Succession planning has always been a key area of concern for family offices. The generational shift from one Principal to another is a time fraught with nervous tension and the potential for disaster. Tech-savvy next generations may reject many of the operations favoured by the outgoing principal. The next generation may not see the value of maintaining the family office.
The same is also true for employee succession, an issue identified by Deloitte in its last annual Family Office Trends report as one of the biggest worries for single family offices. Mark Somers, of the Somers Partnership, reassures that specialist family office recruitment agencies can help make employee succession planning successful and more reliable. Family office recruitment consultancies can introduce offices to new and exceptional talent, whilst maintaining the level of discretion and privacy that is essential to the industry.
The reality of the family office
In his new book - How to Work for a Billionaire - Mr Somers describes the industry for family office candidates, highlighting the strict requirements of family offices. His intention is that candidates are realistic, including quotes from his clients, the owners and employees of family offices and a wide range of family office professionals to give as complete and accurate a picture of the industry as possible.
One of the issues addressed in the book is the uncertainty of the family office environment in comparison to more fixed corporate structures. A quote from Seb Dovey, former co-founder of Scorpio Partnership, describes this as “less about money management expertise these days, and much more about the people management side of things […] this stretches far far beyond wealth.”
Whether it is an emotional investment decision or the succession of a new principal, the landscape of a family office can change quickly. This environment takes an individual who is flexible, personable and able to remain focused, even in shifting tides.
When the principal retires or dies, the family and the family office must adapt to the demands of the new principal and their individual quirks. Sadly Covid is bringing this in to stark reality as it is a threat to many of the ageing principals of family offices and is potentially accelerating this trend. Of course, the transition does not always go smoothly and some family offices do not survive the changes.
Another key concern for family office professionals highlighted in Deloitte’s 2019 trend report was the educati...