Education savings program available to comission-based salespeople

A new commission-sales version of Missouri's tax-advantaged 529 higher education savings program soon will be available through brokers, dealers, financial advisors and banks. The original direct-sold program will still be available directly from the state, according to a news release from the Office of the State Treasurer.

The board overseeing the Missouri Saving for Tuition (MO$T) program approved the introduction of an "advisor series" of MO$T that provides new investment options and a sales commission to brokers and advisors who wish to offer the program to their clients.

"We decided to expand beyond direct distribution through the state because we found many families prefer to invest with the assistance of a financial sales professional," said State Treasurer Nancy Farmer, chair of the MO$T oversight board. "Of course, the direct-sold program will always be available, but having commission sales professionals involved in the distribution will help us reach as many residents as possible."

MO$T, which was launched three years ago, encourages families to save for higher education by offering significant tax benefits. All contributions of up to $8,000 annually for individual taxpayers and $16,000 for two-income households are deductible from Missouri state income taxes, and all earnings used for eligible education expenses are free of all state and federal taxes.

Investors in the program, called the MO$T Advisor Program, will pay a 5 percent up-front commission on contributions up to $59,999. Initial or additional contributions above this amount will be subject to lower commission rates. The entire sales commission goes to the dealer.

Noncommission, fee-based investment advisors also will be able to access the advisor program for their clients. They will be allowed to purchase program shares at "net asset value,' in essence waiving the up-front commission. The program will include eight investment options: growth and income, equity index, large-cap value index, small-cap blend index, international equity, bond, balanced, and a guaranteed option with the same 3 percent minimum annual return as the direct-sold program. The annual investment management fee will be 0.65 percent, which is the same as the direct-sold version. Other than the up-front commission, there will be no other sales fees. The minimum initial investment requirement for the advisor-sold version will be $1,000 for each investment option and $3,000 for each account. Future contributions will need to be at least $25 per investment option.

Financial sales professionals interested in the MO$T Advisor Program can get more information on the Web at www.529advisor programs.com. Interested individuals can visit www.missourimost.oru for more information.