Building RIA internship programs that become top talent pipelines

In an industry that is widely dispersed in geography and size while also posing high barriers to entry for aspiring financial advisors, RIAs could use internships as a strategic lever.

A successful internship program creates a strong talent pool and professional network for registered investment advisory firms and a path toward rewarding careers for young people and career changers, according to three experts. But smaller RIAs and advisory practices often lack the time and other resources to invest in internships, adding to the difficulty for many early-career advisors struggling to find their footing in wealth management. 

At the same time, the record enrollment this past summer for Amplified Planning's Externship program and a stronger acknowledgement across the industry that retiring advisors must plan for the succession of their businesses suggest that more RIAs see the need for internships.

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A shift in the field

Advisory practice owners and other industry executives are going through "a bit of a mindset shift around internships," according to Julie Genjac, an advisor coach who is the vice president of applied insights for asset management firm Hartford Funds. And young people who may have previously viewed wealth management as "all about investments" are getting more familiar with the many other aspects of advisors' jobs and supporting roles in the field that represent valuable, viable career tracks as well, she said. 

So assigning interns to get coffee, perform basic clerical work or — worst of all — awaiting any random task could leave RIAs behind their peers.

"The shift is coming in that it really is being viewed more so as a talent acquisition and development strategy as opposed to this temporary program," Genjac said. "I don't think a lot of students understand the breadth of opportunities in this industry. … I think the internship really helps students understand the industry at a broader level."

The best practices that Genjac advises RIA and other advisory practice owners to consider for internship programs include:

• Viewing the internship as a means to evaluate a full-time employee candidate's work ethic, coachability and "level of professionalism," which can be "very difficult to assess from a resume or conversation."
  
• Assigning an "owner" of the internship program at the firm to take the lead on ensuring they learn about as many aspects of the business as possible, providing feedback and being accountable to the firm's goals for it.
  
• Challenging the intern to end their tenure with the firm in a presentation on a subject of either the firm's choosing or their own, in order to provide "a magical moment for that team to understand that intern at a different level."
  
• Creating space for internships year-round rather than just the summer, in order to tap into career changers who could add further to a firm's talent pipeline for the future.

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Other tips for intern program success

The Externship, which trains prospective planning professionals through eight weeks of virtual courses each summer, drew more than 2,800 students this year, according to Hannah Moore, who launched the program in 2020 and founded Amplified, as well as her Richardson, Texas-based RIA firm Guiding Wealth. Besides the growing numbers of students enrolling themselves, Moore is working with more external RIAs that are using the Externship as part of their own internships. 

With internships, RIAs can get "the data points they need to know if this person is a good fit for their firm," and the interns can answer the questions of whether the industry could be a viable career and which particular role may offer that to them, she noted. But some advisory practice owners may be overlooking other possible benefits of internships, too.

"For firms to be successful, this can't be a drag on their staff," Moore said. "I also think this is really good management training for folks. I don't think we talk about that enough."

Bigger firms and RIAs located near colleges and universities that have undergraduate planning programs are more likely to have internships in some form, according to Scott Leak, the director of business development with industry consulting and M&A advisory firm FP Transitions. To foster a strong introduction to the field, firms must show interns what "advisors are actually doing day-to-day in the role" and give them the ability "to see the opportunity to have purpose in what they're doing," Leak said. 

Since a lot of young people "really want to be in this field because they want to help people," they won't grasp those aspects of the profession if they're just doing menial chores around the office the whole time, he noted.

"The intern needs to get real exposure to advisory work, they need to have an actual mentor assigned to them that is preferably not the owner, and they need to have a visible career path," Leak said. "I don't think people should be building internships around the admin work that nobody else wants to do."