By BETH BRAVERMAN
As family offices have grown and matured over the past decade, so have their staffs.
More than 40% of North American family offices surveyed by RBC Wealth Management in 2021 said they planned to expand their head count in the next year.
“During COVID, a lot of people aged out, and some families are transitioning to the next generation,” said Wendy Craft, chief of staff at Fulcrum Equities. “I have heard from a few people that their staff is overworked and stressed, so they are bringing on more help. And, quite frankly, a lot of people did pretty well during the pandemic, so there are more family offices looking.”
As family offices have evolved — and increasingly deal with fast-changing technological developments and a more complex investing environment — so have the types of positions for which they’re hiring.
Here’s a look at five roles at family offices that largely didn’t exist five years ago:
CHIEF TECHNOLOGY OFFICER
Cybersecurity remains a key concern for wealthy families, both within the family office and among family members communicating with each other. To minimize their risk, family offices are increasingly bringing IT in-house, hiring individuals who can help minimize their exposure to hacks, identity theft and other cybersecurity risks.
Nearly 30% of North American family offices reported a cyberattack in the previous year, according to the RBC Wealth Management survey, and more than half said they’d been the subject of an attempted scam. Family offices are also using increasingly complex tech systems to support the office and family members.
“While the new tech offerings advance the family office, they add other complexity, such as managing the tech infrastructure and integrating the systems,” said Mark Tepsich, an executive director and a family-office design and governance strategist at UBS. “Further, next-gen family-office owners have grown up with instant access to data and communication in their hand via their smartphones, so what worked for their parents is not working for these owners when it comes to access to technology in their family office.”
Large, multigenerational family offices have become more aware of the nonfinancial challenges that they face — namely, maintaining family values and unity. In response, some family offices have looked to hire an engagement director or communications specialist whose role focuses on building connections between family members, educating them about their wealth and the responsibility that comes with it, and planning and coordinating events that bring family members physically together.
Depending on the needs of the family, these employees may or may not have come from financial services but could include teachers, event planners or others with the experience and background the family wants.
“You need someone with communication skills and a soft touch,” Tepsich said. “There are family dynamics that this person needs to appreciate and know how to handle.”
NICHE INVESTMENT ANALYST/SPECIALIST
While many family offices launched their investment teams with generalists who could help them build out a portfolio, as they become more interested in alternative investments and venture capital, they’re looking for specialists with deep expertise in vetting such investments. Depending on the family’s focus, such specialists might have experience in private markets, cryptocurrency or sectors such as technology or health care.
Tim Lappen, founder of The Family Office Group at the law firm Jeffer Mangels Butler & Mitchell LLP, said he has seen more family offices hiring private-equity specialists as they begin to allocate more of their portfolio to such investments.
“Private equity tends to be a little more labor-intensive, and you don’t have the same kind of information available as you do for public companies,” Lappen said. “And you need someone who can not only find the deals but then do due diligence on them and maybe sit on the board and be your eyes and ears.”
INTERNAL INVESTOR RELATIONS
For larger families who have one or more family businesses, answering questions from several generations and branches of family shareholders and managing their
expectations can become a time-consuming job for company executives. To minimize the distraction, some family offices are creating a role modeled after the investor-relations function at public companies.
“They need someone to manage the family and translate what the senior manager of the business is saying for them,” Tepsich said. “They need someone to be a diplomat. They’re not replacing the family leadership, but they enhance and augment it.”
Besides handling inquiries from shareholders, the person in this role might help create quarterly or annual reports that help family members understand the company’s goals, performance and strategy.
Traditionally, family offices have placed the utmost priority on their own privacy. But as they’ve increasingly looked to direct investments or venture capital allocations, some see value in boosting their public profile.
The average family office holds 17 direct venture investments, up from 10 in 2020, according to research by Silicon Valley Bank. As such, they’re hiring external-facing employees who can represent the family office at conferences and other industry events.
“They want to get their name out there because they want to get good deal flow,” said Katherine Hill Ritchie, a board member and director of strategic development at Ohio-based Nottingham Spirk. “If they don’t have external people out there, they’re missing out on investment opportunities for their money.