Hello 'stachers. I have been reading MMM blog for some time now but am fairly new to the forum, and I have to say, it is so wonderful to have this supportive community and to be able to tap into a wealth of collective expertise. Wow, I love the internets!
We are NY State residents. We get tax deductions for 529 contributions, up to 10K, so it's a great vehicle for college savings. Last December, we consulted with our financial planner about opening 529 and he naturally helped us enroll in the JP Morgan Advisor-Guided Plan. I was aware of the Direct-sold plan that is managed by Vanguard, but didn't know enough at the time and trusted our FP to help us make the right choice. I was shocked to receive our first statement and see the 5.25% sales fees. We were not told about this before we opened the accounts.
I am now taking a self-directed investing immersion course and have discovered that the direct-sold plan outperforms the AG plan, and has significantly lower expense ratios (.16% vs. 1.16%). It also does not have an annual maintenance fee if your balance is over $3K, while the AG plan charges a $25 annual fee regardless of account balance.
My question is, at this point, does it make sense to switch? Balances are $5K in each and contributions will not be more than $5-10K per year for the next 14 -16 years, unless we receive inheritance or some other type of windfall.
Also, should I be concerned about trust issues with our FP? When I first reach out to him about 529 accounts, I sent him the link to the lower-cost direct sold account, asking if I should go ahead and sign up for it, and his response was, "No, just send me the funds and I will take care of it for you." It makes me feel a little angry. Especially given the fact that he is not actively managing the 529 as it's in an age-based portfolio.
Thank you all in advance for your wisdom and expertise!! It's much appreciated. So many more questions to follow...