Hiring an Intern for Your RIA Practice
In an increasingly competitive job market, firms that link internship programs into their recruitment strategy are well-positioned to compete for the best talent graduating from universities and colleges.
The main barrier or excuse I hear from advisors on hiring an intern is, “I don’t have time to train an inexperienced person.” I encourage advisors to think of an internship program as a long-term relationship, with the ultimate goal of hiring the intern for a full-time position upon graduation.
Having a long-term mindset will make the time and effort to recruit and train well worth it. This is a perfect win-win situation: The intern gets to try out the firm, and the firm gets to try out the intern without making a full-time hiring commitment.
COST OF A BAD HIRE
All of us have made a bad hire in our careers, and we all know the high price paid when that happens.
Your firm loses more than time, money and effort by recruiting, hiring and training people who perhaps shouldn’t have been brought on in the first place.
You must also deal with the havoc the wrong employee can create, the costs you incur when you have to repeat procedures that were handled incorrectly and the pressure it places on other employees who must pick up the slack.
The average cost of a bad hiring decision can equal 30% of the individual’s first-year potential earnings, according to the Department of Labor.
A successful internship program can become a very cost-effective way to recruit full-time talent.
Where can qualified intern candidates be found? For many firms, internship postings on college campuses and the company’s own website are the best resources. New job entrants are very social-media savvy, so you must ensure information about intern opportunities is on your website.
I highly recommend recruiting from one of the programs registered with the CFP Board of Standards, as these programs specifically train students for careers in the advisory industry and have recruiting programs to help connect firms with students. Among the most active and well-known of these programs are at Texas Tech, Virginia Tech, Kansas State, Utah State, San Diego State, the University of Missouri and the University of Georgia.
I don’t have time to train an inexperienced person.
To maximize exposure to top students, establish a relationship with the faculty, attend career fairs, get involved with student clubs and organizations and, if time allows, become a guest lecturer.
If you do not have the resources to contact schools directly, recruiting sites that are specifically focused on internship opportunities for students — such as InternMatch.com,
InternQueen.com, Internships.com and Experience.com — can be valuable resources for finding college talent.
A DISCIPLINED INTERVIEW PROCESS
Ensure you use a thorough selection process when hiring interns. Start by creating a description of the role and a job posting that will appear on websites and be sent to candidates. Think of the posting as your marketing and communication tool for attracting candidates through a variety of channels.
The posting should contain the following components: firm description, reporting relationship and key job responsibilities.
After scouring resumes, start with a phone interview to screen for the basic skills needed for the role and to ensure there is an initial match on skills and job responsibilities. Invest in the interview process by preparing questions ahead of time, and concentrate on getting beyond the resume.
It is very easy for someone to memorize their resume and recite that back in an interview. So if you only use the resume to ask questions of the candidate, you aren’t truly getting the real picture of the person. Getting beyond what is on the resume is where you will begin to see if there is a real match with the job and, most important, the culture of your firm.
One of the methods I recommend using is behavioral-based interview questions. The theory behind behavioral interviewing is that the most accurate predictor of future performance is past performance in a similar situation. This works especially well with college students, who can be a bit challenging to screen because of a lack of work experience. I recommend behavioral interview questions like these:
1. Describe a challenge you faced, and how you solved it. This question attempts to analyze the candidate’s problem-solving skills and ability to think outside the box. The response may help you determine if he or she is comfortable asking for help in reaching solutions.
The question can also help determine how resourceful the candidate may be when presented with obstacles.
2. Tell me about a time when you took the lead on a project. This question helps determine whether the candidate has key leadership abilities and if they can be a team player, both of which are essential skills in the workplace.
3. Tell me about a time you disagreed with a colleague on a project. This question will help determine the candidate’s ability to express opinions and if he or she can work collaboratively as part of a team.
4. Give me an example of a mistake you have made. This question will challenge the candidate to highlight lessons learned from their shortcomings.
To attract top students, make sure there is a worthwhile role for them. Although an important advantage to employing interns is to free up capacity so regular employees can focus on other important roles and responsibilities, your primary objective is to give interns insight into working for an independent advisory firm.
Be prepared for lots of questions by creating a training guide for your future intern that clearly outlines their duties.
Common intern duties include data gathering, investment research, preparation for client meetings, client reporting, building investment models and participating in client meetings. Be careful to ensure that the intern’s role in the meeting is communicated clearly both to the intern and the client.
SHOULD I PAY MY INTERN?
The answer to this question is obvious. Paying someone what he or she is worth is the right thing to do, and it will attract more-qualified talent. Also, not paying your interns could be illegal under the Fair Labor Standards Act. Generally, undergraduate interns are paid $13 to $15 an hour.
Creating capacity for advisors is one of the biggest challenges facing firms. By hiring interns, you will be creating value for your firm while helping to train the next generation of leaders in the advisory space.