Insights on Family Office Compensation Trends and Recruitment Strategies from Mack International's Experts

Family Office Compensation and Talent Management in 2025

On May 6, 2025, industry leaders Linda Mack and Brian Adams from Mack International took part in a pivotal panel discussion hosted at Katten's New York office, diving into the pressing trends and strategies surrounding family office compensation and talent management for 2025.

The Panel Overview

The discussion featured a knowledgeable panel that included notable figures like Mitchel Pahl from Katten and Trish Botoff of Botoff Consulting. They engaged with a live audience while also providing a virtual option for wider accessibility. The event's prime focus was on the evolving landscape of compensation frameworks, particularly the significance of long-term incentive (LTI) plans amidst a market characterized by multifaceted dynamics.

Rising Influence of LTI Plans

Underlining the discussion was an emphasis on the escalating adoption of LTI plans. According to data presented from a comprehensive survey conducted by Botoff Consulting, the usage of LTI strategies among family offices has seen a significant rise from 40% to 54% over the last decade, with a noteworthy 72% adoption rate among those managing assets over $2.5 billion. The top three LTIs discussed—deferred incentive compensation, co-investment opportunities, and carried interest—highlight a clear trend toward enhancing executive retention and performance alignment within family offices. Trish Botoff's insights illustrated how co-investment opportunities, at 57%, have even outpaced deferred compensation plans in popularity.

Addressing Leadership Transitions

Linda Mack articulated how the shifting demographics, primarily the retirement of baby boomers, is intensifying the need for effective succession strategies within family offices. “Boomer transitions” are not merely about changing roles; they involve a pressing need for recruitment strategies that ensure not only skills alignment but also cultural fit. Brian Adams noted the acute nature of this issue, where the typical roles previously held by seasoned executives are increasingly fragmented, often warranting multiple new hires. As expectations for leadership evolve, the question arises: should offices insource or outsource certain functions?

Cultivating the Expert Generalist

In an ever-complex field, the demand for the 'Expert Generalist'—a leader proficient in wealth management disciplines—has surged. Linda highlighted that this role transcends individual expertise; it encompasses a holistic understanding of a family’s financial ecosystem, ensuring all elements work cohesively towards shared objectives. The challenge grows, however, as hyper-specialization diminishes opportunities for broad-based training, making the recruitment of such versatile leaders an uphill battle.

Strategic Recruitment Approaches

With competition for talent at an all-time high, Mack and Adams emphasized the necessity of a strategic, methodical approach in sourcing executive talent. Their proprietary assessment tools, paired with their understanding of family dynamics and objectives, play an instrumental role in defining ideal candidates. The audience was particularly engaged when discussing recruitment strategies, recognizing the critical need for clarity and alignment within family offices, especially when identifying what they seek in their leadership.

Building a Family Office

Drawing parallels to construction, Linda stated, “You would never build a house room by room without an overall plan.” Mack noted three fundamental considerations when establishing a family office: defining the office’s clientele, clarifying the scope of services, and determining in-house versus outsourced service provisions. With around 25% of Mack International's placements being families setting up offices for the first time, initial hires are often Expert Generalists to coordinate these foundational services effectively.

The Allure of Virtual Family Offices

An interesting point of discussion was the trend toward “virtual family offices,” especially among first-generation entrepreneurs. Brian reiterated the curiosity surrounding this model, stressing that while it presents an enticing concept, it demands a higher caliber of expertise from leaders tasked with managing virtual teams, ensuring all services meet the standards of traditional family offices.

Conclusion

The discussion culminated in an interactive Q&A session, leaving attendees equipped with valuable insights tailored to their positions within the varied spectrums of family offices. The event underlined the dynamic landscape of talent recruitment and compensation strategies while shedding light on Mack International's esteemed methodologies in navigating these challenges.

About Mack International

Mack International, led by Linda Mack, stands as a premier executive search and consulting firm, specializing in family office demographics. The firm’s methodologies and expertise draw upon a significant understanding of the unique challenges faced by families in managing their wealth across generations. Their comprehensive services extend from executive search to strategic consulting, ensuring families effectively navigate the complexities of wealth management and succession planning.