One third of the global population are under the age of 40, classified as Millennials or Generation Z. They control less than 10% of total wealth yet sit on the Boards of one in three Family Offices.

With the next generation assuming an advisory position from afar, pursuing passion projects or fulfilling dreams not made within the Family Office, could employee succession be a viable solution?

As a Family Office recruitment partner, we come across a vast amount of wrong hires within the Family Office which are mostly down to convenient hires. Hires made from either the family or close friends of the family who while ticking the trusted confidant box, might not fulfil the necessary requirements or competencies needed for the position.

It is often the case that we are asked to come in and restructure the team and almost all of the time, the best-solution is to remove the ‘confidant’ from the position they are in, move them into an advisory or committee position and allow a fully-competent and experienced individual to come in and lead the way.

While convenient hires will always exist in the Family Office, with some of course working wonderfully, Family Offices have slowly warmed to the idea of hiring their next generation as the answer to their people problems and it is becoming an increasingly popular solution.

This is particularly the case for families whose natural next-generation have other passions to pursue, are incompetent or unwilling or of course, for those who have reached the end of the family tree. It is also the perfect solution for those who like to take a hands-off approach to their wealth management while reaping the highest possible rewards.

With 63% of the UK’s Family Offices being run by non-family members, 54% of Principals claiming they do not trust their next-generation in leading their Family Office and a further 42% crowning their next generation unready, could the next step in the journey be employee succession?

Arguably, this model already exists within the philanthropic world with those without family leaving their plans in place for external successors to fulfil them. This model in theory would evolve this idea with the employees succeeding the wealth of the family, benefitting substantially in the process.

Do you think employee succession is a viable alternative to traditional intergenerational transfer and if so, why?