Steer Clear of Australian Scholarships Group (ASG)

 

The facts behind ASG

Another financial institution whose marketing zeroes-in on the feel-good factor of providing for your kids’ education is the market leading Australian Scholarships Group.

You may have seen their royal-blue billboards scattered around the city featuring cute kids. This group should be avoided at all costs because of the high fees and the penalties that apply should your child decide not to pursue further education.

The best way to save for your kids’ education (other than drawing on a doting baby boomer’s bank account) is to do some homework yourself.

A solid education investment plan

A great way to do this is via an old-style investment bond, which can be made in a child’s name, and provides an incentive to regularly invest small amounts into Australian and international shares.

The kicker is that if the proceeds are used for educational purposes they attract significant tax concessions, and are capital gains-free if they are held for longer than 10 years.

There are a number of companies that offer this service. The market leader is Australian Scholarships Group but, sadly, it should be avoided because of the high rates and penalties that apply should your child decide not to go on to further education.

In the past ASIC has whacked ASG when some of the group’s representatives “made false and misleading statements and engaged in misleading or deceptive conduct”.

Barefoot has long harboured a desire to start up a not-for-profit education bond, but that’s not likely to happen any time soon. Until it does, check out other investment bond offerings – and use the tax cuts to kick-start the program.

Tread your own path!

Photo: http://www.flickr.com/photos/ebolasmallpox/1414373213/#/

Barefoot Investor
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