The service is expected to increase the distribution of 529 plans because it automates much of the processing that formerly was a paper-intensive procedure, which made it difficult for broker dealers and advisors to track client information.
According to the BNY Mellon, the first 529 client is a broker dealer, which can now benefit from rolling up the trades of its 529 plan clients into a single omnibus account for each 529 plan in which its clients participate.
With this service, broker dealers will be able to self-clear trades, including trade placement, trade aggregation, trade settlement and reconciliation, BNY Mellon said.
BNY Mellon Asset Servicing head of US investor services Michael DeNofrio said this first step in expanding subaccounting services beyond traditional mutual funds will open the door to a growing number of investment products, including fund-sponsored individual retirement accounts.
