Financial advisors must learn to fully leverage interns

Practice-management literature directs financial advisors to leverage their time more effectively through the use of interns and/or the hiring of younger planners.

To be sure, the savvy advisory firms are taking the time to find and recruit young professionals to help them take on some of the increased tasks of the modern advisory practice, stay current in technology and trends.

It's also a great way to attract younger clients, a key to future success at any advisory firm. In addition, many advisors who hope to eventually retire from the business without abandoning clients are looking for successors to take over their advisory firm.

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However, it seldom provides advice on the process of finding the next generation of financial advisors. The challenge is always where to find good candidates, how to keep a talented young advisor busy with productive work, or why clients might be interested in a firm's hiring processes.

A solid hiring process of young and emerging advisors can add significant value to the quality of work an advisory business—whether a sole practitioner or a large firm with multiple advisorsproduces. In addition, interns or young advisors can increase an advisory practice's capacity to continue business growth, can add a vibrant touch to the firm's culture and can help ensure that it is able to sufficiently service its existing client base.

The rigors of working in a potentially stressful profession—like giving important financial advice to peoplecan truly give a firm a sense of how someone would fit in its organization and culture over the long term. This working environment is certainly a good proving ground for aspiring young planners.

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It is also important for clients to think twice before dismissing a new advisor as too young or inexperienced. Clients should view this emerging talent as a sign of a vibrant and growing business, and more senior advisors in that business are thinking about their future client relationships just as much as they are about current revenues.

Hiring and training a cadre of younger interns and advisors is a true sign that the firm is attempting to evolve into an institution that can serve clients over a longer period of time, rather than a company that is reliant on one or two key people.

To be sure, finding a suitable intern or young planner can be difficult. Advisory firms look for a talented individual who can provide real, tangible help while giving a firm confidence that its clients' and business' privacy and financial information will be respected and protected.

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However, more and more companies are looking at the educational institutions that have Certified Financial Planner Board-approved curricula or are CFP Board-registered programs.

Postings at various colleges, either online or actually on location, can be a rich recruiting resource. Most schools have some sort of job-posting website where an advisory firm can advertise employment opportunities or search student résumés.

You can find examples at the websites of universities such as Texas Tech or Virginia Tech.

Many of these schools also have events such as job fairs or career days that showcase their students to possible employers. Industry-specific websites such as the National Association of Personal Financial Advisors, Financial Planning Association and Charles Schwab Institutional GrowthPoint Human Capital provide links where potential interns can post their résumés for review, as well as places for firms to post employment opportunities at no cost.

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The intern's or young planner's main role is to support more senior advisors with preparations for client meetings. This may include data gathering, putting together performance reports and rebalancing recommendations, and other due diligence related to a client's investments or financial situation.

The goal should be for the new planner to jump into tangible job duties as soon as possible. The most valuable experience the new planner will gain is the ability to interact with clients. It is one thing to prepare materials for a meeting but another to see how those materials are presented in a meeting and to understand how an advisor interacts with his or her clients. These lessons cannot be learned in a textbook or classroom.

New planners should also participate in periodic financial planning and investment committee meetings when possible, and be given opportunities to take a role and have a voice in these processes.

"The most important aspect of hiring interns or young planners is to give these recent students truly valuable and meaningful responsibilities within the advisory firm."

Again, clients should not be concerned about the involvement of young planners in their advisory relationships.

Young planners today are better educated and better trained than ever before and also bring a fresh perspective to any advisory team. Of course, those traits do not make up for a lack of experience that senior advisors have. But the only way for young advisors to get that experience is to be actively involved in the relationship.

In many ways, young advisors' experience is like that of young surgeons at a teaching hospital. At some point, they must actually use the scalpel that they have been trained to use. Young planners have to be involved in real relationships, giving real advice, in order to advance in their careers.

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The most important aspect of hiring interns or young planners is to give these recent students truly valuable and meaningful responsibilities within the advisory firm.

Many candidates now have the technical training to take on tasks that many firms might first have thought were too big. It's up to the senior-level advisors in a firm to trust the younger planners and to also challenge them.

The rewards of an effective hiring process greatly outweigh the associated risks and costs. Hiring the next generation of advisors provides experienced advisors a wonderful opportunity not only to utilize and reward capable talent but also to better serve clients and to give back to this extremely important profession.

—By Jon Yankee, chief financial officer and co-founder of FJY Financial.