Fidelity Cuts Fees, Makes Investment Changes for 529 Plans

For direct-sold plans (The UNIQUE College Investing Plan, offered by the State of New Hampshire, California’s ScholarShare College Savings Plan, Massachusetts’ U.Fund College Investing Plan, the Delaware College Investment Plan, and the Fidelity Arizona College Savings Plan), Fidelity has cut program management fees in half (15 basis points) for its index portfolios, and by one–third (10 basis points) across the plans’ active portfolios, according to the announcement.

Total index portfolio fees now range from 0.25% to 0.35% of plan assets. Total actively managed portfolio fees now range from 0.59% to 1.04% of plan assets. All state-sponsored direct-sold plans continue to have no annual account fee, the announcement said.

For adviser-sold plans (the Fidelity Advisor 529 Plan offered by the State of New Hampshire and California’s ScholarShare Advisor College Savings Plan), Fidelity has cut the program fee by one-third, with total fees now ranging from 0.84% to 1.48% of plan assets.

In addition, over the next twelve months, Fidelity will be adding new funds to its eight age-based portfolios. The Fidelity Emerging Markets and Fidelity Advisor Emerging Markets funds will be new additions to the direct- and adviser-sold plans’ age-based portfolios, respectively. The Fidelity Advisor High Income Fund is also being added to the adviser-sold plans’ age-based portfolios.

Fidelity-managed 529 Plans will also be increasing international equity exposure in both direct- and adviser-sold plans’ age-based portfolios from a current range of 0% to 20% to 30% of the overall equity allocation. The increase in international equity exposure will take place incrementally over the next twelve to eighteen months and comes as part of a firm-wide enhancement across Fidelity’s asset allocation portfolios and online guidance tools, according to the announcement.

Fidelity provides phone access to representatives 24 hours a day, six days a week at 1-800-544-1914, and also offers access to online tools that help families compare college savings options.

Fidelity’s College Planner, at http://personal.fidelity.com/planning/college, provides tuition and expense information for thousands of private and public colleges and universities and helps investors determine how much they need to save for college education and calculate potential savings growth in a tax-advantaged 529 account.

In addition, Fidelity provides financial advisers with marketing and distribution support and online planning tools such as the 529 State Tax Deduction Calculator and the College Savings Planning tool. For more information, advisers can visit https://advisor.fidelity.com/529 or call 800-544-9999.