State Treasurer Denise Nappier announced Wednesday that the state is now offering its first advisor-based 529 college savings program to be launched and managed by The Hartford Financial Services Group.
529 college savings programs offer a way for people to invest money to be used later for a student to pay for tuition or other college related expenses while shielding the investment from some taxes, including income tax. Previously, Connecticut residents looking to invest in a state-based plan only had the option of using CHET, or Connecticut Higher Education Trust, a direct-sold 529 plan.
The new program, named CHET Advisor, is to offer the same advantages as CHET with investors receiving advice from a financial advisor.
Jeffrey Coghan, The Hartford’s Assistant Vice President and Director of 529 Programs, was on hand at Wednesday’s event to offer results of a Hartford-sponsored survey, which indicated that people who utilized a financial advisor were twice as likely to invest in a plan and demonstrated a greater understanding of 529 investment programs.
Nappier said The Hartford was chosen to manage the new tax-advantaged college savings plan after a competitive bidding process.
Literature provided by The Hartford stated that the company manages a similar program called SMART529 in West Virginia.
While applauding her decision to provide Connecticut residents with more investment options, Jeff Wright, her Republican opponent for State Treasurer, questioned the timing of Nappier’s announcement.
“I’m excited that Ms. Nappier has finally decided to add another option for Connecticut, something I’ve been advocating since I entered this race, but she’s been there for 12 years. Why wait until 27 days before the election to make that decision?” the Newington Mayor asked Wednesday.
Nappier explained that because of the bidding process works the announcement was being made Wednesday.
In 2006 the last time Nappier was up for re-election she proposed a state income tax deduction for residents who participated in CHET, the original 529 college savings plan. The proposal received bipartisan support from the legislature that year.
In addition to managing the CHET Advisor program, The Hartford also announced that it will be offering a new $100,000 scholarship. Company president and CEO, Liam McGee, said the details of the new scholarship are still being worked out and will be released as they become available.