The single family office of a billionaire may employ up to 50 or more staff (Vulcan, the family office of Paul Allen reportedly has 500 staff) and will include diverse specialists such as fitness trainers, special forces operatives, pilots, yacht captains, tutors, archivists, IT technicians, drivers, public relations, lawyers, as well as the more traditional butlers, nannies, chefs, bankers, accountants and investment managers.
The structure and purpose of each family office is as unique as the entrepreneur who originally created the wealth and this individuality creates both challenges in recruitment as well as highlighting the need to protect the family and assets from incompetents as well as the attentions of a talented Mr Ripley.
According to Boston Consulting Group there are now more than 14,600 families with at least $100m in assets, up 42% since 2008 and since we set up the Somers Partnership a decade ago in 2005 we have witnessed firsthand the tremendous changes that lie behind these global figures.
In the spirit of the Royal Military Academy, Sandhurst’s motto ‘Serve to Lead’, we founded our business to serve family offices and the wealth management sector generally. This year we are celebrating our first decade of serving the leaders of some of the most innovative and dynamic organisations within the sector to find the best and most appropriate talent to meet the needs of the family offices and the families they serve.
Along the way we have observed some spectacular mishaps and this and other observations from our vantage point looking across the sector have led us to conclude that there are three types of characters who already work within family offices, or who write to us in the forlorn hope that we will find them a job within a family office.
Categorisation of Candidates
Taking our lead from the master of caricature Sue Macartney-Snape, we have identified three types of characters prevalent within the family office sector.
l Rain Makers are supremely competent and amount to perhaps one in ten professionals in the sector, ideally they should hold positions such as:
l Chief Executive Officer, where they excel at concurrently managing the complexities of relationships with family members with differing agendas whilst concurrently running an efficient team of specialists.
l Chief Investment Officer, consistently meeting the undoubtedly ambitious investment objectives with the investment directors whilst ensuring that the wealth is protected from loss at all times.
l Finance Director, taking responsibility for the management information accurately ascertaining and reporting the comprehensive financial situation including of many assets (both physical and financial) in multiple jurisdictions held in complex structures.
l Lawn Mowers account for 70% of the specialists to be found in the sector. The better ones are competent and enjoy the security and status of their position and wish to maintain the status quo. The resistance to change increases as you travel across the spectrum and meet those whose motivation to work in the family office sector was driven by a desire to find a comfortable sinecure role in the twilight of their career.
l Well Poisoners represent 20% of the employees in the sector and a certainly higher proportion in the aspirant ‘wannabes’ whose CVs are filed in an ever growing dark recess of our database destined never again to see the light of day. They are either incompetent, misguided or actively dangerous Walter Mitty-like characters who are attracted to the sector for all the wrong reasons. In a world where fraudsters can easily move from one employer in an offshore location to another without having to undergo the scrutiny of a rigorous background check, they can potentially be very harmful when they find employment within the trusted environs of a family office.
The consequences of placing a Well Poisoner into a responsible lightly supervised role can be dire.
Hiring and recruiting: what’s the difference?
It is important to draw the distinction between the acts of ‘hiring’ and ‘recruiting’.
Hiring is simply choosing someone who is out of work (or about to become redundant) and giving them a job. Sometimes contingency agencies that represent the candidate’s interests (not yours!) and are paid only when you hire the candidate will send their CVs to you in the hope you will hire one of their candidates.
Recruiting on the other hand is the proactive headhunting of an individual from one organisation into a specific role in a family office. This is executed by a specialist retained executive search recruitment firm who align their interests with yours and take responsibility for the successful outcome of the recruitment and selection process.
Clearly family offices who rely on hiring (and this is a surprisingly large proportion) normally not only miss out on attracting the Rain Makers who will protect and enhance their wealth, but also expose themselves to an alarmingly high proportion of Well Poisoners. The best they can hope for is an office staffed by Lawn Mowers.
Protecting and enhancing our clients
To combat the dangers that the Well Poisoners could inflict on clients as well as maximising the chances of attracting a Rain Maker into the family office, specialist recruitment firms have rigorous selection processes.
These include submitting written reports to the Interview Panel comprising; 360-degree reference taking, psychometric profiling, competency-based interviewing and third-party candidate vetting, in addition to the normal face-to-face consultant’s interview assessing their strengths and weaknesses against a comprehensive candidate prospectus.
If you think professional recruitment is unnecessary and expensive then you should see how much engaging an amateur really costs.
