The Great Transfer Of Wealth And What It Means For Family Office Hiring

$84 Trillion is on the move, but finding the right talent to steer it is the real challenge.

Obtaining and retaining talent has always been difficult for family offices. These are inherently idiosyncratic organizations that require professionals with a distinct set of technical competencies who can also align with an eclectic set of personalities across principals, staff, family members and a constellation of trusted advisors. Family office executives must be strategic, proactive, open-minded, agile, and possess high levels of intellectual horsepower as well as emotional intelligence. As we often say at Mack International, we specialize in finding the proverbial needle in the haystack.

Before a family office embarks on this search, much like any investment, they need to define their criteria, crafting a set of parameters that can dictate the type of hire required and ensuring that persona is both aligned with the values of the family and able to fulfill its long-term objectives.

This challenge has been exacerbated by the recent increase in visibility that family offices have gained in the broader marketplace and the number of remarkable opportunities now on offer for talented professionals. Executives can manage extraordinary amounts of liquidity, unlock access to lucrative opportunities and, at times, participate pari-passu in otherwise difficult-to-access investments. These organizations often have a broader mission statement, a singularity of purpose, and a value proposition that larger institutional enterprises are unable to offer. Family office employees can fulfill a meaningful role in a small organization, help a family create a lasting legacy and play a hand in positively impacting the world.

An additional complicating dynamic of the ‘Great Transfer of Wealth’ is that many principals are now looking beyond tax, accounting or investment hires, and searching for their own successors. $84 trillion is set to move downstream to the next generation over the ensuing two decades. This wealth transfer is dovetailing with a heightened interest in a family office industry that is undergoing a paradigm shift towards greater professionalism and institutionalization of service delivery. The movement in assets signals a corresponding generational shift in leadership, causing family offices across the globe to prioritize succession planning and talent acquisition.

Rigorous Evaluation Rubrics

The majority of today’s family principals and executive leaders have lived and worked much longer than any previous generation. The forever widening ‘Next Gen’ cohort that once referred to 35-year-olds can now describe professionals in their late 50s and beyond. This represents a dilemma for wealth owners who now have a limited talent pool from which to source candidates. When layered on top of the idiosyncratic nature of the family office and the personalities its culture demands, it can make finding a successor seem daunting. Principals can often then find themselves choosing between competency and culture fit which are both vital components of any search and risk the longevity of the family office when compromised.

Finding the right hire who is technically proficient, experienced and aligned with the culture of the family is a complex task. The confluence of the ‘Great Wealth Transfer’, the correlating demographic shift in leadership and the limited pool of viable candidates all contribute to presenting families with the most challenging hiring environment to date.

Quality Assessment, Due Diligence, Negotiation and Execution

Assets under family office management are set to increase exponentially, and at the same time, the breadth and depth of responsibility for leadership roles continue to expand. Principals need to focus on making strategic hires today to ensure their legacy lives tomorrow, and the first step is allocating their time, capital and organizational focus accordingly.

At Mack International, we enable families to lead their office into the next generation without compromising on their values. We help families define their hiring criteria, ensuring the candidates we put forward have both the skills and experience needed to fulfill their long-term objectives and more importantly, making sure they are also the right culture fit for the family.

Our upcoming insights will focus on our work with some of America’s largest family enterprises over the last two decades and using lessons learned to present a formula for success that can help your family office create a legacy that lasts a lifetime.