Beyond the Family
New data suggests a move towards non-family professionals in leadership roles at family offices. Here’s what it means for recruitment.
The recent Deloitte Family Office Insight Series observes that family offices are shifting away from leadership by family members and towards recruitment of outside professionals.
This points to a renewed recruitment challenge for family offices.
Below, we analyse the three key trends driving this shift and the potential implications for recruitment decisions at family offices.
Trend 1: Generational Shifts
The generational shifts at family offices are the natural result of their maturing leadership.
Deloitte reports that almost half of family offices expect that their leadership will move to non-family professionals post-succession. This is supported by the fact that nearly a third of offices say that the next generation is unprepared to take on the responsibilities of the family office (30%) or is unqualified to take over (28%).
Deep experience in the sector can be beneficial and the ability to deliver to an extremely high level is a prerequisite for candidates. Just as important is the trust of the family. For this reason, it is not unusual that the Head of the Family Office will be an individual whom the Principal has known for a long time in a professional capacity such as a lawyer, banker, tax advisor, etc. This naturally raises the question of whether the best person in the market is being hired for the role, but trust tends to trump this consideration.
However, for other senior positions in a family office there is more latitude and it is here that the net might be cast wider.
Trend 2: The Drive Towards Professionalisation
The uncertainty of generational shifts has accelerated the growing trend of bringing in external professional talent to family offices. While hires from other family offices are still very evident (22% according to Deloitte) it is observed that the majority of current hires come from financial services (64%) and accountancy firms (44%). One CEO of a family office commented:
‘We like to hire professionals who come from other family offices, but that is difficult to find, it’s a very small community and employees do not tend to move around that much.’
This chimes with our experience that family offices generally perceive hiring individuals from organisations other than family offices as carrying a degree of risk due in part to the idiosyncrasies of working in a family office. Cultural “fit” in a family office is equally important as technical competence when assessing any prospective employee. Most family offices are quite small – getting this wrong can be disastrous for the office dynamic.
At most family offices, roles are much less well-defined compared to larger corporations with staff generally having a much wider remit and a greater breadth of responsibilities. Family office staff are often required to be much more flexible and “roll up their sleeves” than perhaps individuals who come, for example, from large financial services organisations might be accustomed to day-to-day.
Of course, depending on the role, institutional experience can be appropriate but there is no doubt that an individual who has the unique experience of working for a family office is valued. As family offices trend towards seeking greater numbers of outside hires in senior/leadership roles, there will be increased competition for the relatively small pool of candidates who possess this prior experience.
Trend 3: A Renewed Focus on Retention
A quarter of offices (25%) placed talent recruitment/retention as one of their top three risks.
This is unsurprising given the nature of family offices where continuity of staff is critical. The highly confidential nature of the work means that any departure can have significant ramifications. A significant amount of energy is invested in any new employee in a family office, and it takes time to build trust. Getting recruitment right the first time mitigates this risk.
Avoiding complacency when it comes to compensation can pay dividends. Some family offices can be rather isolated when it comes to market trends, and it is helpful to benchmark the compensation of staff members on a regular basis. Whilst there are variations across jurisdictions, there has been a significant upward pressure in remuneration in the family office world over the past few years. Having access to up-to-date market intelligence on compensation for family offices can help retain staff.
For the right individual, working for a family office is a highly attractive proposition and most appreciate (or should) that obvious career advancement can be limited due to the size of the entity. However, that should not stop investing in the professional development of individuals, assessing whether a family office is still fit for purpose and providing a work-life balance – some key considerations in minimising staff turnover
What This Means for Family Office Recruitment in 2025 and Beyond
The Deloitte Survey usefully highlights the growing complexity of the services managed by family offices which, allied to the impact of a maturing leadership base, has created new challenges in recruitment and retention.
Identifying talented individuals with the appropriate skills and personality “fit” is a complex task. Time spent investing in finding the best people and ensuring they stay is vital for long term stability and success. It should not be left to chance or instinct but approached with professional assistance.
This article was written by Paul Avon, a Director at True House Partners, a specialist family office recruiter. Headquartered in London, True House Partners undertakes recruitment for family offices worldwide. For further information please contact +44 (0)20 7846 0025 or contact@truehousepartners.com