A Change to Your American Funds CollegeAmerica 529 Plan

Contributed by: Melissa Parkins, CFP® Melissa Parkins

If you have 529 Plan(s) with American Funds CollegeAmerica, a change is coming this year that you should be aware of.

What is happening?

On June 24, 2016 your CollegeAmerica 529 account will be transferred out of the custody of American Funds, and into the custody of Raymond James.

What does this mean?

  • Better communication, efficiency, and service for you! Raymond James will now hold your CollegeAmerica 529 account assets instead of American Funds.
  • Communications about your account will now be more consistent and clear. Statements and tax documents will all come from Raymond James, instead of multiple communications from multiple sources.
  • If your 529 account is currently enrolled in systematic purchase plans at American Funds, they will continue without any disruptions or delay. The information will be transferred to Raymond James to continue any automatic transactions that are currently set up.
  • Your Raymond James account number for your 529 account will not change. The CollegeAmerica Program will continue to govern your account, but Raymond James will now hold the account.
  • The change will not affect the value of your investments, and there will not be any fees for this transfer.

What other information will you be receiving?

  • You will receive a letter from Raymond James at the beginning of April with the details of this change. If you have more than one CollegeAmerica 529. You will receive multiple mailings, one for each account.
    • This letter will state that your financial advisor (us) will now be your single point of contact for managing your American Funds CollegeAmerica 529 account. We have always been your main point of contact for these accounts. So you will continue to call or email us with any requests related to your accounts.
  • You will receive a statement from American Funds after June 24 reflecting a zero balance, because your investments in the 529 account will no longer be held by American Funds. The statement will show a transfer out of the 529 plan.
  • Two year-end statements will be sent for your 529 plan in early 2017: one from American Funds and one from Raymond James. Your year-end statement from American Funds will indicate that the funds transferred out.
  • If you had any reportable transactions before June 24, you will receive a 1099-Q tax document from American Funds. If you had any reportable transactions after June 24, you will receive a 1099-Q tax document from Raymond James. These would also both come in early 2017.

In a nutshell, not much is changing from your end. This change will allow us to more timely and efficiently service your 529 accounts, since we will no longer need to go through American Funds for any processing. This means better service to you! Please call us if you have any questions.

Melissa Parkins, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.