GUEST COMMENT: Family offices are the future

What with stricken hedge funds and uncertainties surrounding even the most established private banks, the richest of the rich are increasingly forming their very own offices.

Working for a family office has its advantages. Families make their own rules and look to recruit only the crème de la crème of talent. The aim is typically to protect and create greater fortune for their family progeny. Succession planning is high on the agenda above. Ensuring their wealth endures the next generation, and beyond, is of primary concern.

While most private banks are interested in hiring bankers who can bring transferable assets, the principal interest of family offices is therefore in hiring individuals with specialised knowledge of investment strategies and financial products.

If you want to work in a family office, it will also help if you are able to introduce one wealthy family to another. Family offices are extremely costly to set up and multi-family structures are increasingly popular. If you are able to 'bolt-on' other families' wealth to be managed centrally, it will certainly make you a more appealing hire.

Taking a multi-family office across geographical borders (as seen in the US and Europe) also requires local expertise in new markets. The service model must be able to navigate multiple currencies, jurisdictions and regulations. Geographical location therefore has a big pull on the purse strings, particularly in small independent states such as Monaco and Liechtenstein where taxation is low but the cost of living is high. Many families will be looking for individuals with the right regional experience.

For talented investors who match this criteria, family offices will increasingly be the place to be. Although many families are risk averse, regulation is minimal and although pay may disappoint former hedge fund managers, it can be comparable with private banks.