Just over 18% of chief executives and managing directors of UK-based family offices make £300,000 or more a year, according to a new survey of family office compensation levels, which the survey’s authors say is an indication of the degree of change taking place in the sector.
The salary range the largest percentage of those family office CEOs and MDs surveyed said they fell into was between £150,000 and £200,000 with 27.3% saying this described their annual take-home pay, the data, compiled earlier this year by Agreus, a London-based family office adviser and specialist recruitment firm, showed.
In addition to these salaries, 89% of the family office employees surveyed said they receive a bonus of some kind, with 73% saying they get a discretionary top-up, and 18.2% receiving a “formulaic” bonus.
More than one-fifth of those surveyed said they received a bonus equivalent to 21% to 30% of their basic salary, with CEOs and those in “investment related roles” getting the largest bonuses, typically between 31% and 50% of their salary. A little more than 13% of those surveyed said their bonus was equal to half their basic salary or more.
“Year-on-year we’ve found the numbers of single family offices growing, and increasingly becoming more professionalised,” Agreus co-founder and head Paul Westall, pictured, said.
Higher-calibre job seekers are increasingly taking an interest in family offices, he noted, who “previously may have worked as city fund managers or chief investment officers”.
Still, he added, “there is a certain amount of mystique surrounding what they can expect in terms of salaries, bonuses and benefits” from family offices — which was one of the reasons Westall said Agreus decided to embark on the research that resulted in the report, the first edition of which it published last year.
“Historically you would have been paid more in the City, but now the single family office is a very viable alternative,” Westall went on.
“For example, as a family office investment manager at the pinnacle of your career, you could expect to earn between 31% and 50% of your salary in bonuses. This compares to 15% to 30% at a private bank.” Often there are other perks as well: 71% of those surveyed said they enjoy private healthcare coverage, through their employer, while 86% receive pension contributions.
While the report’s data is helpful to those working in the family office sector — as was the intention — Westall points out that those considering its findings mustn’t forget one thing: “Family offices are all different, and variation [between the various family offices] are common.”
In compiling the data used in the report, entitled Family Office Compensation Benchmark Report 2016, Agreus compiled responses from employees of more than 200 UK family offices, making use of anonymous online surveys and interviews.
Westall says it may be the largest survey of employees working in single family offices to date, since the market has not yet been the subject of much research.
To see and download a copy of the report, click here.