When Mark Sikorski, a vice-president of the brokerage firm D.A. Davidson & Co., discovered his college-age daughter Michelle wanted to follow in his footsteps as a financial advisor, he approached the University of Colorado at Colorado Springs about a program his firm has been sponsoring in other universities for 19 years.
Would his daughter’s school be interested in a $50,000 contribution for a student real-money investment program? UCCS representatives couldn’t say “yes” fast enough, said Ben Martz, the co-director of the university’s Center for Entrepreneurship and an associate professor with the information systems department. Martz said he and others at the university had for years pursued other avenues to bring a real-money investment experience to the students.
The D.A. Davidson & Co. Student Investment Program allows junior and senior-level students to invest actual money – not the usual paper-only investment — in the market and manage a portfolio. Nineteen colleges and universities in the northwest and the Rocky Mountain regions were awarded $50,000 each in August.
UCCS is the only recipient in Colorado, and Sikorski said the university representatives were hell-bent on getting the program instituted this year. “They came up with 10 pages on the course curriculum and how the program would be implemented in one week,” Sikorski said. “We had six weeks to put it all together and they did it in one – my company was impressed.”
Martz said the finance department and the administration at the school of business were favorable to the idea and provided plenty of support. “The real advantage is that we are a small, tight-knit faculty, and we can move quickly on these types of things,” he said. “Plus, we acted on this during the summer months.”
The class, practicum and research in the securities market (PRISM), brought in 24 students this fall. The three-credit course is open to all juniors or seniors or graduate students who have taken a basic finance class. The students must commit to both the fall and spring semester.
The students invest in teams, and each team is responsible to the whole. There is a lot of peer pressure to do well, Martz said. “I think the interest in the classroom has improved,” Martz said. “There is a reality when there is money involved, and if they do a good job, the college benefits; if they do a poor job, it’s a real eye opener.”
The university benefits because half the return on investment, beyond the first 5 percent, goes to the university. Martz said half the UCCS investment return will be used for the program fund and half will be used for college scholarships.
“We hope UCCS is sitting there in 10 years with a $100,000 endowment, based on the investment program,” Sikorski said. “One university in Utah made $140,000 in 10 years, and they are putting it all back into their program.”
Sikorski teaches the course, and he said students also pay the execution costs, which are charged to the portfolio. “They learn the business the right way,” he said. “Real money puts a reality to it all.”
The unique hands-on investment program began when Ian Davidson, company chairman, decided to contribute something to the small communities in the Rocky Mountain region, where the eight D.A. Davidson & Co. offices are located. The company, founded in 1935, is based in Great Falls, Mont.
Sikorski said Davidson launched a fully-paid internship program this year as well. Students who have been a part of the investment program can apply for the internship program. There are 12 intern slots open to senior-year students who spend their summer in the Montana headquarters learning the ins and outs of the investment firm and training for the Series 7 exam, which is a requirement for licensure as a financial advisor. The students take the exam that summer at the expense of D.A. Davidson.
Those students are way ahead of the game when they graduate, Sikorski said. The program also is open to children of company employees, even if those children do not attend universities where the student investment program is offered. “Davidson believes in nepotism,” he said. “He thinks if he has good employees, they probably have good families and good children – Davidson says family teams that work in the business are a good thing.
“It’s also about molding new and good investment counselors.”
Nearby universities and students benefiting from the real-money investment program are Utah State University and the University of Utah, the University of Wyoming and Boise State University. The other schools are in Montana, Oregon and Washington.
Sikorski’s daughter is a sophomore and not yet eligible for the program, but her father said she sits in as an observer and occasional critic on a few of his classes. Sikorski said he thinks students like Michelle will have a jump start post-graduation in two markets: the job market and the stock market.