2025 Talent Predictions for Family Offices

How shifting geopolitics, demographics, and investment strategies are impacting talent management

2024 was a year of professionalization and innovation in the family office community, with shifting geopolitics, demographics, and investment strategies changing how family offices hire executive staff.

As global conflicts and sea-change election campaigns spark conversations about long-term wealth preservation, the ongoing surge in wealth transfer has triggered a move toward succession and an acceleration in the creation of family offices, accompanied by an increasingly competitive search for the leaders of those offices.

As family leadership transitions continue to occur at an accelerating rate and the next generation steps into leadership positions, increased allocations to alternative asset classes have also sparked renewed discussions about outsourcing. While the outsourced chief investment officer (OCIO) model has risen in popularity for many, so too has the demand for exceptional and entrepreneurial in-house talent.

The present and public face of family offices

Family offices have an ingrained culture of discretion. Confidentiality, control, avoidance of conflicts of interest, and customization are often the primary drivers behind the creation of a family office. These underlying motivations continue to drive family office structure and behavior, despite a myriad of new legislative and regulatory efforts aimed at requiring more regulation and disclosure in the industry. What might shift as we progress into 2025, however, is the stance some family offices take to attract investment opportunities and talent.

We expect family offices, and the next generation of leadership, to take a more visible stance: increasing their presence at industry events, networking and collaborating with other families, and becoming thought leaders in an increasingly sophisticated marketplace. As a result of this higher market profile, family offices will require greater protection, more media proficiency, and a talent attraction strategy.

Looking inward and innovating

Family offices will also be taking a greater look inward, spending time analyzing the successes and missed expectations of their enterprises and exploring internal gaps in their resources. We will see a shift in focus to educating and upskilling family and non-family members, and, in line with the marked professionalization of the industry, executive searches will be more rigorous than ever as families focus on higher-level requirements to keep pace with the accelerating institutionalization of the industry.

New leaders will also be expected to play a critical role in educating and guiding the next generation, managing intergenerational dynamics, and values-based leadership. We already see this being modeled by America’s most successful family enterprises and predict it will become a pivotal trend in 2025 as families integrate their talent management strategies with their overall family office structure based on the conviction that talent is critical to long-term success and sustainability.

Talent that offers autonomy and alignment

The OCIO model will continue to gain popularity among many family offices in 2025, but as large and established family offices continue to diversify portfolios to include investments in new industries and jurisdictions, more professionals will be required with specific sector experience.

While the outsourcing model offers access to broader expertise and defrays some overhead, hiring specialist investment leaders in-house gives family offices more control and alignment of investments with the unique family values and tax positions.

Playing to the family office advantage

To attract and retain this talent, family offices will continue to be incredibly creative in how they compensate their staff. This relates to a competitive basic salary, benchmarked against some of the world’s most elite investment firms, and a balanced mix of financial and non-financial rewards. This includes long-term incentive plans, such as co-investment opportunities (often with recourse loans to enable leverage), carried interest, phantom stock, and other deferred plans to incentivize exceptional performance and alignment.

Family offices are realizing the unique and competitive hand they can play in attracting talent and will use it in line with increasingly sophisticated human capital plans to drive desired behaviors and, ultimately, succeed.

2025 will be the year of collaboration, education, and innovation, and in that spirit, Mack will continue to host a calendar of intimate events for family office leaders and professionals to come together to learn and share best practices to stay dynamic and competitive in the forever-changing family office landscape.