How Should Advisors Talk to Clients About Education Planning?

Planning and saving for a child’s or grandchild’s education funding can be challenging given the high cost of education and the number of options available for saving. But planning ahead is essential. A 2021 study from Sallie Mae reported that, in 2020, only 52% of families created a plan to pay for all years of college before their child enrolled.

The right advice and perspective from Financial Advisors can make all the difference.


Lessons Learned

Financial Advisor Peter Leppones, CFP®, with Apella Wealth, describes his own family situation:

“My daughter wanted to attend the nursing program at Sacred Heart University. It was the most expensive school on her list, but it was her number one choice,” he recalls.

“We sat down and created a spreadsheet that included the full cost of attending her top choice, the full cost minus a scholarship or merit money, what we have saved, and what she would need in loans,” he continues. “Then we multiplied that number by four. There was a big number at the end. Try showing that number to an 18-year-old. It didn’t necessarily resonate.”

Leppones’ daughter ended up attending Sacred Heart and is currently halfway through.

“Now, all of a sudden, that number is staring her in the face—and it makes a lot more sense to her,” he shares, adding, “She’ll be fine. She’ll be a good earner and she’ll have to live at home for a few years to get it all paid off, but that won’t be an issue.”

The conversation is the important part, Leppones emphasizes. “I see people get jammed up because they haven’t had that discussion. If you haven’t done the planning and if you haven’t set the money aside, by the time high school is done, most families can’t make a huge impact.”

Stacie Nemetz, CFP®, AIF®, with Apella Wealth, relates her family situation:

“I had the same conversation with my daughter. I said, ‘We want Neiman Marcus at Costco pricing.’ And we talked about how that could get done. Having that discussion with an 18-year-old was an eye-opening experience,” she admits.

“I encourage my family and my clients to have the same discussion with their children about real dollars and cents,” Nemetz adds. “We should be providing financial education to our kids early on. College planning is the first major decision many kids have to make—and it has a long-term financial impact.”


College Savings Options

While an initial conversation is key, the next steps involve looking at options to help offset the cost of education funding, including:


Merit Aid

Merit aid is financial aid awarded to students based on their academic or extracurricular accomplishments, rather than their financial need.

According to a U.S. News annual survey of 1,032 ranked colleges, the average merit award to full-time undergraduates was $12,088 in the 2022-2023 academic year. In 2024, National Merit Scholarship Corporation will provide students with more than $35 million over 8,050 awards.

“Merit money is based on the family’s expected contribution, which comes straight from their tax return, predominantly because that captures assets. Assets held in a child’s name count against them more than those held by the parents,” explains Nemetz.


529 Plans

529 plans are tax-advantaged savings plans designed to help pay for education.

“They can be a good tax move for high-net-worth people because it provides a way they can move money out of their taxable state through accelerated gifting and things of that nature,” recommends JT Lavery, Associate Director of Sales at Symmetry Partners.

According to a 2021 study from Sallie Mae, 85% of families used parent income and savings, contributing $13,721 on average; while 37% of families used a college savings plan, such as a 529, to cover the cost of college.

Leppones shares that new grandparents often ask what type of account to set up for their first grandchild. “With a lot of the changes that have come around, I’m encouraging everyone toward a 529 plan. Based on the plan and the state you’re in, there could be a potential tax break for the contributions,” he says.

“The change in the tax laws and what you can do with 529 plans makes them far more attractive today than they’ve ever been,” adds Nemetz.

“The hurdle to getting into the 529 for most parents, grandparents, and custodians, is a ‘use it or lose it’ feeling. Questioning: What if I overfunded? What if my child got scholarships? What if they didn’t go to a four-year university?” she notes. “All that uncertainty and those barriers are greatly diminished now. And you can use different state plans to get attractive returns.”


Target Date Funds

Target date funds are created to maximize an investor’s returns by a specific date. While the concept of target date investing is typically associated with retirement plans, Lavery points out the similarity with college planning—specifically using 529 plans. They both have a set end date in mind.

“Once a child turns 18, they’ve typically graduated from high school and they may be planning to go to college, which requires payment versus retirement, where the timing can be more flexible because you can always continue to work,” he explains. “But the purpose of that target date is that it’s set in stone. And if you know your child or grandchild is going to be going to further their education, it’s important to plan accordingly.”

“The portfolio will become more and more conservative the closer the student gets to their start date,” notes Leppones.



Trusts are another educational savings option. In addition to enabling a trustee to hold assets on behalf of a beneficiary, as part of an estate plan, they’re traditionally used to minimize taxes.

Nemetz shares that she’s worked with some parents and grandparents who will set up trusts for education purposes. “Honestly, if they’re able to fully fund education, then they’re not as worried about the funding formula,” she says.

Working with clients to create strategies to help them save for a loved one’s education provides them with peace of mind, knowing their assets will help educate the next generation. And it all starts with a conversation.


Interested in learning more about how to help your clients develop an education plan? Watch a replay of our webinar Death, Education, & Taxes, which was featured during Symmetry AdvisorFest 2023.



Symmetry Partners, LLC, provides this communication on this site as a matter of general information. Information contained herein, including data or statistics quoted, are from sources believed to be reliable but cannot be guaranteed or warranted. Due to various factors, including changing market conditions and/or applicable laws, the content may not be reflective of current opinions or positions. All content on this site is for educational purposes and should not be considered investment advice, recommendation or offer of any security for sale. Symmetry Partners does not provide tax or legal advice and nothing either stated or implied in this material should be inferred as providing such advice. Symmetry Partners does not approve or endorse any third-party communications on this site and will not be liable for any such posts.

Symmetry Partners, LLC is an investment advisory firm registered with the Securities and Exchange Commission (SEC). The firm only transacts business in states where it is properly registered or excluded or exempt from registration requirements. Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Symmetry Partners, LLC and Apella Capital, LLC, DBA Apella Wealth are affiliated entities.

Investing involves risk, including the loss of some or all of your principal. Diversification seeks to reduce volatility by spreading your investment dollars into various asset classes to add balance to your portfolio. Using this methodology, however, does not guarantee a profit or protection from loss in a declining market.

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