Paul Curley, Director of College Savings Research with Strategic insight, presented the attached Powerpower deck to executive board members and employees of 529 program managers and state agencies on October 22, 2015 at the College Savings Plan Network (CSPN) 529 Prepaid Forum 2016. The presentation took place at the Virginia 529 College Savings building in North Chesterfield, Virginia.

1. 2015 529 Prepaid Forum:
Top-10 Trends Driving Participation Today
October 22, 2015
N. Chesterfield, Virginia
www.sionline.com
Paul Curley, CFA
Director of College Savings Research
Editor of 529 Dash
Strategic Insight, an Asset International Company
pcurley@sionline.com
@PaulCurleyBC
1

2. Top-10 Trends Driving Participation Today:
1) Education
Prioritization & Value Increasing
• Creates freedom & independence to
pursue dream careers
• Therefore saving for college is important
Issue: Death, Taxes and Student Loan Debt?
Source: Strategic Insight, www.sionline.com
93% of Parents Agree that College Savings
is Part of a Holistic Financial Plan
2
“I want my child to
have the best
education”
- Parent
(Washington, DC)
“529’s are the best
plans available for
clients that wish to
invest in their kids
education”
- Parent (Texas)

3. Top-10 Trends Driving Participation Today:
2) Tuition Inflation/Student Loan Debt
Source: Strategic Insight, College Board
www.sionline.com
4% of Parents Project No Increase or Decrease;
33% of Parents Project 8% or More Increase
3
“Growth of 529
plan business has
continued to grow
and I see no
reason for it to
slow down
especially given
inflation rate of
college costs.” –
Financial Advisor
(New Jersey)
4-Year Cost of Private Institution in 18 Years:
• $429,407 (tuition, fees and room & board)
• 4.6% 10-year annual average increase: Private
• 5.3% 10-year annual average increase: Public
Issue: Is Tuition Inflation a Real Concern?
• Yes: Still high, though gradually decreasing
• Will this impact product demand?

4. Top-10 Trends Driving Participation Today:
3) Political Uncertainty
Goal of Free Community College
• President Obama Proposal
• Presidential candidate proposals
Department of Education
• Income Based Repayment
• Arnie Duncan steps down
• FAFSA update
Issue: Do We Need to Update Contract Language or
Products to Facilitate Conversions?
Source: Strategic Insight, www.sionline.com
30% of Non-529 Users Think that 529s are Right for Them
4
“Under the Obama
Proposal, if
community colleges
are to be free for the
first two years, I
would like to know
how this is an
advantage or
disadvantage under
the 529 savings plan”
- Parent (California)

5. Top-10 Trends Driving Participation Today:
4) Tax Efficiency
Federal & State
• Investment market volatility
• Consumer confidence
• Job market volatility
Value of Dedicated Account for Dedicated Goal
Source: Strategic Insight, www.sionline.com
5
The appeal of
(529) prepaids is
the ability to save
on the cost of
future tuition, and
protection from
market volatility!”
– Nancy Farmer,
Private College
529 Plan
68% of Non-529 Saving Parents Reported Federal
Government Offering More Tax Incentive as Important Driver

6. Top-10 Trends Driving Participation Today:
5) Financial Aid Perceptions
What Percent Affected?
• 24% of non-savers report “Expect
scholarships and financial aid to cover
costs”
Issue: Perception of Financial Aid Impact
• Is this a real concern?
Source: Strategic Insight, www.sionline.com
32% of Advisors Report “Negative Impact of Savings
on Financial Aid Eligibility” as Hurdle for Clients
6
“Saving more will
reduce the financial
aid chance”
- Parent (Oregon)
“Need to increase
college savings,
because expected
scholarship and
financial aid will not
be sufficient”
- Parent (Texas)

7. Top-10 Trends Driving Participation Today:
6) Estate Planning/Grandparents
Intergenerational Wealth Transfer
• 529s help estate and legacy planning
Issue: Money is Motion
• Supports 529 planadvisors by maintaining
book of business, and getting new clients
Source: Boston College Center on Wealth & Philanthropy
National Wealth Transfer and Potential for Philanthropy Technical Report
Source: Strategic Insight, www.sionline.com
$59 Trillion in Wealth to Transfer Down to Heirs (2007 to 2061);
Over 90% Move Book During Transition
7
“529 plans can be
done by
grandparents”
- Parent (New York)
“More marketing is
needed to explain
the advantages of
these plans,
especially to
grandparents”
- Parent
(New Jersey)

8. Top-10 Trends Driving Participation Today:
7) Demographics
529 Prepaid User Demographics Nationwide
• Income
• 44% earn less than $100k (vs. 51% for 529 savings plans)
• 68% earn less than $150k (vs. 78% for 529 savings plans)
• Parent Age: 41% between ages of 30 and 39
• Beneficiary Age: 31% 5-10; 18% 11-13; 24% 14-17
• 14% over 18 years old (9% 18-21)
• Tuition Inflation: 71% project over 5%
• 26% project tuition inflation over 8%
Issue: Sell in Smaller Blocks to Expand Distribution?
Source: Strategic Insight, www.sionline.com
32% Report Net Worth Less Than $150k,
Compared to 42% for 529 Savings Plans
8
“I have increased
(savings rate in
529 prepaid plan)
every year as my
daughter gets
closer to college”
- Parent (Nevada)

9. Top-10 Trends Driving Participation Today:
8) Distribution Channels
Employee Benefits (New Nevada Legislation)
• Government: Income Based Repayment
• Private: PWC student loan repayment
Fee-Based Compensation Model Increasing
• Helps 529 prepaid plans (no-load)
• Issue: Add load to plan?
• SMA increasing asset growth (38% 3-Year)
Source: Strategic Insight, www.sionline.com
30% of Employees Would Certainly Open a
529 Account if Employer Offered Benefit.
9
“Biggest Obstacle
is that my
employer needs to
offer it as a
benefit”
- Parent
(North Carolina)
“I have never had
an employer turn
down offering a
529 plan”
- Financial Advisor
(Florida)

10. Top-10 Trends Driving Participation Today:
9) Technology
Gifting (in lieu of toys or flowers)
Robo Advisors (combine gifting & selection)
• Broker-Dealer - selection “model issue”
Publishing – Cascade Engagement
• CRM (client relationship management)
• Newsletters, social media, videos
Source: Strategic Insight, www.sionline.com
87% of Advisors Respond that Reducing Paperwork Needed
to Set Up and Maintain Account as Important
10
Functionality in
demand: “Ability to
send information about
the account to other
family members for
birthday and
Christmas”
- Financial Advisor
(Tennessee)

11. Top-10 Trends Driving Participation Today:
10) Marketing
529 Prepaid & Savings Plans
• 55% of parents with prepaid plans in “open states”
also have a 529 savings plan
• 86% of parents using both expect to cover majority
of expenses, compared to 76% for prepaid users
and 72% of 529 savings plan users
• 100% of advisors selling prepaids also sell savings
Issue: Can we Sell Them Together? (Cover Later Today)
Source: Strategic Insight, www.sionline.com
62% of 529 Prepaid Users Expect to Increase Savings
Rate in Plan Over Next 3 Years
11
“Learn more in just
5 minutes to know
how the plans
work”
- Parent
(California)

12. Top-10 Trends Driving Participation Today
1) Education
2) Tuition Inflation
3) Political Uncertainty
4) Tax Advantage/Market Volatility
5) Financial Aid
6) Estate Planning/Grandparents
7) Demographics
8) Distribution Channels
9) Technology
10) Marketing
www.sionline.com
Thank You
12
Sources:
- Strategic Insight 529
Industry Analysis
- Strategic Insight 529
Distribution Analysis
- 529 Conference 2015
- College Board
- Boston College
Center on Wealth &
Philanthropy

13. Thank you
www.sionline.com
Thank You
13
Contact Information:
Paul Curley, CFA
Director of College Savings Research
Editor of 529 Dash
Strategic Insight, an Asset International Company
pcurley@sionline.com
@PaulCurleyBC