High demand from financial planners for tax-effective education investment funds has prompted Lifeplan Funds Management to launch a new scheme.

The Lifeplan Education Investment Fund targets financial planning dealer groups and is designed as a savings and investment product to assist investors fund a child's education.

"The cost of education is fast becoming the next big issue next to housing affordability," Lifeplan general manager strategic development Matt Walsh said.

"Australian families are today experiencing record high costs for educating their children, and those costs will only continue to rise in the future."

The fund provides access to 16 different investment options managed by MLC, AMP Capital Investors, Perpetual, ING Investment Management and BT Financial Group.

"Over the past 12 months, Lifeplan has experienced unprecedented demand from financial planners for a product like this," Walsh said.

The fund allows access to tax advantages from the scholarship plan classification within the Income Tax Assessment Act 1997.

"Not a lot of advisers are aware that as part of the taxation legislation amendments made coming out of the Ralph review of business taxation, that in 2003 scholarship plans offered by friendly societies were given tax concessions.

"Depending on the size of the investment and the duration, the tax benefits can reach tens of thousands of dollars which gives advisers a significant selling point for this lucrative and growing market."