Investment-focused single family offices are more likely than family offices overall to have family members in executive roles, according to Compensation Practices of Investment-Focused Family Offices, from Morgan Stanley Private Wealth Management and Botoff Consulting.
The report found 53% of investment-focused firms have a family member as CEO or president, compared with 27% overall. The same holds true for the CIO role: 13% of investment-focused family offices have a family member in that role, compared with 6% overall. For chief operating officers, 13% of investment-focused family offices said a family member held this position, compared with just 4% overall.
“Sometimes investment-focused firms are formed with the principal who generated the wealth from financial services or the investment management industry, in which case that person may retain the CEO and president titles,” said Valerie Wong Fountain, head of Family Office Resources Platform and Partner Management at Morgan Stanley.
Another possible explanation for the difference: “Members of the next generation have been educated on Wall Street or gone into a prestigious investment banking program, gotten an MBA, and have an interest in investments,” Fountain said. “The family may be bringing in the next gen to be the steward of wealth for the family.”