As the race for talent intensifies, employee retention has become more important than ever, especially for Family Offices.
The ultra-rich clients of Family Offices expect and require high-calibre professionals to handle their financial dealings.
They often come from large and prestigious multicompanies with consistent compensation structures. However, Family Offices often lack a similar degree of compensation management.
We believe that as the Family Office industry matures and grows, compensation should no longer be a product of guesswork but rather, it should be built on research.
With that in mind, and in collaboration with KPMG Private Enterprise, we’ve created the Global Family Office Compensation Benchmark Report. It comprehensively covers all aspects of Family Offices and their recruitment needs, including regional-specific data. This way, Family Offices around the world can better understand the compensation benchmarks in their respective jurisdictions.
At 115-pages, we understand it’s a big report. However, it’s a really insightful read and we do recommend taking some time to go through it. To support you, we’re going to delve into each region to highlight the key findings which may impact your own Family Office. You can read our findings for UK, Asia and the Middle East on our knowledgebase, but for now we’re going to look at what it means for those in the USA.
Learning from the best
With the term ‘Family Office’ being coined by J.P. Morgan in 1838 for the USA, it’s no surprise that the country has the most mature market for Family Offices, of which most are found in New York, in the world. We found that 63% of USA Family Offices have operated for more than 10 years, as opposed to 43% in the Middle East and 39% in Asia.
American offices also tend to be more professionalised and institutionalised, and they often have similar structures to the fund industry or endowments sector.
Some of our other key findings from the report include:
- Composition
35% have fewer than five employees, while 23% hire more than 15. This is most likely due to how some families require very few functions, leading to only a simple office structure, while others need a much more professionalised structure for their much larger variety of necessary services.
- Compensation
The average salary range of CEOs is US$264k-330k with an additional bonus of 21-30%.
One of the most effective measures of retaining employees, especially investment professionals, is providing them with a long-term incentive plan (LTIP). LTIPs are crucial, which is probably why 34% of Family Office professionals in the USA are offered an LTIP, which is very impressive compared with their global counterparts who range from 11-24%. As the industry continues to professionalise we expect, and encourage, these figures to rise much higher.
- Benefits
The most common employee benefit is private health care (61%), due to the nature of the medical care in the USA. Life insurance (46%) and travel allowance (19%) are also common, and, following the pandemic, 77% are allowed to work remotely. No matter what the industry, many employees are eager to return to office life. However, many are equally keen to work from home, either because it removes the need to commute or because it is far easier to care for their own families. While some CEOs might prefer for all their employees to be in the office, it looks likely that having a mix of where their staff work is going to be the default for the foreseeable future. This can be an opportunity though. Not only does it help retain valuable staff members, but it also allows for downsizing of expensive office space.
While these are three of our key findings, the 2023 Global Family Office Compensation Benchmark report has many more.
Find out how you can ensure your key employees not only stay with your Family Office but also remain committed and incentivised.
For a more tailored conversation about how Agreus can help with your Family Office recruitment needs, contact us today.