Family offices offer many benefits to those who are quite affluent. Things like customization, privacy, and having a personalized team to handle various services will often be why people turn to them. According to Forbes, the need for them continues to grow because wealth has increased in areas like Miami, Los Angeles, Hollywood, San Francisco, and New York.
It’s important to focus on family offices because they offer various services, including lifestyle management, risk management, succession planning, estate planning, investment monitoring, concierge services, and philanthropy coordination.
However, there are also traditional financial services, such as tax planning, accounting, private banking, private wealth management, insurance, and operational support for the back office.
The workforce for a family office is crucial to its success. Therefore, you require an executive search firm to help you find and hire fresh talent with ease. Let’s take a look at some of the top trends for family offices.
The world often has setbacks at times, so affluent families have to control their own destinies. They weren’t satisfied with banks and doubted service providers, which led to family offices as you now know them. Most brands saw an opportunity within the downfall and created huge growth that private equity firms can’t provide in terms of wealth management.
Now, wealthy families are seeing the same patterns because of the pandemic. They’re experiencing tremendous growth, and family offices are essential to that.
In 2021, the family office landscape saw a huge change. There was a surge in private investments across newer asset classes and private equity allocations. Likewise, a push for IPOs and more intergenerational wealth transfers were part of the situation.
More Help Needed
Those factors and post-pandemic growth to the economy led to people generating more wealth. Therefore, family offices were created and grown. As a community, there had to be more professionals to assist. Investment analysts were there to oversee the new asset classes, trust professionals navigated talk of more regulations, and accounting professionals managed all of those transactions.
Forbes has listed the five crucial factors for the future in family offices and executive leadership. These include resilience, digital excellence, communication/transparency, community/networking, and transformative impact. The demand for more family office professionals coincided with a candidate-short market. Therefore, there will be more attraction to this type of work.
Leaders will do what they can to find the right talent in family offices, which means:
- Pledging resources to achieve a social impact
- Offering long-term incentives, including co-investments
- Offering better starting salaries with market benchmarks
Family offices continue ramping up hiring efforts to attract the best candidates possible, but they also have to focus on retention. This means keeping the exceptional teams they already have in-house.
The pandemic provided a platform for family office growth, but it was also a wake-up call for all professionals. Work-life balance was crucial, so flexibility, workplace culture, and commuting times were pivotal elements to the prospective role.
Remote working took over, so professionals had to think about where they worked, the living space they had, and the working environment. This pushed many multi-family offices away from the financial services firms they once used.
The Great Resignation
Overall, it led to what most people call the great resignation. Roughly 4.5 million professionals resigned in America by November 2021. That’s the highest on record in over 20 years, but there’s a similar pattern in the family office world as wrong hires don’t return.
There are now more opportunities available than professionals and candidates are willing to take because they want to create a better work-life balance. Therefore, family offices must focus on retaining their top talent and turn to family office recruitment to find new people.
- Upskilling with regular training
- Offering a balance in how and where you work
- Awarding long-term plans
- Growth (mapping out the potential and growth within organizations)
Discretionary Bonuses (Strings Attached)
Family offices have always focused on discretionary bonuses. According to Forbes, about 78 percent of all family offices in the United Kingdom and 74 percent of them in the US opted for them to reward the staff. However, those alone might not work. Roughly 17 percent of all UK-based and 20 percent of US-based family offices also use formulaic bonuses that are more structured. These data-driven bonuses are now crucial.
However, the focus for family offices continues to be on private equity firms and private banks. Niche asset classes have grown in popularity and include cryptocurrency. Therefore, family office leaders now start using discretionary bonuses exclusively, even for investors.
These individuals are responsible for many assets, and most family members want to broaden their horizons. Therefore, there are new sets of requirements, such as level of risk, specialism, and commitment. Such idiosyncrasies will make it laborious and rewarding when valuing assets.
Benefits of Discretionary Bonuses
Discretionary bonuses will help the family office incentivize its staff without navigating through a complicated structure and improve the process more.
Instead of using formulas and giving non-objective praise to the staff, all professionals within that family office environment have a comprehensive list of targets, objectives, and deliverables and are rewarded accordingly. This will align talent from a family office executive search over longer periods of time and assist with wealth management.
Doing the Right Things
The year 2021 was focused on regulation, risk, and ethics, so the executive search firm had to focus on doing things correctly.
3 Tips That Help
Doing the right things for family office recruitment means:
1. Online Security
The family office practice must be focused on online security and strengthening everything from within. There are many hackers out there, and a single-family office might be the target.
2. Hire Fresh Talent
Executive recruiters are essential to help companies find family office talent. These professionals are being taken away from private banking. They must still be there to create socially responsible investment decisions that back the private markets capabilities.
3. Improve Reputations for Wealth Management
According to Business Insider, wealth advisors are getting taken away from private banks and equity firms. They’re now pushed to family offices to help family businesses deal with the family’s financial decisions.
Therefore, executive recruiters must thoroughly vet potential candidates, focus on putting resources where they go, and help their families. Younger generations typically turn to executive recruiters to assist with their hiring needs.
Where to Get Assistance
Executive recruiters are crucial for family offices and will continue to be for a long time.
It’s important that you understand and learn about the challenges family offices will be facing. Contact us today for a free consultation at email@example.com or 212-971-0033.