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“Family Office” recruiting is one of the most difficult subsets of wealth management.
Loaded with mystery and allure, many wealthy families want to “have” a family office. It’s a different story when the family has to determine the ROI of the project, lay out the costs and, ultimately, staff one. This is actual work.
Family offices are expensive and require deep strategic thought and long term purpose and budgeting by the family.
As we will learn here, family offices call for the identification, acquisition, and support of talent that is not readily available. This new talent can also be risky.
A new structure with new people subjects large amounts of personal wealth to the domain of outsiders and public risk. Failure is often embarrassing (and expensive).
I went to a source with a unique viewpoint.
BRIAN C. ADAMS is a Principal at Mack International, a leading executive
search, and human capital consulting firm that serves the family
office/wealth management markets.
Along with his background in family office, Brian has co-founded two real estate private equity firms, Excelsior Capital and Priam Properties, and has assembled a portfolio of over $600 million in real estate assets.
Brian’s Background and Unique Path into Family Office Recruiting
The Nuts and Bolts
SUCCESSION PLANNING AND NEXT GENERATION DEVELOPMENT
TALENT IDENTIFICATION AND ACQUISITION/ STRATEGIES FOR RETAINING KEY TALENT
COMPETITIVE COMPENSATION
PACKAGES AND HOLISTIC COMPENSATION APPROACHES
GLOBAL TRENDS THAT IMPACT THE FUTURE OF FAMILY ENTERPRISES
- How “fully formed” is the vision for the office by the time they begin actually recruiting?
- Is this coming from the lawyer?
- The tax professional?
- The banker?
- Or from family office consultants?
What is the ROI on a family office?
- Should it be a profit center?
- A “break-even” cost of doing business?
- A loss-leading accomodation?
Is the family driving the search or a consultant?
- Do they often hire a CEO and they run the lower level searches?
- How do you get a family to think about a family office’s linkage with (or separation from) a family business?
- Should it be funded out of liquidity or operating cash?
Complications with Family Office Recruiting
- What happens if the job mandate doesn’t feel right? How much are you dealing with the family and how much is it the consultant? Are the structures already built?
- Eddie Marshall’s 3 x 3 rule “problem” for Family Offices: 3 years / Over 3M and you still don’t know what you have? LEARN MORE HERE
- What are the real costs?
- Do families understand the expense?
- Who is developing the budget?
Threading a needle-
- Identifying the talent and skills
- Cultural Fit
- Compensation terms – Salary vs Upside
- The accounting spine VS “the guy to analyze deals” VS a large, full service situation
- What happens if the fit is bad after 6 months?
Searches for new (de novo) family offices
Turnover due to retirement vs, turnover due to cultural problems
Searches for executives vs. technicians
- Do searches for positions ever include family members to engender competition
- Private or Public Company Board experience – is a lack of it a red flag?
- Technology building and security experience
- Any major best practices (or worst) for families exploring which functions to internalize and which to outsource?
Family offices and the trends toward outsourcing and MFO’s
- How does one deal with “scope creep”?
- What if the family gets sick of the expense?
- Do you look for other families to use services and share in the expense?