News Release

NASD Issues Investor Alert on 529 College Savings Plans

Washington, D.C.—Concerned that investors may not be getting their money's worth from their 529 college savings plans, NASD has issued a new Investor Alert to help investors sort through the wide range of plans available, compare competing plans and make an educated choice about which 529 plan best suits their needs.

College Savings Plans - School Yourself Before You Invest also provides a comprehensive review of 529 plan state tax breaks - currently offered by 25 states and the District of Columbia - as well as advice for comparing plan fees and expenses. This Alert joins other NASD investor education college saving resources on the Web - including the brochure Smart Saving for College and the 529 Plan Expense Analyzer.

"The good news is that there's no shortage of plans available - every state offers at least one 529 plan, and there are currently more than 80 college savings plans to choose from," said NASD Vice Chairman Mary Schapiro. "But no two plans are the same. Fees and expenses vary greatly, and high fees and expenses can cut significantly into your returns, so you have to choose carefully."

Also, an ongoing NASD examination sweep that now involves 20 brokerage firms shows that a high percentage of people who buy 529 plans through brokers buy out-of-state plans. "We're concerned that those investors may be missing out on some important state tax benefits," Schapiro said.

NASD is the leading private-sector provider of financial regulatory services, dedicated to bringing integrity to the markets and confidence to investors through effective and efficient regulation and complementary compliance and technology-based services. NASD touches virtually every aspect of the securities business — from registering and educating all industry participants, to examining securities firms, enforcing both NASD rules and the federal securities laws, and administering the largest dispute resolution forum for investors and registered firms. For more information, please visit our website at