I used to work for someone who gave my company a queer compliment. He said we were “a cross between the Mossad and the SAS”. He didn’t mean that we were experts at covert surveillance or kidnapping, rather that our research, intelligence gathering and execution of business was top rate.

The world of recruitment should always be confidential but this is especially the case in the world of the Family Office. Regardless of whether it be a multi or a single Family Office, secrecy reigns supreme at the top end. Secrecy puts many Family Offices, particularly smaller ones, at a disadvantage in recruitment and they have yet to realise the potential open to them.

The Family Office market has evolved over the last few years with many more true or quasi Family Offices being established and developed. Like any other group of institutions there will be differences, sometimes considerable, in the way that the Family Office is constructed and run. However, Family Offices are still learning how to hire senior executives. Who is potentially available is often misunderstood. An interesting culture of confidentiality impedes things.

All employers want and deserve a degree of confidentiality. Many Family Office workers come from the global wealth management world bringing private banking confidentiality mores with them. What makes Family Office secrecy so different from, for example, a private bank? The simple answer is that the Family Office and its senior staff are much closer to the ‘client’ than they would be in a wealth manager, much closer to the real issues, much closer to the secrets and much closer to the internal issues and problems that (most) families have.

Much depends on the culture and ethnicity of the Family. One of my clients made the point that whilst some nationalities may be relaxed about how much information is given, others (and particularly the one he works with) can be much less relaxed to the point of being paranoid. Secrecy, confidentiality and cloak and dagger approach is the order of the day!

This can be a very good thing for the Family but it can cause issues when recruiting senior executives. For example, one Family will not appoint a senior executive whose culture is the same as their own. In another case, the exact opposite is true; senior executives must be from the same culture. Some will only hire if the person has existing Family Office experience whilst others feel that to hire from a ‘rival’ Family Office may compromise the integrity of the appointment. Some are reluctant to poach from another Family Office, perhaps fearing they might be breaking an unwritten ‘gentlemen’s agreement’. Some fear recruiting from other Family Offices for fear of reprisals. Or as one senior banker suggested, more a fear that they may hire a “mole?” Is the world of Family Office really one of spies and financial sabotage? In any case, this leads to a restricted pool of talent that, providing the groundwork is done correctly, need not be as restricted as it seems.

To me, the Family Office sector is not realising its long term potential. This is an increasingly attractive sector for senior executives. The work is interesting, success measurable, and rewards commensurate with effort. When it comes to making senior hires Family Offices punch below their weight.

There is good reason for senior hires into Family Office to need special and very careful consideration; one can almost argue that it should have a clandestine approach. The hire has to be as personal and as confidential as the workings of the Office and the Family. With solid groundwork and preparation Family Offices can draw upon a very wide talent pool whilst still retaining confidentiality and integrity.

In fact, Family Offices are one sector where Long Finance should reign. They take a multi-generational view of investment. Legacy is ensuring that your investments benefit those who come after today’s family members. When would we know that Family Offices are working well? When they are clearly hiring the best and brightest in search of long-term family, financial and social returns. Spies need not apply.

^{Dudley Edmunds has been advising banks, financial boutiques and family offices, on recruitment related matters, for over thirty-five years. Whilst his main market areas are EMEA he has also recruited in the Far East and is taking an increasing interest in on-shore India.}