When is it effective to have a family member working in a key position in the family office? And should the family member be paid? J.P. Morgan Private Bank’s 2024 Global Family Office Report, a survey of 190 global single family offices, sheds some light on how family offices handle these questions.
Globally, family offices are evenly split on whether their family office leader is a family member or a non-family member. When it comes to more technical roles, such as chief financial officer and general counsel, family offices are much more likely to hire non-family members. (And when they do put family members in these positions, they pay them: No family offices in the survey reported having a family member serve as GC without compensation.)
“We have a significant percentage of family members who are deeply involved in the management of the family office,” says Elisa Shevlin Rizzo, head of family office advisory for J.P. Morgan Private Bank, U.S. “The investment decisions in the U.S. are most likely made by the family principal — that’s even true when they have an investment committee or an investment officer, particularly in smaller or newer family offices. International family offices are more likely to employ a structured approach to decision making, including using an investment committee to make investment-related decisions.”
Among the study’s findings regarding how family members are employed by family offices globally:
CEO/president
- 50% non-family member
- 27% compensated family member
- 23% noncompensated family member
CFO
- 86% non-family member
- 8% compensated family member
- 7% noncompensated family member
CIO
- 76% non-family member
- 13% compensated family member
- 11% noncompensated family member
COO
- 75% non-family member
- 19% compensated family member
- 7% noncompensated family member
General counsel
- 90% non-family member
- 10% compensated family member
The survey included more detailed breakdowns by geography and assets under supervision, as well.
