Family offices are struggling to recruit and retain staff, and salary isn't the biggest challenge

CNBC

2 days ago

A version of this article first appeared in CNBC's Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox. Investment firms of the ultra-wealthy spend as much as 72% of their budgets on C-level staff, according to a new report. And yet, even family offices with massive portfolios face headcount problems, per a survey by wealth manager AlTi Tiedemann Global and research firm Campden Wealth. Nearly eight out of 10 family offices reported difficulty hiring and 54% expressed concerns about retaining key staff. The survey, provided exclusively to CNBC, polled 146 family offices between November 2024 and March 2025. The problems are particularly acute for large family offices, despite being able to offer more competitive salaries, with 92% of firms managing at least $1 billion reporting recruiting challenges. Large family offices also reported higher turnover, averaging one employee departure every nine months, according to the report. Smaller family offices with $150 million to $249 million in assets generally reported fewer retention issues, as they could rely on family members for many key roles. Many older family offices, regardless of size, need to find new talent as staffers retire, said Erik Christoffersen, head of AlTi's multifamily office practice. There is also fierce competition from institutional investors over a shrinking pool of top-tier investment professionals, he said. "I'm not sure that family offices are prepared for the sticker price shock of the going market rate to really attract and keep great talent year after year," he added. Perhaps a bigger challenge than compensation, according to Christoffersen, is the lack of clear or attractive long-term career opportunities in the family office space. Fifty-five percent of respondents identified this as a substantial impediment, while only 26% cited compensation. "I'm not sure it's always that compelling a job description, and I think they need to really spend more time showing what's so great about our family office," he said. As for current employees, he said, "family offices can revisit the organizational structure to maximize the strengths of those talented individuals, so you can broaden and make more interesting their job and ideally compensation also can go upwards with it." Better benefits and more flexibility, especially remote work, also make it harder for employees to leave, he said. Christoffersen added that all family offices, other than the very largest, should take advantage of outsourcing to cover any gaps in-house. In light of market volatility that is unlikely to go away, having best-in-class talent is more crucial than ever, he said. "In the last decade, with low cost of capital and very little volatility, you just saw all ships sailed great or the tide rose for all boats," he said. "Now in this decade, we're seeing much more volatility. And you can't just rely on a passive index portfolio."