SIE Understanding Products and Their Risks Question 59: Answer and Explanation

Question: 59

Which of the following is correct regarding "direct-sold" or "advisor-sold" 529 plans?

• A. No states offer "direct-sold" 529 plans by mail or through a website.
• B. No states offer 529 plans through broker-dealers.
• C. Direct-sold investors may pay lower fees, and not have professional advice provided.
• D. States typically offer "advisor-sold" 529 plans, which provides profession investment advice with no fees.

Correct Answer: C

Explanation:

C: Choice C is correct because direct-sold investors may pay lower fees and not have professional advice provided. Choice A is incorrect because some states offer direct-sold 529 plans by mail or through a website only to their own residents. Choice B is incorrect because "advisor-sold" 529 plans are sold through broker-dealers. Choice D is incorrect because "advisor-sold" plans may have higher fees and offer investment advice from a professional advisor.