Family offices often struggle with recruiting talent. They’re looking for a specialized set of skills and someone who will be with them for the long haul. But as the family office space grows and competition heats up, many offices are becoming more like traditional firms in their organization and benefit structure, recruiters said.
When family offices recruit for senior roles, they want executives who already have experience at a family office or a top law firm or hedge fund and are familiar with areas like succession planning and governance, as well as the tax and investment needs of an ultra-high-net-worth lifestyle. That’s a small talent pool, particularly for those firms that want a diverse staff.
At the same time, family offices want to be discreet about their searches, requiring several preliminary interviews and sometimes nondisclosure agreements, which slows the hiring process.
“Family offices will seldom hire someone who is not already connected to their inner circle somehow or is maybe one degree of separation from it,” said Vanessa de Samame, co-founder of the placement firm Hedley May. The same is true when it comes to hiring a search firm, said de Samame, whose firm places senior leaders in industries including financial services.
That’s starting to change, said Trish Botoff, founder and managing principal of Botoff Consulting. “It’s becoming more of a business,” said Botoff, whose firm works with family offices on compensation and benefits. “In the old days, everybody was very private, very isolated. Now it really has come of age as a highly profitable business.”
THE SFO AND MFO DIFFERENCE
Similarities exist in how single- and multi-family offices recruit. A big difference is that MFOs need someone who is able to bring in revenue, recruiters said. As a result, compensation may be more incentive-based than at an SFO.
SFOs and MFOs are now “going after the same pool of candidates,” said Tim Spidel, managing partner at Spidel Burnfin, which specializes in retained executive search for family offices. “Some of the large, generational SFOs that once had a mom-and-pop feel to them now have much more structure around their org chart and services provided to family clients.”
“One of the biggest selling points to working with an SFO over an MFO or private bank is the essence of a service culture,” Spidel said. “Client service is paramount in an SFO,” whereas an MFO may be looking for leaders who can drive business and revenue growth, he said.
At a family office, an executive’s job is to serve the family’s interests, not climb the corporate ladder and achieve recognition. That can be attractive to some in the corporate world who like the idea of staying in a job for decades — layoffs are rare in family offices, recruiters noted — and helping a family accomplish notable goals.
“Some say they’re at a point in their career where they want to make a difference in the world,” said Linda Mack, founder and president of Mack International LLC, which recruits C-suite executives for family offices as well as investment and enterprise firms.
For investment professionals, the longer timeline for investments in a family office is attractive, said Mark Somers, founder of the talent management firm Somers Partnership. “That doesn’t mean it’s slow-paced,” he said. “To be a really good family office professional, you need to understand you only have one client, and whatever that client says is what goes. You have to understand whose money it actually is.”
Family offices are still looking for “expert generalists” who can be strategic and proactive about the family’s interests, said Mack.
“Families are resetting models,” said Neil Kreuzberger, president and founder of the family office search specialist firm Kreuzberger Associates. “They’re putting in best practices, they’re adopting new technology, they’re changing out teams. They’re doing all the things normal, commercial businesses that are evolving and growing and developing do.”
Family offices are also getting more competitive with compensation as they seek to recruit top talent from private equity, recruiters said. And since they’re small, they can get “creative” with other benefits, tailoring incentives like bringing in lunch or offering yoga classes, Botoff said.
IF THE SHOE FITS ...
Family offices are family businesses at heart, and they’re not for everyone. “Culture fit is paramount for success,” Mack said. “Finding someone who has the requisite skills and qualifications is just the first step for us.”
The importance of culture fit is just one of the differences between filling a leadership role at a family office and a similar one in the corporate world, recruiters said. “We’re big behavioral interviewers,” said Mack.
“Every family’s unique in terms of their culture. There’s no standard ‘This is what a family CIO is, or CEO.’ Each one is going to be really unique to the family they’re serving.”
Good candidates are “needles in haystacks,” Mack said. “It takes a lot of time and a lot of conversations. It’s important for both the candidate and the family, because both are embarking on a long-term relationship.”
When hiring for leadership roles, family offices look for people with family office experience, said Buzz Bray, whose firm, Bray Executive Search, has been recruiting for family offices for about 15 years. Estate planning attorneys, tax and trust attorneys, and partners at accounting firms also tend to be promising candidates for top positions, as they have skills that can match family offices’ needs, Bray said.
“We work with a lot of clients on succession planning, and that includes governance and talking with the next generation,” he said.
For an accountant who may work an 80- to 100-hour week during tax season, a family office role can be appealing, Bray said. It's also a major draw for attorneys in law firms who can’t or don’t want to put in the billable hours that would put them on a strong promotion path, he said.
“Work-life balance is a big deal for people,” Bray said.
A family office role also allows a lawyer or accountant to spend more time with clients and develop “more of a comprehensive relationship” with them, he said.
Family offices “are also adding members to their client service teams that mirror the generation in which they are serving,” he said. “That younger generation within a large multi-generational family office may not relate as well to the family client adviser who works with Mom and Dad or Grandpa and Grandma.”
Family offices are also making an effort to bring more women and people of color onto their teams, and many have made progress.
“Being deliberate about attracting and hiring diverse candidates by family offices is not where it needs to be," Spidel said, "but momentum is moving in the right direction.”