“The most important thing is to figure out what type of family office you’re going into,” says William I. Woodson.
Woodson is an expert who has led the family office group at Credit Suisse and Citi Bank in the United States. He has also lectured at Columbia Business School and advised on family offices at Stanford. After having taught and written extensively on the topic, he stresses that there are two types of family offices: traditional and institutional.
According to Woodson, institutional firms are akin to hedge fund firms. They typically manage the finance and make investment decisions on behalf of the family. Traditional family offices, on the other hand, go beyond investing. While managing the family wealth is part of the equation, staff can also find themselves involved in everything from philanthropy to lifestyle and concierge services.
As the old adage goes,” Once you have seen one family office, you have seen one family office.” Given the private nature of the industry, there is an absence of a standard job description for family office jobs. This insight explores the common roles and compensations and lists a few resources about family office jobs.
Common roles in family offices:
Jobs offered by family offices can vary from investment positions to legal, administrative, and operational roles. The most common executive staff roles found in a typical family office include the following:
Chief Executive Officer (CEO)
The CEO or President is responsible for organising the office, hiring and firing employees, and assigning managerial roles. The CEO should thoroughly understand the family’s needs and exhibit exceptional interpersonal skills. The position requires a long-term commitment, and the average tenure of a single-office CEO is often over twenty years.
Chief Investment Officer (CIO)
The CIO is responsible for creating the investment policy and implementing investment strategies on behalf of the family. The role of a CIO in a family office can differ depending on the family’s investment goals. According to City Private Wealth, family offices can choose between two types: an asset allocator or an active portfolio manager. Asset allocators are more geared towards capital preservation, while active portfolio managers are about maximising returns. Actively managing investments requires unique expertise and does not come cheap. About 40% of US family offices are paying their chief investment officers $1 million or more, according to a report from KPMG and UK-based recruitment firm Agreus Group. That is why some family offices may outsource this position (read more on this here).
Chief Financial Officer (CFO)
The CFO is responsible for the day-to-day financial operations of the family. While tasks may vary, they usually involve preparing monthly financial statements, conducting financial audits, and overseeing budgets and forecasts. They can also be responsible for coordinating the filing of necessary tax reports and performing due diligence for potential investments.
Chief Operations Officer (COO)
The COO is responsible for managing all aspects of the family office operations. Perhaps the most diverse role, they can also directly oversee staff functions, such as legal, technology, and human resources. That means looking after the family’s personal affairs, which involves managing household staff jobs, such as housekeepers, estate managers, butlers, valets, chauffeurs, gardeners, and nannies.
Find Simple’s jobs directory here.
Inhouse vs outsourced staff
Family offices use a combination of in-house staff and outsourced professionals to fulfil their family’s needs. According to a recent survey, more than 65% of participants reported using internal resources for family governance, making it the most commonly supported service. Financial planning (60%) and concierge services (51%) are also frequently handled in-house. Legal services are the only service commonly outsourced, with 55% of family offices reporting this practice.
Compensation and career advancement
Compensation structures in single-family offices can differ significantly based on agreements between the family and employees. In contrast, multi-family offices tend to have more standardised structures resembling those in traditional financial services firms. However, single-family offices have become more sophisticated and are starting to compete for top talent. While executive pay depends on the size of the entity, family office salaries exceed those in the broader US market in 43% of family offices and 58% of firms with $1 billion or more in assets. In the US, it’s noteworthy that 13% of CEOs earn a base salary of $1 million, plus bonuses.
Furthermore, Long-Term Incentive Plans (LTIPs) are gaining popularity as they provide a way to retain and attract talented individuals while aligning their interests with those of the family. While traditional LTIPs were solely performance-based, Family Offices have expanded the range of incentives to include Carried Interest, Stock Options, Co-Investing Opportunities, Forgivable Loans, and Matched Investments.
Looking forward
To pursue a career in the family office industry, it is essential to understand the different types of family offices. Some are traditional and go beyond investing, while others focus solely on financial management. Regardless, each presents unique opportunities and challenges, with common executive roles like CEO, CIO, CFO, and COO.
Compensation structures and career advancement paths are also evolving, with family offices competing for the top talent by offering attractive incentives such as Long-Term Incentive Plans. As the industry continues to expand, it is sure to attract a pool of professionals seeking dynamic and diverse rewarding careers.
Family Office Career Resources
Knowledge is power, especially in an ever-evolving industry like the family office one. Key resources can help you keep up with the latest industry shifts and make running a family office easier. Find Simple’s resource page here.
Agreus Group
Agreus Group is a consultancy that provides a comprehensive range of resources and recruitment services exclusively for Family Offices globally. They specialise in placing professionals in entry-level to executive-level positions within Investment, Legal, Accountancy, Finance, and Operational roles.
Campden Wealth
Campden Wealth is a family-owned, global membership organisation providing education, research and networking opportunities for family offices. It also is a global leader in providing private forums for significant business and financial families and their private offices.
The Family Office Insider
The Family Office Insider (FOI) is a monthly newsletter that shares the latest news and advancements in the global family office community. The publication also covers career developments, research reports and events.
Family Office Podcast
The Family Office Podcast released 3-7 weekly episodes covering family office related, including private equity, real estate, income investments, commercial real estate, hard money lending, private loans, and innovative structures such as performance-fee only and Co-GP investment opportunities.
The Family Office: A Comprehensive Guide for Advisors, Practitioners, and Students
This book provides an insider’s view for anyone looking to understand family offices and how to best serve and advise them. The veteran practitioners William I. Woodson and Edward V. Marshall offer a thorough guide to family offices: why wealthy families create them, what they do, and how to manage them effectively.
Additionally, as part of Simple’s continued efforts to improve the family office industry, we launched a jobs directory for family offices. Whether you’re looking to hire someone or find your dream family office job, this directory will give access to openings in the leading family office and service providers. Find it here.