Family offices are increasingly professional and that means paying more for top talent
The wealthiest individuals and families in the U.S. are demanding more from their family offices, including more wealth and investment management, which is driving higher incentives for the best talent.
The latest bi-annual compensation report from Morgan Stanley’s Single Family Office Advisory group reveals that 94% of staff in family offices had received or would receive an annual salary increase in 2023, outpacing the general U.S. market.
It also found that bonuses were at or above the level of 2022 as part of greater incentives to retain and attract the best talent amid a shortage for all roles but especially for those in accounting, tax, investment, and support.
Almost six in ten respondents reported the use of Long-Term Incentive compensation plans, rising to 47% including 47% of firms with under $1 billion AUM, and 72% with over $1 billion AUM.
“What we’re seeing today is an increasing sophistication and formalization of family office structures, and it’s important for compensation plans to reflect this,” added Fountain. “The growing use of LTI plans is aiding in attracting that top talent, especially for offices that have in-house investment teams. Practices like deferred incentive compensation, co-investment opportunities, carried interest, profit sharing and equity can help keep talent who are excited by and invested in overall success for the family.”
Morgan Stanley recently revealed that its financial advisors will have to generate more revenue in 2024 to retain current levels of take-home pay.
The report was conducted in collaboration with family office data firm Botoff Consulting and polled 400 U.S. family offices with more than three quarters of participating families having net assets of at least $500
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