Ask Terry Questions 529 plans…. Bright Start or Bright Directions

529 plans…. Bright Start or Bright Directions

By Terry Savage on February 08, 2015 |

February 3, 2015
Hi Terry,
My Wife and I were considering rolling over our kids (8 & 6), Bright Start College Savings to the Bright Directions Plan.. They each have about $38K in their accounts, we are still upset over the loss that we suffered 5 years ago with the Bright Start debacle, our concern is that Bright Directions has a fee of
2 1/2% to transfer/rollover the account, and other fees.
What’s your opinion, Stay the course with Bright Start or move to Bright Directions for a better managed account??
Parent At a Crossroad
LaGrange Park, IL.

Terry Says:  Well, you’ve touched my “hot button.”  I was so furious at the way the Bright Start program handled the situation where one of their money management firms deviated from its policy of holding the least volatile investments, causing huge losses in the most conservative fund — that I have not advised anyone to put one penny into the Illinois plan since then.  (The same money management company remains a participant in Bright Start — although the specific fund manager “left” the firm!)  That’s just a personal opinion, as the Illinois plans currently hold pretty high ratings at

But moving from Bright Start to Bright Directions is like moving from the frying pan into the fire!  The latter plan is the advisor-sold plan — so you get some encouragement and hand-holding.  But just doing the investing in Bright Start should come up with similar results, if you use their “blended portfolios.”  And at a lower cost!

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