SIE (Securities Industry Essentials) Practice Exam

A registered representative should explain to a customer that contributions to a 529 savings plan may be tax-deductible at the state level, depending on the state's regulations. The other options, such as the guaranteed return, security, and fixed interest rate, do not apply to 529 savings plans. A 529 savings plan is an investment plan where the earnings grow tax-free as long as the funds are used for qualified education expenses. Therefore, the focus should be on the tax benefits and not on other investment features. Explaining the potential tax benefits of a 529 savings plan will help the customer make an informed decision about their investment.