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July 10, 2024

How do you hire the right family office head?

Finding a family office head is no easy task, writes Annamaria Koerling. But there are some rules that all HNWs can follow

By Annamaria Koerling

Hiring someone to lead your family office is tricky. The head of your family office is likely to find out more about you than your partner or doctor. They are the guardians of your family’s values and culture, oversee your legacy, and hold a position where absolute trust and discretion are required, in addition to competence and empathy. You also need to be able to see eye to eye with them on the things that matter to you and your family.

[See also: Legacy is a double-edged sword for HNW family businesses, report warns]

It is not surprising that the first instinct of a family principal seeking to fill a role like this is to go with someone they already know. They will often approach a trusted family adviser, perhaps someone who has been their banker or lawyer. This is often a recipe for failure, as they will not necessarily have the required skills and experience. We often hear from despairing principals who call us in to address problems in their family offices which stem from a hiring mistake.

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[See also: The best family office service advisers in 2024]

Persistent staffing challenges are a common bugbear. Why are these roles so challenging to fill, you may ask? One reason is that the job has become increasingly complex and challenging. The CEO of a family office needs to have all the skills that a leader of a larger, regulated financial business needs to have, while retaining the ability and appetite to do whatever needs to be done and the humility to know that they are not really the boss.

Rules of success

How, then, do you maximise your chances of success? I asked some experienced family office CEOs and recruitment consultants, and they were all clear that the answer depends upon the makeup, purpose and location of the family office. However, there are some common considerations that apply to all family offices.

[See also: Family office executives reveal the 10 biggest trends shaping the industry]

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The first is the need to ensure that anyone you hire has genuine integrity. They must be able to project the values and spirit of the family in the best possible way and manage to be surrounded by privilege and wealth while remaining detached from it, ensuring boundaries between family office and family are respected on both sides. As one CEO put it: ‘There is no room for an ego in these roles.’

The most successful family office heads tend to be talented generalists rather than specialists in a particular area of finance, with high EQ as well as IQ. A family office head often plays the role of a diplomat and has to navigate the needs and opinions of multiple parties.

[See also: Are virtual family offices the future of personalised wealth management?]

‘You have to be agile, flexible and adaptable,’ the chief executive officer of one prominent family office told me. ‘One day the family may want to buy a restaurant, and the next they may wish to transport gold bars across jurisdictions without triggering a tax liability. Your job is to solve problems before they become issues and create solutions that are robust as well as practical.’

A family office head also needs to be confident enough to let the family know in the appropriate way if their requirements are not realistic or if there is a better way of doing things. ‘Having someone who just says “yes” does not help you future-proof your family office,’ as one principal told me.

‘You need to be able to roll up your sleeves and get things done,’ said a head of investments at one family office. ‘The risk of hiring high-profile former senior executives of large investment banks is that they are too hands-off.’

[See also: Preparing the next generation is a ‘primary concern’ for family offices]

While you may be in a hurry, taking your time will pay dividends. In order to hire the right person, it is important to map out how you want your family office to function. Where the wealth creator is very involved in the day-to-day running of the family office, it is even more important that the roles and responsibilities be clearly defined.

One family office chief investment officer (CIO) described how the founder, who was a former investment professional, would call her about 10 times a day to discuss the strategy and performance of the assets, giving her his thoughts on the market. Conversely, another CIO only spoke with the founder once a quarter to discuss the portfolio’s performance.

Lastly, finding the right person to lead your single-family office can be a mutually rewarding long-term relationship. However, as with marriage, in addition to dating before making a longterm commitment, it is important to ensure that you plan for failure while putting all the elements in place to maximise the chances of success. Always take advice on employment contracts and ensure that they are up to date and reflect your expectations, as this will make a break-up less painful. It may also be worth waiting for a few months to see how things are going to work out before locking yourself and them into any long-term incentives, which may be painful to untangle. As one family principal put it to me: ‘I find it best to be a realistic optimist.’

Annamaria Koerling is managing partner of Delfin Private Office

This feature first appeared in Spear’s Magazine Issue 92. Click here to subscribe

Spear's Issue 92 cover
Spear’s Issue 92 / Illustration: Diego Abreu

Select and enter your email address The short, sharp email newsletter from Spear’s
  • Business owner/co-owner
  • CEO
  • COO
  • CFO
  • CTO
  • Chairperson
  • Non-Exec Director
  • Other C-Suite
  • Managing Director
  • President/Partner
  • Senior Executive/SVP or Corporate VP or equivalent
  • Director or equivalent
  • Group or Senior Manager
  • Head of Department/Function
  • Manager
  • Non-manager
  • Retired
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
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