(Bloomberg) Family offices are on the hunt for talent. Yet attracting financial hotshots to C-level positions at wealthy families’ investment offices is tricky work, mostly because not everyone is prepared for the culture change. Working directly for some of the richest people in the world brings perks such as trips aboard superyachts, but it can also come with family drama and offbeat personalities. Paul Westall and Tayyab Mohamed, directors at Agreus Group, a resourcing and recruitment company focused on filling roles at single-family offices, say they first make sure candidates understand what they’re getting into before putting them forward for a job. In an interview with Bloomberg Markets, they describe what it’s like to work for a family office and what families expect from their investment managers.
Bloomberg Markets: What are some challenges you face when recruiting for single-family offices?
Paul Westall: It’s not difficult to find qualified and talented people in New York or London, but the mindset and culture of a family office are very different. Teams are a lot smaller. Finding someone who is trustworthy and discreet and someone the family can rely on is a main concern because their fortunes, their livelihoods, and entire generations of wealth are at stake.
BM: What type of person does well in those settings?
Tayyab Mohamed: Someone who’s worked at a large corporate firm and managed a whole team and never done any menial work might not fit into the family office mentality. For example, there is this really big South Asian family office that we work with in London who had a CIO, and he said they didn’t even have a reception [area]. He was laughing about how sometimes he would let the visitors in and make them a drink—and this was the CIO. We’ve also had loads of scenarios where CIOs have spent years managing traditional asset classes, and then suddenly the principal has decided to go out and make investments in completely different things like racehorses. The guy had never dealt with that kind of stuff, but he went out there, got done what he needed to get done, and learned. Someone with a big ego might not necessarily work very well in that kind of environment.
PW: Because you have to manage different family members and different relationships and work with type-A people, generally people who work in a family office are personable, likable, with high emotional intelligence.
BM: What are some other culture shocks people might expect when working at a family office?
TM: The willingness and the attitude to be at the beck and call of the family can be a culture shock. When you work for the family office, you are there for the family to serve their needs at difficult times. For example, you might have a holiday planned, and you have to cancel that.
BM: What about when a principal dies?
PW: It can change things totally. That’s when we often see a total shakeup in the family office. The children may have different ideas of where they want their money invested, so that can be the stage in the process where they make whole changes and they decide to bring in their own people.
BM: Typically, in what stage of their career are people looking to switch to work in a family office?
PW: When we first started around 10 years ago, it was seen as a career move for someone who’s spent 30 years in banking or investment management and is looking for a comfortable job for the last few years of their career. That’s starting to change, and I think it’s becoming a proper career path for people and becoming a career sector of its own. People now mainly see it as a way to get front-line access to deals, especially if you’re at the midstage of your career and you’re on a big team and not getting the sexy access you might want. You’ll get that in a family office, but you’ll also get the very mundane stuff as well, so it’s a bit of a battle.
BM: What should people considering a transition into a family office expect in terms of pay compared with their current roles?
PW: Obviously, salary needs to be competitive with the market they’re coming from. Naturally, if you’ve been the CEO of a big investment firm, then it’s impossible to make the transition over to a family office [because the salary won’t be enough]. For bonuses, what we find generally is that initially they’re done on a much more discretionary basis, and once that trust has been built up it can move into a more formulaic structure. Once you prove your loyalty and the returns are good, the opportunity for increased salary can be a lot greater. That’s often the leap of faith that candidates need to make. We’ve heard amazing stories where, for example, there was a CEO who had been doing a really good job, and so, as a bonus, his principal let him and his family spend a week on board their £300 million [$381 million] superyacht.
BM: How does diversity in the family office space compare to that in the rest of the financial world?
PW: The gender side is comparable to the investment banking and management world. It’s quite largely male-dominated—around 71% male. We’ve seen a trend, though—that some of the most successful family offices are run by women.
TM: In terms of race, families tend to hire people who are good for the job, but they don’t have HR or an internal policy to make sure they diversify. I think they generally tend to hire people like themselves for the comfort aspect, though I don’t think they’re making a conscious effort to do that.