YOUR PRACTICE: An affordable way to find your new apprentice

By Jennifer Hoyt Cummings

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

Try building an internship program. College-level interns are affordable labor for established wealth management firms and, potentially, a good source of new associates.

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

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

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

The idea of hiring interns in wealth management appears to be gathering steam, said Deena Katz, an associate professor at Texas Tech who sets students up with wealth management internships. The school offers degrees in financial planning.

In recent years big financial services firms like Charles Schwab have invited Katz's students to mingle with advisers at conferences to find out about potential internship opportunities. Fox Joss & Yankee, a Reston, Virginia-based wealth management firm, got so many questions about how its seven-year-old internship program worked that it recently wrote a white paper on the subject to give to other advisers.

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


Legend Financial's internship program experienced plenty of growing pains when it began in 1994. At first the firm, which manages $350 million in client assets, didn't have enough tasks lined up for the interns. Then as the program grew, staffers found they spent too much time training the students.

The firm eventually created checklists of tasks for interns and 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 ground running by partnering with one of the about 200 U.S. colleges that offer financial planning degrees. Leading schools include Texas Tech, Virginia Tech and the University of Georgia, but the Certified Financial Planner Board of Standard Inc's website has a full list. The board has seen a 20 percent increase in schools offering financial planning degrees in the last two years.

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

You can also set up a booth and present internship opportunities at job fairs at local universities and post the position on your company website or the sites of The National Association of Personal Financial Advisors and the Financial Planning Association.

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

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

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


Your goal should be to have interns - eventually - take on as many of the associate advisers' job duties as possible, Fox Joss & 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 by gathering data, putting together performance reports and making rebalancing recommendations.

Let interns sit in on client meetings, but only after you get the okay from your client and you give the intern some etiquette lessons, warns Jon Yankee, director of human resources at Fox Joss & Yankee. He recalls cringing when one intern greeted a client - an older doctor - by his first name, and when another intern interjected with his own opinions during a meeting.

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

Keep a list of side projects for the interns to do during slow times. For instance, you can have interns make sure clients' IRA, 401(k) and life insurance beneficiaries are up-to-date. Yankee said that last summer his interns found dozens of beneficiaries that needed to be updated.

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

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



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