The accounting and finance function is crucial for a well-run Family Office, but you might be surprised to learn that only 1% of accountants are the right fit for Family Offices.
Why is accounting important for Family Offices?
Like any other business, an accountant is crucial for the smooth operation of a Family Office. They’re responsible for developing, analysing and interpreting financial statements, while their reports are crucial for the Family Office principal to understand their financial position, and for performance evaluation.
Tax, in particular, is a major concern for a lot of Family Offices, so the accounting function is needed to ensure that liabilities, such as income tax and pension funds, are appropriately addressed.
The technical skills of accountants in a Family Office
The ultra-rich families that use Family Offices typically have dozens of trusts and partnerships, and an array of investments that require oversight and performance reporting. That requires Family Office accountants to carry out a wide variety of accounting and tax services for many different types of assets, as well as handle extensive tax, estate, and philanthropic planning.
Typical duties and responsibilities of an accountant include:
- Book-keeping and accounting
- Preparation of global asset portfolio reporting, comprising property, business shares, private equity and other investments.
- Manage liquidity and drawdown of appropriate funds from the investment portfolio to support future investments
- Reviewing financial statements and assisting with the drafting of legal documents
- Assistance and liaison with audit and tax advisors for the family
- Cash-flow forecasting and analysis of living expenses and household running costs
- Oversight of the family’s broader financial interests, including execution and management of capital expenditure, household expenses, payroll and third-party transactions
Family Office accountants are often required to be ACCA/ACA qualified. A lot of them are drawn from reputable accountancy firms and typically have extensive management-accounting knowledge, corporation tax, FCA and other regulatory reporting experience. Depending on the needs of the family, they might be required to have experience in multi-generational wealth planning, trust and estate taxation. They will also need to have a good understanding of multiple investment types, especially the ones that are popular in the Family Office space, such as private equity funds and other alternative assets.
Why so many accountants are a bad fit for Family Offices
A Family Office is a small and intimate entity and is by nature a very personal and private workplace. Consequently, in addition to being professionally qualified and competent, a Family Office accountant must be a good cultural fit for the values and beliefs of the family. Not being so, will negatively impact staff morale, as well as office performance and productivity.
We always encourage Family Offices to look beyond potential recruits’ core competencies, and instead focus on their values, priorities and goals. A candidate who appears perfect on paper may not necessarily perform well in a Family Office environment. This is why families may prefer those who already have Family Office or wealth management experience, as they are more likely to understand the nuances of working in one.
The right recruit also needs to be able to deal with the personal matters of the members of an ultra-high-net-worth family on a day-to-day basis, so they will need to have a high level of emotional intelligence (EQ). A Family Office accountant must be trustworthy, communicative, patient and have big-picture thinking.
With all of this in mind, we have created a report about hiring for cultural fit and EQ. The full ‘The Complete Guide to Cultural Fit’ report can be accessed here: https://www.agreusgroup.com/the-complete-guide-to-cultural-fit/.
Alternatively, for a more tailored conversation about hiring for your Family Office, please do not hesitate to get in touch. Agreus is an established full-service resources and recruitment consultancy dedicated to working exclusively with Family Offices. We have successfully placed professionals, from entry- through to executive-level, for investments, legal, accountancy and finance, and operational roles in Family Offices across the world. We understand the dynamics of a Family Office and can offer the perfect candidates as well as consultative advice on compensating your employees.
Or, if you are interested in working for Family Offices, please see the link below: