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Harvard Alum Wants To Disrupt 529 Plans If you speak with Marcos Cordero, the cofounder & CEO of Miami-based Gradvisor, he’ll share with you two troubling statistics about college savings. First, 80% of parents don’t know what a 529 plan is, and second, 60% of those saving for college don’t use a 529 plan. That didn’t sit well with the former engineer and MIT and Harvard Business School alum.


Zack Friedman: Why did you start Gradvisor? What problem were you trying to solve? Marcos Cordero: I realized that there is a widespread lack of awareness among parents about the best ways to save for future college costs. Just as you wouldn’t save for retirement with a savings account, parents need to use the right tax vehicle when saving for their kids’ college education. Parents need to treat saving for college like saving for retirement – contributing every month over time to take advantage of compounding interest and making portfolio adjustments along the way.


Zack Friedman: How does Gradvisor work?

Marcos Cordero: Gradvisor is a digital platform that helps companies incorporate 529 plans into their benefits packages. . We function as a robo–advisor, using algorithms and data to recommend the best 529 plan to each employee based on his or her financial situation, geographic location, goals and comfort with risk. In addition to being able to automatically make payroll deposits to their 529 plans, employees also receive access to one of our financial advisors who can provide guidance on saving for college. Additionally, some of the companies we work with offer to match contributions, similar to a 401(k).


Zack Friedman: There are multiple 529 providers in the market. How is Gradvisor different?

Marcos Cordero: Most companies that currently offer 529 benefits choose one 529 plan that would work best for the highest number of employees (most often in the state where most of its employees live). Gradvisor is different in that we offer any 529 plan for any employee and use completely unbiased algorithms to recommend the best fit. If you are in a state that does not offer a tax deduction/credit on 529 plan contributions, you should absolutely be shopping around for the best plan, so employers who offer their state’s plan in this situation could be doing their employees a disservice.


Zack Friedman: How critical is an employer match program for a 529 plan? Marcos Cordero: Once an employer agrees to offer 529s to their employees, the single best way they can help them is by offering a match on contributions. Even something as little as matching the first $25 an employee puts into an account can be just the encouragement one needs to get started. If an employer isn’t in the position to do that, it is important that they still commit to educating their employees.


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Harvard alum wants to disrupt 529 plans  

We function as a robo–advisor, using algorithms and data to recommend the best 529 plan to each employee based on his or her financial situa...

Harvard alum wants to disrupt 529 plans  

We function as a robo–advisor, using algorithms and data to recommend the best 529 plan to each employee based on his or her financial situa...

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