Salaries for senior executives at family offices are increasing, and almost one-third of chief executives and managing directors now earn more than £300,000 ($386,000) a year, according to a new report.
Produced by London-based family office recruitment specialist Agreus, the Family Office Compensation Benchmark Report 2017 also found that fewer family office staff members are receiving an annual bonus.
“The obvious thing that we’ve found is that with a lot of the salaries there’s been an increase, particularly at the top end―the chief investment officers (CIOs) and chief executives,” Paul Westall, a director at Agreus, said.
“That’s a trend from the previous year.”
Among chief executives and managing directors, 31% now earn more than £300,001 per year, this percentage being more than for any other salary category.
In the previous year’s report, the most popular salary category was £150,001 to £200,000, but in 2017, this category accounted for 24% of family offices, putting it in second place. With CIOs the £300,001 plus category is also the most popular.
While not directly comparable, the results tie in with Campden Wealth’s Global Family Office Report 2016, which found family office chief executives earn an average of $309,000.
Westall suggested families were “taking less risk” so had increased base salaries at the expense of bonuses. Among all family office employees, 15% did not receive a bonus, an increase on the previous year, while 72% received a discretionary bonus.
The report surveyed about 250 family offices, looking at staff numbers, years of operation, geographical origin of the family, assets under management, asset classes, staff salaries and bonuses, and staff benefits.
Agreus said it was likely the report was “the largest survey of employees working in single family offices to date”.
Of the families surveyed, 28% were from the UK, 26% from Europe, 14% from the Middle East and a little under 10% from North America. Just over half the family offices had been operating for more than a decade.
Another issue highlighted in the report was increased investment by family offices in equities and British property following the drop in sterling that came in the wake of the UK’s decision to leave the European Union. Other UK assets have also proved increasingly attractive.
“We’ve helped Chinese [clients] looking to buy small companies in the UK because of the drop in the pound,” Westall said.
A total of 91% of family offices invest in equities, 86% in property and 85% in private equity.
The report is the third such annual survey produced by Agreus. Westall said it was useful to clients because it could “help with benchmarking what they should pay staff”.
The discreet nature of family offices means information on, for example, salaries of staff members is not widely available.
“The family offices found it really helpful and wanted more detail on what bonuses they are paying, they wanted to know what benefits should they offer them,” Westall said.