Ian Salisbury discusses Barclays’ plans for an ETF-centered 529 plan in his recent Wall Street Journal article, “Barclays Offers College Savings Usings Its ETFs”.
Barclays is the first major fund firm to design a 529 plan around its ETF Lineup.
Investors sometimes receive benefits if they invest in a 529 plan affiliated with their home state. For example, Barclays’ iShares 529 plan is connected with Arkansas and residents will benefit from state income-tax deductions.
Barclays’ 529 plan will be marketed though fee-based financial advisors. For the casual investor, this means the iShares 529 plan will likely be more expensive than plans sold directly to investors that also incorporate index funds.
However, the index focus means the iShares plan is likely to have a cost advantage over other types of 529 plans. Barclays has stated publicly that the 529 plan is competitively priced.