March 29, 2004
One my main concerns about the Illinois 529 plan is the blatant self promotion by the Illinois State Treasurer Judy Baar Topinka and what it costs investors indirectly. My understanding from a Chicago Tribune article a little over a year ago is that Topinkas name must be prominently displayed in any communication that the company Salomon Smith Barney administering the 529 plan has with investors. This is akin to the soft dollars abuse in regular mutual fund accounts. I am fairly confident that part of Salomons higher that average fees are being used for this promotion of the state treasurer. This is abusive, especially since we are forced as investors to choose between this state tax advantaged 529 plan and more reasonable out of state plans with lower fees but which are not tax advantaged.
-Joe Colligan, MD