Products May 13, 2013

OppenheimerFunds Enhances 529 Plan

A wider array of investment options, an adviser-focused micro site and new branding are among the improvements to OppenheimerFunds’ Scholar’s Edge 529 Plan.
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The existing investment options now include Portfolio Allocator, which provides the opportunity to invest across 23 individual fund portfolio options covering the major asset classes, as well as alternative investments. Investors can have their accounts automatically rebalanced every quarter. The firm also unveiled a new microsite, AdvisorsEdge529.com, that gives advisers easier access to enrollment kits and educational resources to aid them in conversations about college savings.

The new Portfolio Allocator option provides an opportunity for clients and their advisers to create a fully customized asset-allocation strategy by choosing from any of the 23 Individual Fund Portfolios now available to the Scholar’s Edge platform, which include options from OppenheimerFunds, MainStay, Thornburg and American Century.

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Clients who participate in the Portfolio Allocator approach benefit from automatic portfolio rebalancing on a quarterly basis to ensure the investments conform to their current elected asset allocations.

Investors and their advisers can still choose between the two original investment options: an age-based approach with six portfolios ranging from aggressive to conservative, with funds automatically shifting into increasingly conservative strategies as the beneficiary grows older;  and a custom option, which allows clients and their advisers to mix and match any of the portfolios with a wider line up of individual fund portfolio options.

According to Steve Dombrower, vice president and director of college savings programs at OppenheimerFunds, choice is paramount in helping investors feel the conviction they need to make these decisions. The wider array of investment options, along with online education tools, gives financial advisers and the investors they serve the opportunity to create accounts specifically tailored to their investment beliefs and goals, Dombrower said.

OppenheimerFunds also unveiled a new Scholar’s Edge brand and refreshed website, which are designed to promote greater access to educational materials and fund information. Financial advisers will also benefit from a distinct microsite to help them get their clients started on the Scholar’s Edge platform and guide them through the investment allocation process.

When investors have exposure to a more diversified and highly rated array of mutual funds, college can be attainable and affordable, with a start early and save often approach, Dombrower said.

The full listing of funds available on the Scholar’s Edge 529 plan is at the plan’s website.

Products May 13, 2013

Using Coffee to Better Understand Investing

The Vanguard Group launched a campaign that uses coffee to help people better understand the role costs play in long-term investing.
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Vanguard’s mobile At-Cost Café will sell hot and cold cups of coffee for $0.26, one-fifth the average price. The café is designed to raise awareness among investors about the impact of costs and help them understand how minimizing costs in their investment portfolios can potentially enable them to save more.

The café starts its seven-week U.S. tour today in San Diego, with scheduled stops in San Francisco, Chicago, Washington D.C., New York and Boston. It will spend three days in each city in prominent, well-traveled locations. The full schedule and locations appear on the At-Cost Café website.

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In addition to the café, Vanguard plans to increase its cost education efforts through its multiple online and social media channels during the next two months. The company plans to elevate new content to its website (vanguard.com), focusing on how saving a little can go a long way, how costs can affect overall portfolio returns, and how investors are increasingly recognizing the power of broadly diversified, low-cost portfolios.

Vanguard also recently published its Principles for Investing Success, which outlines four key fundamental tenets: 1) Create clear and appropriate goals; 2) Develop a suitable asset allocation using broadly diversified funds; 3) Minimize cost; and 4) Maintain perspective and long-term discipline. Cost is significant because every dollar paid in management fees or trading commissions is simply a dollar less that potentially could be earning return, Vanguard said.

“Planning for a financially secure retirement is a huge challenge that many individuals face in this country,” said Paul Heller, managing director and head of Vanguard’s Retail Investor Group. “Low costs are a critical factor in determining retirement readiness, and Vanguard believes that educating investors about cost will give them a better chance of investment success.”

Vanguard research affirms that individual investors, financial advisers, and defined contribution plan sponsors are beginning to understand the key role cost plays in a portfolio. In the report “Costs Matter: Are Fund Investors Voting with Their Feet?,” researchers found that in the last 10 years, investors continue to commit the largest amount in assets to low-cost products, largely due to the popularity of low-cost index funds and ETFs. The researchers also found that the asset-weighted expense ratio for U.S. equity funds dropped by 31% from 2003 to 2013, to 0.64%. For U.S. taxable bond funds, the asset-weighted expense ratio dropped by 28%, to 0.47%.

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