YOUR PRACTICE: An affordable way to find your new apprentice

By Jennifer Hoyt Cummings

Oct 10 (Reuters) - Need to lighten the work load of theassociate advisers in your office, but don't want to add a newstaffer?

Try building an internship program. College-level internsare affordable labor for established wealth management firmsand, potentially, a good source of new associates.

Pittsburgh-based Legend Financial Advisors has an average ofa dozen interns at any given time, and half of its 23-personfull-time staff are alums of the internship program. The programcosts about $225,000 a year to run when fully staffed.

Firm President Lou Stanasolovich said advisers can set upsomething less extensive for a fraction of that, but for hisfirm, the cost is worthwhile - even though interns may not be asefficient as fully-trained employees.

"It takes about four interns to equal the pay of a regularemployee," said Stanasolovich, who pays interns between $8.50and $12.50 an hour, plus performance and other bonuses. Somefirms pay interns as much as $20 an hour, d ep ending on locationand other factors.

The idea of hiring interns in wealth management appears tobe gathering steam, said Deena Katz, an associate professor atTexas Tech who sets students up with wealth managementinternships. The school offers degrees in financial planning.

In recent years big financial services firms like CharlesSchwab have invited Katz's students to mingle with advisers atconferences to find out about potential internshipopportunities. Fox Joss & Yankee, a Reston, Virginia-basedwealth management firm, got so many questions about how itsseven-year-old internship program worked that it recently wrotea white paper on the subject to give to other advisers.

The following are some points to keep in mind when buildingan internship program:


Legend Financial's internship program experienced plenty ofgrowing pains when it began in 1994. At first the firm, whichmanages $350 million in client assets, didn't have enough taskslined up for the interns. Then as the program grew, staffersfound they spent too much time training the students.

The firm eventually created checklists of tasks for internsand training videos that students could watch on their own.Legend now has its more senior interns train newbies.

You are most likely to find an intern who can hit the groundrunning by partnering with one of the about 200 U.S. collegesthat offer financial planning degrees. Leading schools includeTexas Tech, Virginia Tech and the University of Georgia, but theCertified Financial Planner Board of Standard Inc's website hasa full list. The board has seen a 20 percent increase in schoolsoffering financial planning degrees in the last two years.

Even if there's not a program in your area, many studentsare willing to travel for internships.

You can also set up a booth and present internshipopportunities at job fairs at local universities and post theposition on your company website or the sites of The NationalAssociation of Personal Financial Advisors and the FinancialPlanning Association.

A newer alternative is to outsource the task. AdvisorsAhead, a company started this year by a former vice chairman inthe wealth management division of Morgan Stanley, CraigPfeiffer, will vet and train interns for you and will deal withadministrative tasks, like paying them. The cost is about a 20to 25 percent mark-up on the intern's wages.

One intern for every two to three advisers is typically agood ratio for a firm, said Texas Tech's Katz.

When budgeting for interns, don't forget to consider itemsoutside of wages, like payroll taxes and office equipment.


Your goal should be to have interns - eventually - take onas many of the associate advisers' job duties as possible, FoxJoss & Yankee says in its white paper on interns.

The company, which manages $350 million in client assets,has interns help associates prepare for client meetings bygathering data, putting together performance reports and makingrebalancing recommendations.

Let interns sit in on client meetings, but only after youget the okay from your client and you give the intern someetiquette lessons, warns Jon Yankee, director of human resourcesat Fox Joss & Yankee. He recalls cringing when one interngreeted a client - an older doctor - by his first name, and whenanother intern interjected with his own opinions during ameeting.

"Let them know that when they do sit in meetings, they keepquiet," Yankee said.

Keep a list of side projects for the interns to do duringslow times. For instance, you can have interns make sureclients' IRA, 401(k) and life insurance beneficiaries areup-to-date. Yankee said that last summer his interns founddozens of beneficiaries that needed to be updated.

"These are people who are trying to establish a career, sothey're going to work really hard for you," Yankee said.

(Reporting by Jennifer Hoyt Cummings; Editing by JenniferMerritt and Dan Grebler; Twitter @jenhoytcummings)




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