In an early sign that the worst days of the recession are behind them, financial advisory firms once again are hiring summer interns, with the hope of grooming young prospects to become full-time professionals.
“There was a falloff last year, but this year, we’re placing kids like crazy,” said Deena Katz, associate professor in the Division of Personal Financial Planning at Texas Tech University and chairman of wealth management firm Evensky & Katz.
She noted that 90 percent of the 60 students seeking internships have been placed with employers so far this year, compared with 70 percent a year ago. By the end of spring, Katz predicted, every student seeking an internship will get one.
Although it is still early in the hiring season, other organizations are seeing similar spikes. At internships.com, the number of financial services internships is up 250 percent compared with last year, according to spokesman Josh Morgan, who would not provide specific numbers.
The Wharton School of the University of Pennsylvania reported an 80 percent increase in off-campus internships being posted so far this year compared with a year ago, according to Michelle Antonio, director of Wharton MBA Career Management.
About half of the 65 to 75 students at Virginia Tech seeking internships have been hired, Ruth Lytton, a professor of financial planning, wrote in an e-mail. She said it is still early in the hiring season, and she expects that nearly all will be placed. Last year, about 42 students found internships.
“We are also seeing a trend for firms offering internship opportunities for the first time, which offers new potential for both the firms and the student interns,” Lytton said.
For advisory firms ramping up to hire interns this spring, the process requires more than simply posting an ad on a college campus bulletin board or Web site. To be successful, advisors must perform the same kind of due diligence they use with other hires to identify good fits.
They must also be ready to train their interns, with specific projects in mind, both to introduce them to the business and see whether they might make a good full-time addition to their firms down the road.
Identifying the right students is the biggest challenge, according to Natalie Pine, COO of Briaud Financial Planning Inc. in Bryan, Texas, which manages $450 million. Her firm halted its internship program a few years ago after several of its interns fled the advisory business for other careers.
“It was frustrating,” Pine said. “We’d train them and give them work experience, and a lot of them left for other industries.”
This year, for the first time, Pine is working closely with professors at Texas A&M University to screen student candidates and find ones who are committed to the financial services industry. She has not hired an intern yet but will start interviewing candidates soon.
Partnering with universities to recruit interns is also key for Jon Yankee, a partner at Fox Joss & Yankee in Reston, Virginia, which manages $275 million. He visited Virginia Polytechnic Institute and State University recently to meet with planning students and speak to two financial planning classes about the industry. He said these recruiting trips help the firm become better known among students and faculty members.
“Part of our goal has been to establish our firm’s reputation so students think of us as the firm to go to,” he said. “When that happens, we’ll have a choice of the best students.”
For advisory firms far from universities or colleges with planning programs, hiring a top-notch intern can be much more of a challenge. For example, Rick Kahler, a certified financial planner and owner of Kahler Financial Group, said his firm’s Rapid City, South Dakota, location is a major disadvantage when recruiting interns.
“It’s hard for me to find any student that wants to come to Rapid City,” Kahler said. “And there’s no college within 400 miles of my location that has a financial planning program.”
This year, however, Kahler got lucky: A student from Iowa State University who’s getting her master’s degree in financial planning will join him this summer because she has family in the area.
Once advisors have selected an intern, it’s critical that he or she be assigned meaningful work and be allowed to get a real feel for the job; relegating interns to administrative work such as filing or making coffee has little long-term value for the firm or the intern.
For example, interns at Burns Advisory Group in Oklahoma City, which manages $400 million, work with the firm’s research team analyzing new clients’ portfolios, crafting projections for those clients and analyzing companies’ 401(k) costs, founder John Burns said. Allowing interns to help with these kinds of tasks also gives firms a better idea of whether they’re good candidates for full-time employment after college.
“You get to see the work ethic, their attitude, what they bring to the table,” Burns said.
In fact, Burns’ firm hired its most recent intern, Jarrod Sandra, who graduated last year from the University of Central Oklahoma, as an investment analyst. Sandra impressed his bosses by overseeing a major project—moving the firm’s portfolio data to its customer relationship management system, said Joy Parduhn, chief compliance officer and COO.
Lee Munson, a certified financial planner with Portfolio LLC, a registered investment advisory firm in Albuquerque, New Mexico, with $100 million in assets, gives his interns assignments such as writing research reports on funds and fund managers that are eventually posted on the firm’s Web site.
While most firms—including Burns Advisory, Fox Joss & Yankee and Briaud—pay their interns competitively, Munson said he believes he can still snag top-notch interns without compensating them.
“If you pay them, I feel it discourages their passion to learn and really suck it up,” he said. “If they’re not on the clock, they can be there because they really want to be there, and you can let them roam free and spend hours expanding their intellectual curiosity.”
Advisors who aren’t paying their interns should be careful they don’t run afoul of state and federal labor laws, which in most cases require that interns be paid.
But Munson said that when an intern impresses him, he tries to hire him or her with competitive pay and benefits. He recently hired former intern Bryon Giron, who graduates next month from the University of New Mexico, to become a trader at the firm.