What else is needed?
Wealth management firms are also sweetening the pot for benefits, bonuses, performance incentives and profit sharing plans.

And equity is becoming table stakes to attract top talent.

“Firms who want the best candidates have to offer ownership,” said industry consultant Jamie McLaughlin. “That’s been the big change. Field studies have shown that equity is a cultural determinant at high performing firms.”

Family offices are increasingly offering long-term incentive compensation and co-investing opportunities with lines of credit as recruiting and retention tools, according to executive recruiter Linda Mack.

“It’s an extraordinarily competitive market, and family offices are bidding up their offers,” Mack said.

Just over half of all single family offices are using long-term incentive, or LTI, compensation vehicles, as do more than 80 per cent of SFOs with $5 billion or more in assets, according to the Morgan Stanley report.

Deferred incentive compensation, based on longer-term performance which is vested over time and paid out in the future, is by far the most popular LTI plan used by family offices. 

Co-investment opportunities that allow executives to invest with the family through loans, some of which don’t have to be repaid, are also popular, as are carried interest plans, which provide executives with a share of investment profits in excess of a specified return, typically in direct and alternative investments such as private equity or real estate.

Beyond the money
While compensation is the starting point for recruiting talent, wealth management firms say job candidates ask the most questions about career progression, company culture and job satisfaction.

“Wealth management talent knows they’ll be paid well,” said Grant Rawdin, president of Wescott Financial Advisory Group in Philadelphia. “What they’re really interested in is career satisfaction. We make sure to have candidates talk to people at the firm who have been on the same career path.”

Job candidates at Pitcairn, “ask way more about work-life balance than cash compensation,” said Andrew Busser, president of the family office in suburban Philadelphia. “Employees also want to see that the firm is investing in them and their career development. We’ve set up an apprenticeship model which is augmented by more formal training.”

WE Family Offices has a B Corp Certification, meaning that it has to demonstrate high social and environmental performance as well as accountability, and transparency in areas including corporate governance, employee benefits and charitable giving.

That designation is a signal to wealth managers that WE “thinks about talent differently,” and helps attract NextGen advisors in their 20s and 30s to the firm, said Michael Zeuner, WE managing principal.

“Successful talent management in this environment takes process, management and dedicated resources,” Zeuner said. “This stretches from recruiting, to onboarding to ongoing career management.” One of WE’s partners, he added, has been designated to oversee career development throughout the firm.