As Milton Friedman once professed, there is no such thing as a free lunch and when it comes to Family Offices, there is no such thing as free talent.
Privacy, loyalty and excellence are all non-negotiable traits belonging to Family Office Executives and in return, they require respect, autonomy and compensation. Great compensation at that.
While it has to be said that professionals do not join Family Offices for the money, when it is in the hands of an individual to generate new wealth, aggressively pursue opportunities and mitigate risk – incentivising those individuals has never been more important.
Despite this importance and in spite of most of these professionals deriving from the benchmarked environments of investment banking and law, Family Offices have always struggled with the concept of compensation.
The requirements of a Family Office are incredibly unique, borderline impossible and so compensation simply cannot compare to that of the Corporate World. While an Investment Specialist in a bank may be responsible for managing client wealth within one or few individual asset class, a Chief Investment Officer within a Family Office may manage a diverse portfolio consisting of both liquid and illiquid assets across multiple sub asset classes. While they share a specialism, they simply cannot share a salary.
In 2016, we set out to solve the problem of compensation by releasing the first Family Office Compensation Benchmark Report – analysing and comparing the salaries, bonuses and demographics of Family Office employees across the world.
Five years on and we’re taking it one step further by unpicking bonus season and what it particularly means for Family Offices with diverse portfolios.
COVID-19, the push to IPOs and the rise of digital assets such as cryptocurrency have all proliferated the diversification of investment portfolios. As a result, it has raised an even bigger question this season over how to reward and incentivise the Family Office professionals responsible for maintaining them.
With more assets under management, a new generation of wealth and what many are calling ‘bonus backlash’ in the world of investment banking, it has never been more important to benchmark Family Office bonuses and in this report, we aim to achieve just that.
This report will explore how each and every Family Office professional is awarded a bonus this season, its structure, drivers, methodology and size. We will inspect how it correlates with assets under management, the size, structure and purpose of the Family Office as well as bringing real-life case studies that both support and counter the stats.
To be one of the first to receive the Bonus Benchmark Report when it is published next week – please get in touch today.