Funds |
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# Bond
Funds |
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| Ratings as of
10-31-09 |
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| Range |
0.4 |
| 529 Plan Avg |
0.8 |
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| Portfolio Expense Ratio Range |
| Fee to Change Beneficiary |
| Share Classes: Sales Charge |
| A:
3.75 – 5.5% (front-load) |
| C:
1% (deferred-load) |
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| Initial Purchase |
$50 |
$50 |
| Additional Purchase |
50 |
50 |
| Initial (AIP) |
50 |
50 |
| Additional (AIP) |
50 |
50 |
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