This is one of the only...most comprehensive compensation studies...that focuses solely on single family office investment professionals...
CHICAGO (PRWEB) February 26, 2018
Mack International, McNally Capital, and Botoff Consulting, recently published the results of their 2017/2018 Compensation Survey of Investment Professionals in Single Family Offices. A total of 152 family offices participated in the survey, representing over $100 billion in assets under management (AUM). Data was reported for 303 investment professionals, and the survey findings represent family offices across six AUM tiers.
“This is one of the only, and certainly the most comprehensive compensation studies published that focuses solely on single family office investment professionals,” said Linda Mack, President of Mack International. “As the prominence of single family offices continues to grow in the market, there is an increased need to understand competitive trends in compensation in order to successfully attract and retain the top talent needed to accomplish family objectives and ensure alignment.”
Best practices and compensation data are eagerly sought by a growing number of family offices who understand the importance of creating the right market competitive package for their key executives. Benchmarking and designing a compensation plan require an in- depth knowledge of the market, and family offices looking for data were often disappointed in the lack of availability of this information.
Linda acknowledges that the gap in credible data compelled her along with McNally and Botoff to fund the research necessary to complete the specialized study. “We were consistently told by family offices that they were missing information or found it difficult to access reliable information when it came to designing compensation packages for their investment executives and professional staff. It is such a critical element in attracting and retaining key executives, and there was a definite need to shed light on the subject.”
Survey key findings included:
- 92% of family offices participate in direct investing activity, with 86% of family offices managing direct investments internally versus using a third party advisor.
- A majority of family offices utilize a balanced investment approach that focuses on both wealth preservation and growth. Over 25% of family offices take an aggressive investment approach that focuses on wealth growth.
- Over 40% of family offices provided salary increases greater than 4%, which exceeds the national average of 3.1%
- 55% of family offices use formalized incentive plans or a mix of both formalized and discretionary plans to determine annual incentives, reflecting
- There is an increasing trend toward more structured plans. Generally, the higher the AUM, the greater the likelihood of a formalized approach in determining annual incentives.
- The structure in determining annual incentives is changing. Overall, more than 60% of family offices utilize some form of long-term incentives (“LTI”); 87% of family offices with more than $1 billion in AUM use LTI plans.
- As reported, co-investment and carried interest are the most common LTI plans used; this suggests that families are using long-term incentives to create alignment with executives and investment staff.
Linda emphasized the importance of this highly specialized research: “Mack International was honored to join McNally and Botoff Consulting in conducting this landmark survey. As recognized thought leaders, we wanted to contribute this intellectual capital to the family office community,” said Linda. “We are not charging a fee for the study. We want to provide it to families to help them more thoroughly understand their competitive market and to help them make informed decisions.” Linda expects the next survey to be conducted in 2019/2020. “We urge all family offices to commit to participating in our next survey. With full participation, we can generate the most robust and meaningful data possible, which benefits all families.“
About Mack International
Mack International is the premier, boutique retained executive search and strategic management/human capital consulting firm serving national and international clients in the family office, family business enterprise and the wealth management industries on national and international basis. Founded in 2002, the firm has achieved an exceptional track record of success as evidenced by its unmatched industry expertise, in-depth market knowledge and unparalleled track record of success. Founder and President, Linda C. Mack, has established proprietary methodologies such as the Mack 360© and is credited for having coined the term “expert generalist” in the industry. For more information, please visit: http://www.mackinternational.com.