[USER]

I I had a friend recently mention to me she had a friend thats a financial planner and she would be willing to explain the 529 process for me.

My naïveté didn’t see that this would turn into an entire other conversation.

In any case, what this person said in the research I’ve done on my own does not match up and I’m hoping you can help.

She said that for my state of Massachusetts the 529 plan through Fidelity has an upfront cost of 5.5% set by the mutual fund family and that’s basically an upfront sales charge and for this reason she was suggesting I go with a different state and use Vanguard.

That would mean I wouldn’t get the tax benefits in Massachusetts of about $2000 however, when I look online, I don’t see anything about an upfront cost, and in fact it breaks it down to be much less than what she was quoting.

On a separate issue, I asked about flat fees because if they were going to push forward with a conversation about retirement, I would ask the questions that I’ve learned here.

I didn’t realize, how much it was going to feel like a sales call.

I asked how if they operated as fee or commission based, how much to have just a plan/recommendations given on our finances and a few itger wuestions.

They quoted it could be anywhere from $5000-$30,000 to have a flat fee financial plan.

However, if we bring our assets to their company, it could go as low as $2500. Does this seem about right?

Oh and their advisory fee is 1.65 % … by the way I am not opening an account with them.

Thank you for any help you can offer!

[Ra]

Yeah, no
The 5.5% is typically a front load sales charge on old school mutual funds, traditionally sold by financial advisors.

So, if you were to get one of those in your 529, then she might be right.

However, I don’t see Fidelity offering any of those funds.
Next, I’m a flat-fee financial planner and I’ve yet to see anyone start at $5K let alone go to $30K unless they are highly specialized and working with UHNW individuals.

Bottom line, like others have said, run 🏃‍♀️
Go to the MA website and open your 529 per their direction and select an S&P 500 index fund or an age-based fund. Done.

[Jeff]

People really need to invest in educating themselves. I know it’s a boring subject for some people but for God’s sake we’re talking about your treasure!

I started out using a fee based financial planner and it was a disaster. Moved everything to Fidelity after less than 6 months.

I’m actually grateful that it happened.

It was then that I realized that the saying “What do you call a medical student who is last in their class? The answer is Doctor. Also, applies to Financial planners…

[Dan]

Only bits and pieces of that sound right. Is it sometimes advantageous to use another state’s 529? Yes.

But nothing else sounds right – and 1.65% is outrageously high.

[Paul]

This is what happens when most folks don’t read a book after finishing high school.

[Patrick]

Stay far, far away from that person. Those rates are incredibly expensive. Fidelity runs MA’s 529 program and their funds are as low as 0.10%.

[Bill]

Yikes, run away from this commissioned salesperson.
529 plans started through the state have no upfront fees like that.

Those are called “loads” and only the slimiest of companies do that in 2025

[Ellen]

What company does she work for? Fidelity? Those fees sound ridiculous to me. $30,000 for a flat fee financial plan?

[Author]

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