Family office trends7 things to look for in a family office CEO

October 27, 2023

Key things to know

  • A family office CEO works closely with a family with significant wealth on private matters that go well beyond managing an investment portfolio.

  • Finding someone whose temperament matches the “personality” of the family is important, so they can navigate sometimes-tricky family dynamics.

  • Having well-rounded financial experience means a family office CEO will be able to advise on all aspects of a family’s finances, bringing in specialists when needed.

Family offices are playing an ever bigger role in managing global wealth. According to Capgemini, family offices oversee about $6 trillion in assets under management globally.

Selecting the right family office CEO to work with your family is critically important. But with thousands of family offices in the U.S., how do you find the right fit?

What is a family office CEO?

A family office CEO role is different from a typical business role. The head of a family office works closely with a family on personal, private matters that go well beyond managing an investment portfolio. Issues run the gamut from divorce, death and the transfer of wealth to different generations to helping families create a legacy of charitable giving through philanthropy.

 

“Finding one person who checks all of the boxes is a tall order. It’s about finding the best fit for your particular family situation.”

- James Linnett, senior vice president and managing director, client advisory, Ascent Private Capital Management of U.S. Bank

 

“The head of a family office is not only in charge of advising on key financial matters to safeguard and grow a family’s wealth, but oftentimes that person can feel like an extension of the family,” says James Linnett, senior vice president and managing director, client advisory, Ascent Private Capital Management of U.S. Bank.

Finding a family office CEO: Things to consider

The most important thing to do when finding a family office CEO is to understand the dynamics of the family itself. Then, you can match the knowledge, skillset and personality of the individual to the family’s needs and requirements.

Some factors to consider that can guide that search include:

  • Where is the family office in its development? A first-generation family that is still building wealth can have very different needs from a third or fourth-generation family business that has already had a liquidity event, for example.
  • What is the size and scope of the family? Some families might be quite small, while others may have multiple generations, branches, stakeholders and decision-makers.
  • Do you want to create a single-family office or work with an existing multi-family office? A single-family office is fully devoted to your family, whereas a multi-family office shares and resources across multiple ultra-high net worth families.

Top attributes of a family office CEO

Vetting a family office leader requires family leaders to look at the usual resume of experience, knowledge and references. But equally important for this role are the “softer” skills, such as personality and temperament, that can help them build a long-term relationship as a trusted family advisor.

Some of the key family office CEO attributes to consider include:

  1. Family office experience: Look for someone who has experience in the family office industry and a track record of working with ultra-high net worth families or individuals. Ideally, a candidate should have experience working with similarly situated families.
  2. Technical skills: Investment strategy, tax planning and estate planning are all core issues that a family office executive must be well versed in. Does that mean your executive needs to be a CPA? No. An individual does not necessarily need to have deep technical expertise in each sector. However, it is important that the person has well-rounded knowledge so they can offer advice and oversight into the different service areas.
  3. Soft skills: One of the main roles of a family office leader is educating the family on various decisions that they make related to their wealth. As such, good communication skills are paramount. Navigating family dynamics can be a tricky balancing act, too. A good family office executive will have the soft skills to juggle different personalities and opinions, while at the same time doing what’s in the best interest of the family overall.
  4. Trust and temperament: A family office leader works closely with the family on its most personal matters. A family should select someone who understands privacy, discretion and family confidences. Temperament is a highly intangible and subjective quality, but it is critically important to find someone who is a good fit with the “personality” of the family.
  5. Management skills: A family office CEO may be in charge of managing or assembling a strong family office team, both internally and externally, to service all the financial needs of a family. That individual may need to hire supporting staff and be comfortable assessing talent, bringing in the right people, mentoring them and inspiring them to do their best work.
  6. Strong advisor: There is a difference between someone who is service-oriented and a servant to the family. Select someone who is not afraid to offer advice, even if it’s advice that the family may not want to hear. It is not in the best interest of a family to hire someone who will say “yes” to everything and never bring different options to the family.
  7. Good runway to a relationship: Family offices are often long-term relationships. A good CEO candidate is someone who has the capacity to work for the family for 10 to 15 years. It’s more challenging to hire someone at the end of their career, or someone who is looking to climb the ladder and move on to a bigger career opportunity.

As with any major financial decision, selecting the right family office leader to work closely with your family requires careful due diligence. “Finding one person who checks all of the boxes is a tall order. It’s about finding the best fit for your particular family situation,” says Linnett.

It is also advisable to have all decision-makers and branches involved at some level in the discussion, search process and final decision. “Depending on the dynamic of the individual family,” Linnett adds, “even younger generations may need to feel some ownership in the selection of the family office CEO.”

Learn how Ascent Private Capital Management can work and with and support your family office.

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The information provided represents the opinion of U.S. Bank and is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide specific investment advice and should not be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation.

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