529 Assets Surge, But Advisors Say The Plans Arent For Everyone

But often, theres a direct conflict between saving for college and retirement goals, he observes.

"Parents have one of two problems and can choose which one they are going to face," Cusick says. "Theyre definitely going to be at a disadvantage in achieving at least one of those goals."

Boomers who are coming to advisors at this late stage in planning have few choices, according to Cusick.

"They can tap home equity or access low cost loans in todays relatively low interest rate environment, but they cant make money grow on trees," he says. "Theyre going to have to compromise other objectives."

Suitability is a key issue for advisors in recommending 529 plans, he adds.

Suitability "inevitably comes up, so we continue to use [the 529] in a judicious manner," he says. "Advisors need to make sure they do the right thing for the client and not for themselves. If we keep selling people 2.5% fee products because its great for the firm, thats bad for the client."

Robert J. Kuehl, a certified financial planner with H. C. Denison Co., Sheboygan, Wis., says he is "neutral on 529 plans except in specific cases. I dont think for the average client they are the most practical or prudent approach. They are best for high net worth individuals."

Reproduced from National Underwriter Edition, June 25, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.