• Growth of family office sector supports increase in external recruitment
  • Demand for analysts and investment talent and growth of hybrid workplaces
  • Foundation – 50 percent+ of family offices were established in the last ten years
  • Compensation – CEOs paid $396K - $500K per annum and CFOs $330K - $396K
  • Gender – 92 percent of CEOs and 88 percent of family office personnel are male (although female presence increasing on boards)
  • Succession – Only 44 percent have a succession plan in place
  • Investment – 60 percent have an investment committee in place

The growth of Australian family offices in the past five years is driving an increase in demand for investment and management staff according to the KPMG Australian Family Office Compensation Benchmark Report 2023. The survey, produced by KPMG, together with Agreus and The Table Club, provides a detailed picture of compensation trends in the fast-growing family offices sector.

With the increase in the complexity of family offices the focus is on ensuring compensation packages are competitive in order to attract talent and drive growth and productivity.

“Family office employees in Australia receive competitive compensation and benefits in comparison to their peers in similar roles across the globe, said Robyn Langsford, KPMG’s Global Head of Family Business. “But for family offices, having the capacity to benchmark their compensation performance relative to peers locally and globally is a powerful tool. Currently only 27 percent of family office professionals in Australia were offered a Long-Term Incentive Plan (LTIP).”

Ms Langsford said that single family offices continue to operate in relative isolation and there is no public list nor requirement to register as a distinct financial services entity. She highlighted the fact that the family office sector in Australia continues to grow and prosper with the creation of sustainable family enterprises across generations. The structure is also increasing in sophistication as family offices evolve with over 50 percent having Assets Under Management of $1 million to $500 million, and 58 percent having formal governance procedures in place.

“Family offices are increasingly shaping themselves with a corporate-style structure reflected in their approaches to investment, succession planning, governance – and recruitment. At KPMG we are often asked by family offices, ‘What should I pay my CEO?’,” she said. “Family office principals should take heed that while the data suggests packages are competitive, so too is the demand for talent with the unique skill sets that family offices are looking for.

Robyn Langsford said: “With increased mobility comes heightened pressure to provide a compelling reward package with a value proposition for staff that includes cultural alignment and the capacity for flexible working. These are not issues that only affect family offices, but they are symptomatic of the change in the profile of family offices as professionalised institutions capable of offering career pathways and growth.”

Attraction of talent to family offices

Across the globe, the survey showed that 40 percent of family offices are looking to hire staff in 2023 and 33 percent of family office professionals will be looking for a new role this year.

As a business model, the family office is now recognised by suppliers of services and consumers (the founders and their families) alike. In Australia, they largely remain small employers, with fewer than 30 percent of family offices employing more than 10 people. Globally, an average of 23 percent of survey respondents reported having five employees or less. In the Australian cohort, this figure was 50 percent.

“It’s also noticeable that being able to retain in-house teams can add to the long-term success of the family office operations as the objectives and purpose of the roles inside the family office become more tightly defined. Said James Burkitt, CEO and Founder of The Table Club. “We’re also conscious of the fact that as employers, family offices are not only competing for talent with investment banks and asset managers, as is traditionally the case, but they’re also working to attract staff from other family offices as staff mobility within the sector increases.”

The number of employees in a family office does not necessarily dictate the amount of financial capital that is under the office’s control. Australian respondents to the survey reported that 40 percent were managing wealth on behalf of only one generation, 35 percent were managing wealth on behalf of two generations, 20 percent were working for three generations and 5 percent were working on behalf of four or more generations. In the US, 18 percent of respondents were managing wealth on behalf of four or more generations.

Robyn Langsford said: “The implications for family offices in Australia, as they mature, will be a requirement to either confirm or refresh the role that the family office plays on behalf of the family. The sector is seen as increasingly attractive to professionals with candidates from inside the financial services industry, such as ex-private bankers or former investment analysts.

Competition for talent

Ms Langsford said people are being attracted to the family offices sector by its less bureaucratic processes or the opportunity to generate financial returns they can share in by way of access to Long-Term Incentives, such as carried interests.

“As awareness of family offices as a sector increases, so too does the competition for talent. Importantly, the survey seeks to shine a light on family offices both in Australia and globally in order to help them understand how their peers are designing compensation and benefit arrangements – and what represents a competitive proposition.”

Outlook for family offices

Based on the number of employees at those family offices responding to the survey, the family office sector employs anywhere between 10,000 and 20,000 people in Australia -- well over double the number of family office employees ten years ago.

Ms Langsford said: “There’s now a larger public understanding of what a family office does; one can now describe themselves as working for a family office and not need to explain what that means. Many family office employees have previous experience working with the family, either as part of the existing family business or in splitting roles across the family business and an embedded family office. Loyalty is can important characteristic of family office employment and suggests that the evidence of extended tenure inside family firms follows on into their family office environment.”

The survey also highlights the growing importance of the concept of ‘how, where and

when I work’ to all talent as a precursor to their engagement with family offices. So too is the relationship of the employer to the individual’s own values and sense of social responsibility.

“The rise in the influence of impact investment and belief in the importance of how capital is utilised was a theme that ran through our survey of family offices in 2021, where 70 percent of respondents had either invested in or were conscious of developing an investment strategy around impact. It is a sentiment that is shared by many employees,” she said.

For further information

Marjorie Johnston
KPMG Corporate Affairs
M + 61407 329 430
E mjohnston4@kpmg.com.au