Interns are a valuable resource for growing financial advisory firms, said advisers who maintain a formal internship program.
An internship program is a "softer entry" into the process of hiring employees and frees up an adviser's time to work on other projects, according to a paper presented today by Fox Joss & Yankee LLC at the Financial Planning Association's annual conference in San Diego.
Other benefits include a chance to see potential employees in action and creating a stable pool of prospects.
"We haven't hired any of our former interns, but we know where they are at and when we call them, they'll come," said Daniel Joss, principal of Fox Joss Yankee, whose firm hires two interns every summer.
Some firms want to see an immediate return on the investment in an intern, but that's not immediately quantifiable, Mr. Joss said in an interview. The benefits are less tangible, but include supporting growth of the profession.
"We want to be a firm that does this; it's our way to give back to the community," Mr. Joss said.
Time is the most valuable commodity at an advisory firm. Therefore, making the best use of an intern's time can free up an adviser to accomplish items on a practice's "to do" list, such as reviewing a client's
estate planning documents.
One benefit could be just improving the quality of life for an adviser, Mr. Joss said.
But to get these benefits, advisory firms must find and train interns to provide valuable work.
Caleb Brown, partner at New Planner Recruiting, said some firms complain about the time and money they'll have to spend to train an intern, only to have them move on after several months. But the productivity the firms get out of interns is more valuable, especially if a firm's managers have planned out the tasks an intern will perform, he said.
"Think it through and have things lined up for them to do," Mr. Brown said. "It will be a value proposition."
Washington D.C.-based Fox Joss Yankee works with Texas Tech University and Virginia Tech University to find interns. The firm, which has hired interns for five years, has found that these new graduates and existing students will relocate to gain this valuable experience, Mr. Joss said.
During the first two to three weeks, the interns learn how the firm does things, including being trained on CRM software, how to store documents and other such processes. Interns also shadow associates for a couple of weeks and then shadow a partner for a week. After that, interns start preparing work for client meetings, which frees up associates to focus on deeper research projects, said Thomas Saunders, who is in charge of training the Fox Joss Yankee interns.
"After the first month or so, interns start preparing work for client meetings," Mr. Saunders said. "Then, associates don't have to do this and are freed up to focus on deeper research projects."
Interns at financial advisory firms are paid an average of about $13.50 per hour, according to a recent Investment News/Moss Adams survey of financial advisers.
"We pay a lot, and we expect a lot, and they learn a lot," Mr. Joss said.
