Private bankers and analysts preferred by family offices

Mike Taylor

Managing Editor/Publisher, Financial Newswire

23 August 2023

The number of family offices in Australia has doubled over the past decade and it is ex-private bankers or former investment analysts who have taken the inside running in servicing what represent highly lucrative clients, according to new research from KPMG.

What the KPMG research reveals is that chief executives of family offices are being paid between $396,000 and $500,000 a year while chief financial officers are being paid between $330,000 and $396,000.

The KPMG Australian Family Office Compensation Benchmark Report has revealed a sector which is providing compensation to its employees competitive with international standards.

The report said that, as a business model, the family office is now recognised by suppliers of services and consumers (the founders and their families) alike.

It also said that professionals were being attracted to work for family offices because they have “less bureaucratic processes or the opportunity to generate financial returns they can share by way of access to long-term incentives such as carried interests”.

“In Australia, they largely remain small employers, with fewer than 30% of family offices employing more than 10 people. Globally, an average of 23% of survey respondents reported having five employees or less. In the Australian cohort, this figure was 50%,” the survey analysis said.

The analysis said that the number of employees involved in family offices was anywhere between 10,000 and 20,000 in Australia and this was well over double the number of employees 10 years ago.

KPMG Head of Family Business, Robyn Langford said single family offices continued to operate in relative isolation and there was no public list nor requirement to register as a distinct financial services entity.

She said that the structure of the family offices was increasing in sophistication as they evolved with over 50% having assets under management (AUM) of $1 million to $500 million, and 58% having formal governance procedures in place.

The KPMG survey said that all the chief executives of the family offices survey were university educated and nearly 40% had postgraduate qualification.

“Over 30% have an investment management background, presumably directly related to the predominant purpose of the family office, if one has been enunciated,” it said.