“There’s no such thing as a free lunch” – Milton Friedman
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 often in the hands of one individual to generate wealth, mitigate risk and cut costs, incentivising your staff has never been more important.
Despite this importance and in spite of most of these professionals joining from the benchmarked environments of banking and broader financial services, Family Offices have always struggled with the concept of compensation.
The requirements of a Family Office are 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 a few asset classes, a Chief Investment Officer within a Family Office may manage a diverse portfolio consisting of both liquid and illiquid assets across multiple asset classes. They simply do not warrant the same 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 have taken this 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 further 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 do just that.
We 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.
Download the full bonus report to find out more.