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How to find the right person to run your family office

Identifying the best candidates starts with defining what’s most important to your family. This checklist can help

Pyramid made of up puzzle pieces with a blue silhouette representation of a person sitting on top of dark silhouettes.

In many ways, the senior members of your family office are like members of your family. Not only do they have a deep – and sometimes very personal – understanding of your finances, investments, philanthropic goals, estate plan and business dealings, but they might also attend family functions or have acted as a trusted counsellor for generations of family members. When someone like that decides to move on to a new opportunity or retire, how can they be replaced?

“If the head of your family office hasn’t groomed someone to take over their position, and your family doesn’t have a sound succession plan in place, the process of finding someone who is right for your family can be difficult whether you have an office that’s 30 years old or a fledgling one,” says Holly Harben Swan, Managing Director, National Family Office Consulting Director at Bank of America Private Bank Family Office. 

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If the head of your family office hasn’t groomed someone to take over their position, and your family doesn’t have a sound succession plan in place, the process of finding someone who is right for your family can be difficult whether you have an office that’s 30 years old or a fledgling one.

Holly Harben Swan, Managing Director, National Family Office Consulting Director at Bank of America Private Bank Family Office.

The good news is that planning for succession in the leadership of your family office can pay dividends in helping your family articulate its values and priorities. Here’s how to get started.

Keep the focus on your family

Ask various family members and different generations to define the ideal candidate and the skills they should have. All family offices are different, so figuring out who the right person is for a position depends on spelling out the family’s individual and communal needs and goals.

The strengths of your current officers may help different family stakeholders define what they’d like from a new hire.  If the current head of your family office has an accounting background, for example, and that portion of the office is robust, younger family members may want the job to be filled by someone with a different strength, such as estate planning.

Once you’ve come to a consensus on the candidates’ essential skills and qualifications, consider what kind of personality best fits with your family dynamics. The interview process for these positions typically has a larger social component to allow family members and staff to get to know the candidate on a personal level. You’ll want someone who can lead your office into the future, but also someone you trust to call about very sensitive family issues.

Define the kind of leader your family office needs

There are four types of leaders to consider as you build your succession plan.

  • An enterprise manager — focuses on the day-to-day business of the family; has broad, general capabilities in all areas handled by the office, such as investments, taxes, accounting and property management 
  • A specialist — has substantial expertise in one area, such as taxes or real estate, that is crucial for your family with additional tasks being outsourced or handled by others
  • A strategist — guides a family office in transition by spurring change and finding new directions
  • An educator/communicator — works with your many family members in an advisory role, leaving some day-to-day responsibilities to other staff

These leadership styles are not mutually exclusive, and you may want a candidate who exhibits a few of them.

A family meeting

Building a family office succession plan: 5 areas to focus on

 
Overall vision: Decide what the future of your family office will look like
  • Identify weaknesses in the current family office structure and capabilities. Seek input from family members with different perspectives.
  • Consider the next generation. Will their needs and ideas alter your thinking?
  • Make a long-term strategic plan for your office, including general objectives over the next 1, 3, and 10 years.
  • Decide what functions the family office should handle internally and what to outsource. How is this different from the current structure?
  • Talk to your advisors about your thinking. The earlier they’re brought in, the more value they can add.
 
Family needs: Invite early collaboration
  • Inventory the personalities, values and needs of your family. Potential candidates will need to engage with the family dynamic in a positive way.
  • Identify family who will be part of the candidate search and decision process.
  • Consider whether any family members may want the position, and how others in the family might feel about that.
  • Establish lines of communication for the process, including initial meetings, check-ins, and approvals. Use existing governance structures as needed.
  • Be open to changing your mind. Your family’s vision of the candidate could evolve as you work through this process.
 
Job requirements: Define the ideal candidate, but keep an open mind
  • Define specific skills you’re seeking. Remember that some skills can be taught during onboarding or over the years.
  • Identify potential areas of conflict with other key staff or family members. Will changes in focus or leader skills be welcomed?
  • Talk with the outgoing senior staff member. They may have valuable thoughts on who should replace them and can help with onboarding or training.  You may also wish to include them in your search committee.
  • Consider internal candidates. Are there junior staff who could fulfill your family’s needs? What training might they need?
  • Refer to your long-term plan. What type of candidate will be able to accomplish your objectives at the direction of family stakeholders?
Search process:  A thoughtful search takes time, so remain patient
  • Write a job description, outlining the position at a broad level. Do you want a strategist, a specialist, an enterprise manager or an educator/communicator?
  • Include critical technical skillsets in the job description, bearing in mind that soft skills have value as well.
  • Establish a search committee consisting of key stakeholders including family, staff and outside advisors.
  • Decide whether you’ll conduct the search on your own or engage an outside search firm.
  • During interviews, remember to consider personality, and how candidates might fit with your family and existing staff.
 
Compensation: Build a package to encourage a long-term commitment
  • Talk compensation with family stakeholders. Will it differ from that of the incumbent?
  • Define the salary, annual bonus, retirement plan option, health insurance, and signing bonus.
  • Establish annual and long-term performance goals and metrics to measure performance.
  • Consider additional benefits that may be attractive to your candidate, such as the opportunity to co-invest with the family or tuition support for children.
  • Decide on the hours and schedule for the job, keeping in mind that flexible hours and locations are more common than ever.
 


Seek guidance when you need it

Professional woman facing and listening to someone across a desk

When you’re creating a plan for succession, remember that you don’t need to do it in a vacuum. We want the work that the Private Bank does for your family to complement the work of your family office, so our family office consultants are a natural fit to help with this type of succession planning. Your advisor and their team can help analyse your existing structures, survey family members, develop job descriptions, provide input on compensation and more.

The goal of any succession plan is to make sure that your family — and by extension your family office — stays on track to meet its short- and long-term goals. Being proactive about your family office succession planning can ensure that your family continues to meet those goals for generations and decades to come.

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