College Funding market

[old rookie]

I have read several post and articles on college funding as a niche market. Is anyone reading this post devoting their entire business effort in this niche market? How long have you been doing this? I am not asking for trade secrets, just honest answers and honest feedback with your experience.

 

[AboutThatLife]

Depends on what state you are in. Some states are passing laws limiting the amount of life insurance that can be placed on a child, which kills this method of college funding.

 

[DHK]

The "college funding" market is primarily about asset reallocation into life insurance and annuities to decrease the EFC.

 

[Corpuschristi]

College funding with life insurance is purchasing on the parents or grandparents. The cash value can be used for funding college and is not considered an asset under FAFSA. It works best with those in the mid to lower income levels since the lack of assets will qualify the college bound student to less assets and they qualify for more grants. Higher income folks will probably be better served with a 529 plan. DHK said it all in one sentence, I just explained in more detail.

 

[pfg1]

There is value, but its a tough market all around

 

[old rookie]

Thank you for your replies. Is/has anyone using this market as their primary focus? If so, please share your likes/dislikes, success or failures. My plans are to devote all of 2019 in this market and I am looking for experiences and opinions from folks a lot smarter than me on the subject.

 

[DHK]

I don't... as income is the primary issue affecting EFC, not necessarily asset location/re-allocation to life insurance and annuities. When I promote my services, college aid asset repositioning is a secondary benefit, not a primary reason for doing this kind of planning.

Your advantage in this market is that there is a new crop of prospective parents in their late 30's to early 50's (or later) that can be quality prospects because they haven't done much of any planning.

However, to really do this right, you need an area (zip codes) of slightly higher incomes that value post-high school education. And you need to partner with a college planning firm that will help match the student's aptitudes and scholastic focus to the right kind of school, and find additional scholarship opportunities. You normally charge a fee for a couple thousand dollars for this service... and a portion of that fee is shared back to you.

Just beware of some of these firms wanting to charge you thousands of dollars to let you have a "dedicated territory" to promote yourself. I don't know whom I would partner with, if I were to go down this path.

If I wanted/needed additional education in this particular market, I'd probably consider the CCFC designation - however it does require that you have completed another credential before you could use the CCFC 'marks'.

https://www.aiccfc.org/

 

[pfg1]

I did for a couple years. As I said, its a tough market. You can get folks interested pretty easy, but most that I've found are WAY more interested in the front end side, not the financial side. The want to know how to get their kids in, how the process works, testing, essays, scholarships, financial aid, etc....everything involved. Most, not all....want free info, and then some will take what you suggest and go to their guy.

Many have not planned well or at all, and come looking for help when their kids are a junior or senior. Re-allocating assets only helps one part of the process... a small benefit. You have to be able to work on the planning side as well. Many people want to be hand held all the way through the whole process. Testing, applications, school selections, essays, fafsa, and much more. I personally wasn't willing to do that and babysit folks and not get paid for my time, so I quit focusing on it. I have a good friend that still does, and charges $3000 to bring on a client - financial business or not. The "college planning" companies that push this as a niche....it is. But its not easy to convert from tire kicker to client. Most would rather stick their head in the sand - even after they hear the reality. Good luck

 

[Allen Trent]

I find it very disingenuous as a market to go after. I tend to go hard at discouraging most consumers from getting involved with most that are promoting themselves as college planners. The reason is that most I have seen have almost no interest in actually helping the families with the one thing they actually thought they would be helped with........grants, scholarships and financial aid.

Some of the most agregious situations involved parents taking out HELOC loans & mortgages & then placing those funds into Variable Life policies at the time.

Now, dont get me wrong, I think a person could indeed actually be helpful, but you will likely spend tons of time doing pro bono free work with no sales if you do it above board & ethical with full disclosure up front.

If you announce that you are a life insurance agent that helps people qualify for financial aid by selling them life insurance, I am guessing you wont get many consumers to call.

I guess I just soured on the concept as I have not seen it done professionally & ethically in recent years

 

[pfg1]

I find it very disingenuous as a market to go after. I tend to go hard at discouraging most consumers from getting involved with most that are promoting themselves as college planners. The reason is that most I have seen have almost no interest in actually helping the families with the one thing they actually thought they would be helped with........grants, scholarships and financial aid.

Some of the most agregious situations involved parents taking out HELOC loans & mortgages & then placing those funds into Variable Life policies at the time.

Now, dont get me wrong, I think a person could indeed actually be helpful, but you will likely spend tons of time doing pro bono free work with no sales if you do it above board & ethical with full disclosure up front.

If you announce that you are a life insurance agent that helps people qualify for financial aid by selling them life insurance, I am guessing you wont get many consumers to call.

I guess I just soured on the concept as I have not seen it done professionally & ethically in recent years

Allen I agree completely. Most companies push the college planning (funding) as a tool to get life ins sales. Yes, there is that availability, but its only 1 small part of the college planning and funding process, and honestly if you are being ethical its not a slam dunk. Unless you plan to do everything involved in the college planning/funding process, I wouldn't chase it as the main focus. The more I learned about it, which is quite a bit... the more I realized what the parents wanted and needed the most. I wasn't willing to go all in and handhold everyone through the process the whole way so I chose not to do it. I spent more than a year and half chasing it full time, and the deeper I got and more I learned, the more I realized it wasn't MY niche. Now I just use my knowledge to help my clients that have kids as a part of the planning I do.

My friend that does really well with college planning and funding....probably 90% of it doesn't involve insurance or anything financial that pays commissions. I will say its a great way to get in front of people, but what they end up wanting/needing is NOT what the college funding companies are pushing. I had no issue putting 30-40 people in a room, but they almost all ending up wanting the info that didn't make a commission. I gave it to them and helped them, but after a while I got tired of not making any money.