Culture Fit Is Vital In Recruiting for a Family Office

December 15, 2016 – These days, culture fit is a critical factor in recruiting for virtually any high level position. But when it comes to identifying someone to lead a family office, that particular requirement is heightened to the maximum. Finding the right person for this type of role calls for the most thorough of assessments. It’s a process that reaches into a family’s most personal matters, with financial considerations among the most obvious.

Identifying the right candidates, meanwhile, can also be a challenge, as a prospect’s skills and experience are essentially just a starting point. Given that family office leaders typically stay in their jobs for as long as a generation, one cannot overstate the need to find a truly proper fit.

“When we conduct a search, we start with a 360-degree assessment process where we interface with all of the people with whom the candidate will need to work or collaborate so that person will be instantly effective when they begin in the role,” says Linda Mack, founder and president of Chicago-based Mack International. “This almost always involves the principals of the family, and in some cases multiple generations or multiple branches of families, their staffs, and advisors.” It is unlike searching for any other client. “It is a highly personal process in which we communicate very closely with families. And of course when you layer in private discussions about their wealth, it can and does become very personal, very quickly,” she notes.

Common Thread: Family

Linda’s group is one of only a few executive recruitment firms that serve the highly specialized family office sector. With an expertise in asset and wealth management, Linda and her colleagues have over the last 15 years helped to staff C-suite executives for some of the more prominent family offices in the world. Earlier this year, Mack International was inducted into the inaugural “Hunt Scanlon Media Financial Fifty” rankings, a list of top financial services search specialists.

Mack International is a small boutique that stresses collaboration. Indeed, the team concept is crucial to the firm’s success. On the buy side, as Linda explains, the firm works with families, their family offices and family business enterprises, family investment companies, and family foundations. The common thread is family. On the advisory side, the firm works with organizations that serve the ultra-high net worth family office market. That includes large broker dealers, private banks, boutique wealth management firms, niche investment consulting and asset managers, trust tax estate specialists, among others.

Culture Fit, Trust and Family Dynamics

“With all of those constituencies in play, culture fit and trust are paramount to what we do and how we approach our assignments,” Linda says. “And our team structure is important and serves this market well. When it comes to searches on the family office side, we will put a team of two to three very experienced people on those assignments. They will typically have at least 15 to 20 years of experience specializing in the minutiae of family office work.”

Everyone who works on family office assignments also works on wealth and investment management searches. Mack International also works with several independent consultants, who are typically brought in for highly specialized assignments. “For example, we have a colleague in New York who is specialized in investment management,” says Linda. “She will work with us on assignments for CIOs and other investment-oriented types of assignments.”

Family offices are by their very nature highly personal places to work. Still, every family office is different and calls for different types of professionals to run them. “Each family has unique needs, a unique culture, and like any family a family office is made up of many individuals, and they span in some cases multiple generations,” says Linda. “So, from our perspective and before we can even begin to profile what the family office leader will look like, we step back and look at things like family dynamics and, most importantly, what the family is trying to accomplish over the next 15 to 20 years and then we make certain that everybody is in sync and aligned around that vision and the objectives set forth. This, then, enables us to profile the position and to figure out who best will fit.”

For recruiters working with families, nuance is critical. Typically, Linda and her team will open their assessment discussion around the subject of family and delve into long term goals and expectations. Culture of the family office, in the meantime, is never out of mind. “It is a very personal conversation which touches on business objectives certainly, but the discussion about family objectives figure more prominently at least in the beginning,” says Linda. “It is important in any search for a family that the culture is right in the bullseye or it won’t work. So, philosophies, values, communication style, decision making – these all have to be spot on.”

The ‘Expert Generalist’ Leader

“Ninety five percent of every search we conduct is about culture fit. And that is for the incoming family office leader as well. So it works both ways. In terms of potential candidates, the market is surprisingly limited and it can be a challenge for what can sometimes be a generation in time. So what’s that, 20 years? Benchmarking positions is very challenging as well because title nomenclature can be very misleading in the family office world.”

The kind of person that Mack International looks at as head of a family office is someone who can see the broad picture, keeping in mind the family’s specific goals and mission. “There is an old saying in the business that when you have seen one family office, you’ve seen one family office,” says Linda. “Each one is that unique – they are like snowflakes.”

The work can be complicated, with a lot of different areas to handle, many of them intertwined. “Typically, for the head of family office we are looking for the ‘expert generalist,’” says Linda. “This is the person who needs to possess an understanding of all of the functional areas of wealth management and the family on a horizontal basis but who also maintains a keen knowledge across the whole continuum of finance, accounting, tax, estate planning, investments, philanthropy, and so forth.”

“The family requires that the professional they hire to manage the family office understands what the family’s requirements are, how they are staffed, and what their objectives are. That person also has to have tremendous peripheral vision because they need to understand that when something happens 180 degrees to the right there might be three things that will be affected 180 degrees to the left.”

A Personal, Highly Confidential Relationship

Family office leaders must be smart and highly resourceful. But no one can anticipate everything that might come up or have all the answers. “Nevertheless, they should know all the questions to ask and they should have the network and resources to be able to tap into to get the information that the family needs to make a good decision,” says Linda.

They are also charged with coordinating among and between the external advisors and the internal staff, making sure nothing falls through the cracks between all of the functional areas of the family office. “When we recruit CIOs or CFOs for a family office, we are looking for all of the technical skills and competencies so they are able to perform the job at hand,” Linda adds. “In these instances we might be getting into investment philosophy or even compensation philosophies. That’s where culture fit comes into play in big ways.”

One significant factor that Linda and her team must always keep in mind is the expected tenure of such jobs. Fifteen to 20 years is typical, and the relationships between those that run family offices and the families themselves become very close. Getting the cultural fit right, therefore, is paramount. “After all, family office leaders will be with one family for what can be at least an entire generation,” says Linda. “When we are doing search work for an institution, certainly it’s a personal relationship between us and their team and between the institution and the leader they ultimately choose, but it’s still an institution. When working with a family, it’s just so much more of a private, personal relationship, and it’s a confidential family relationship. That’s what sets this apart so much.”

Linda and her team help families define performance expectations for their incoming leaders and metrics to define and evaluate what success might look like. Given the cultural differences, those measures are unique to each family. The longer tenures that one finds with family offices must also be taken into consideration. “This is why the identification and vetting process is so critical,” says Linda. “When you couple that with what is already a narrow field of candidates who are the best qualified for these types of head of family office positions, it truly requires a skilled recruiter to bring all this together.”

Contributed by Stephen Sawicki, Managing Editor and Scott A. Scanlon, Editor-in-Chief — Hunt Scanlon Media

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