An education investment fund may attract younger clients
Providing clients with an education savings plan could be another solution to the problem financial planners face in bringing younger clients through the doors, according to new LifePlan head Matt Walsh.
Still in their embryonic stage in Australia, education investment funds deliver an extra tax advantage when funds are used for education, Walsh said.
Walsh said the idea has already taken off in the United States, with about $100 billion in similar products to those offered in Australia.
Financial planners play a big role in the affordability of a client’s education and an education savings plan is often a good advice proposition advisers can use to attract younger clients to their business, Walsh said.
“When you’ve got a solution that can provide a tax advantage which is almost equal to a year’s university fees, versus using a unit trust — that suddenly switches on the advice proposition for a family that advisers are attracted to,” he said.
Walsh believes education affordability hasn’t received the attention it should.
“We’ve all been focused on rising energy costs, interest rates and housing affordability,” he said.
LifePlan currently has about 5,000 clients in its education plan and has also white labelled a product for the Commonwealth Bank.
Recommended for you
With the final tally for FY25 now confirmed, how many advisers left during the financial year and how does it compare to the previous year?
HUB24 has appointed Matt Willis from Vanguard as an executive general manager of platform growth to strengthen the platform’s relationships with industry stakeholders.
Investment manager Drummond Capital Partners has announced a raft of adviser-focused updates, including a practice growth division, relaunched manager research capabilities, and a passive model portfolio suite.
When it comes to M&A activity, the share of financial buyers such as private equity firms in Australia fell from 67 per cent to 12 per cent in the last financial year.
