Despite some cooling of the nationwide job market, family offices looking to hire talent face a competitive market.
“The competition for talent remains one of the biggest challenges facing the industry,” says Tony Tagliapietra, chief investment officer and VP of shareholder services with the Michels Family Office and CEO of RIVER1 Asset Management. “The market for family office talent is still very competitive, particularly for experienced investment professionals, accountants and tax and estate planning professionals.”
There are some nuances, depending on the specifics of the position and the office doing the hiring.
“It probably depends on the type of position,” says Brian Schultz, a CPA and leader of the Plante Moran Wealth Management tax practice. But many family offices want candidates with previous family office experience, he says: “That makes the universe pretty small.”
One area of current demand, says Michael Marquez, president of Bessemer Trust, is wealth and estate planning.
“We’re seeing a lot of demand for help with creating dynastic trust structures in different jurisdictions that support the ever-growing needs and can accompany the evolution of the family from one generation to the next,” Marquez says.
Subhead: Supply and demand
A number of factors are affecting both the demand for family office professionals and the supply of those professionals.
One driver: The number of family offices is increasing.
“Over the last five to seven years, there’s really been an explosion of the number of family offices being created — some due to the wealth accumulation in the U.S, some part of the great wealth transfer from the Baby Boomers and Silent Generation to the Gen Xers and Millennials,” says Eric L. Johnson, U.S. family office tax leader for Deloitte LLP.
And while some family offices may shrink or cease operations altogether, that happens less frequently than creation and expansion.
“There are more family offices forming all the time, and the rate of creation of new family offices is faster than existing family offices are unwinding operations,” Schultz says. “So I think the potential demand is growing just for that reason.”
Generational transitions are also creating greater demand for family office services.
“As family offices move from G1 to G2, the offices have more adult client households to support,” Schultz says. “That requires the existing family office to either staff up or decide not to offer as many services to G2 and G3.”
And although there may be more job seekers available overall, family offices are looking for people who meet very specific requirements.
“We feel the market is very competitive, and finding qualified individuals to staff the private trust company with operation and trust knowledge can be a challenge,” says Susie M. Roh, president and CEO of Wind River Trust Company.
Even for less technical roles, family offices often need skills and experience that people don’t always acquire in other industries.
“Family offices require professionals who are comfortable wearing multiple hats, maintaining absolute confidentiality, and building trusted relationships with family members and external advisors,” Tagliapietra says.
On the supply side, experts say, a lot of the talent in family offices is aging out, and those retirees are not necessarily being replaced with younger professionals.
In addition, professionals with the experience and expertise required to run a large single-family office are generally well qualified for other jobs, some of which may seem less risky than working for just one family, says Justin Bakewell, managing director and head of client strategy for Pitcairn.
“When one family is the client and something goes wrong, that’s very problematic. So just the laws of economics suggest you probably have to pay the same level of talent more,” Bakewell says. “For some families, it may be worth it to have ultimate control and a better sense of confidentiality.”
In addition, Bakewell says, a lot of RIAs and multifamily offices have taken on private equity capital, which is elevating compensation.
“So now you have private equity firms that want to hire the same person as the family office — and you have two significant pools of capital that keep pushing up compensation,” Bakewell says.
Winning strategies
Experts suggest a number of strategies for filling family office roles:
Networking: “We’ve been successful leveraging trusted industry referrals and selectively engaging experienced professionals from our network,” Tagliapietra says.
Scott D. Saslow, principal and founder of One World Investments, a single family office, has found networking successful for a variety of roles.
“Our current team includes entrepreneurs we previously funded and mentored who are now supporting us with diligence, subject matter experts we met through local academic communities, and others we found by leaning on our network,” Saslow says.
Creating flexible jobs: Schultz says some family offices, concerned about the sensitivity of their information, have lagged behind other types of organizations in workplace flexibility, insisting on on-site work every day.
“That doesn’t work for a lot of professionals when they know they have other options,” Schultz says. “I have seen more flexibility recently from offices where previously they would have been more rigid, especially before COVID. They understand that they have to evolve — otherwise they’re just not going to fill the needs for the people they want, and at the right levels of skill.”
Saslow says his office has “embraced a fully remote work environment, with one or two in-person gatherings per year.”
They have also adjusted their roles at times based on the candidates they found.
“For our director role, we found a great candidate looking for a full-time opportunity who had the skills and energy to pull us to the next level, so we pivoted from our original plan of a part-time hire and made it full-time,” Saslow says.
Highlighting the opportunities: Some candidates will be attracted to specific parts of family office work — so emphasizing these opportunities can help with recruiting efforts.
“Many candidates are attracted to family offices because of the opportunity to work across multiple asset classes, while having a direct impact on investment decisions,” Tagliapietra says. “In addition, philanthropy is an important part of many family offices. The opportunity to help families achieve both their investment objectives and their philanthropic goals is a meaningful aspect of the role and often highly appealing to experienced investment professionals.”
Outsourcing: In some cases, a family office may find that it doesn’t make sense to hire a high-quality candidate for a specific role.
“Family offices need to determine what talent they need in house and what they can engage from outside,” Marquez says. “Family offices are also increasingly sophisticated, and they need talent to support this sophistication. All but the very largest family offices will need to engage some external experts to support their overall mission.”
Succession planning: Finally, a solid succession plan can make specific family office experience less critical.
“Family office experience is probably more important if you don’t have someone on hand that has the expertise to train what you need that person to do. If you do good succession planning, it’s much less critical,” Schultz says. “You can’t always plan ahead when there’s going to be a departure. But to the extent that you can, that probably reduces the need to bring in someone with relevant family office experience. That also opens up the universe of candidates that would be a good fit.”