(Dow Jones) More financial advisors are being asked by affluent clients to help with a job that used to be for parents alone: finding the right college for their children.
A report on college savings issued in August by Fidelity Investments found that almost twice as many advisors as last year are helping clients research schools (25%, up from 13% a year earlier), navigate the grant process (30% compared with 16%) and secure financial aid (37% up from 20%).
The increased reliance on advisors reflects growing difficulties, even among wealthier people, of covering college costs at a time when investments are stagnant, credit is tight and property values have slumped.
"Families just don't know what to do, and many are going to advisors for help," says Jeff Troutman, vice president of Fidelity Investments Institutional Services Co. He says they're "looking to advisors to help with maximizing assets and minimizing expenses of going to school."
Deborah Fox, a financial advisor in San Diego who trains advisors and accountants and works with families, says her college advising business has climbed 25% to 30% a year since 2008.
"Parents that were fully funded now aren't, because of the stock market declines," says Fox, who typically charges about $1,500 to $3,500 for the college advice.
Too often, families focus on getting a son or daughter into a name-brand school instead of on what they can afford, Fox says. She encourages them to pay more attention to opportunities for scholarships or grants, and to use tax strategies, such as paying a child for services such as web design for a family business.
When a student envisions going on to graduate school, financial advisor Warren Ward in Columbus, Ind., suggests to the family that it consider undergraduate studies at a community college or state school to save money. "I really don't feel I'd be serving my clients adequately if I didn't offer this [service]," he says of the college planning, which is part of the advice he provides, but also is available as a standalone service for $250.
He also counsels them not to overestimate their assets or income on forms used to determine eligibility for aid. "People have a tendency to brag on them," he says. "It's not unusual to overstate the value of a home, personal business or farm."
Fred Amrein, an advisor in Wynnewood, Penn., says he helps families determine where and how to save for college, since financial aid offices weigh different types of assets differently. He charges from about $650 to $950 for some specialized college planning services, including determining the cash flow if a child chooses one school instead of another. "Everyone gets hung up on admissions," he says. "We get our parents to focus on the outcome of the education."