Take Action Now: Advocate Against Policies & Excessive Regulation

by Linda Mack
Founder and President
Mack International

Frequently Asked Questions Posed to this C-Suite Executive Search and Family Office Consulting Firm

 

We are building a family office. Where do I start and whom do I hire first?

The most important thing is to begin by asking yourself some questions. For what generation is the office being built? What clients will it serve? What scope of services will be provided? Which of these services will be insourced vs. outsourced?

Often it is best to start slowly by thoughtfully creating your long term plan before taking action. An analogy most can identify with is building a house. You would never begin by turning over dirt and putting up a frame before hiring an architect to develop a total plan. Without a foundation—literally and figuratively—the “house” will collapse. It’s unfortunate to be forced to dismantle and start over when a little patience and planning could have prevented the fall.
In terms of hiring, you’ll need an “expert generalist” leading the office who has the knowledge of the full spectrum of disciplines to help successfully accomplish your objectives.

Years ago the majority of services were delivered from the Family Office. Today, you can essentially outsource everything if you have the right Expert Generalist (EG) leading the organization with an executive assistant and an accounting professional. Who is this “EG”? It is a man or woman who has knowledge of the full spectrum of wealth management disciplines. These include but are not limited to tax, accounting, philanthropy, investments, and estate planning with an understanding of the interconnectivity between them—and how each relates to every decision across the entire horizontal spectrum. He or she must have peripheral vision in all functional areas and have the ability to anticipate repercussions of how decisions made in one area will affect the others. Keeping everything in sync and optimized is a true balancing act.

In addition, they will need to coordinate all outside advisors and providers to be sure their efforts are in harmony. These advisors, while specialists in their own discipline, are not inherently acquainted with other expert’s efforts on the Family Office’s behalf. The EG must see deeply into each vertical to know when advisors must coordinate with one another to successfully accomplish objectives.

Start by clarifying your vision. Then proceed thoughtfully with caution. Hiring an exceptional “EG” and establishing a solid foundation of processes, procedures and protocols is paramount. Then you can make the decision on what to insource vs. outsource keeping long term objectives top of mind. The most successful Family Enterprises build a professional services business providing a clear value proposition, resonating so strongly and positively with family clients that they “choose” to do business with the family office.

What is the main reason recruiting efforts fail?

Successfully attracting and retaining the right leadership talent is critical to the Family Office achieving their long-term goals and strengthening family stability. However, in the absence of a proven process, and an awareness of desired characteristics many recruiting efforts fail. The top two reasons a new hire will “fail to launch” include:

  • The Family Office finds someone they like and trust, but the individual hired does not have the requisite skills and competencies to be successful in the position because the job was not clearly defined in the context of 10-15 years. ( the term most offices are seeking with their executives)
  • The Family Office hires a “rock star” from another enterprise in terms of the requisite skills but fails because they are not the right “culture fit” While the majority of offices are looking for someone with a particular skill set and experience, in fact, culture fit within the family is paramount for success.

Who should serve on a search committee?

The importance of next generation involvement on family boards and committees cannot be overstated. Rising generations are the future and a key component of succession planning. As transitions occur or circumstances change, an effective succession plan must be reviewed and adapted to ensure it continues to meet each family’s unique needs over time. There are several strategies to consider that encourage next gen engagement. But for the issue of recruiting the ideal prospective executive, it is helpful to understand context from the point of view of the candidate. It is a serious decision for them as well as the family.

If the candidate is greeted by a committee of 75 year olds, they will wonder about who is in line to follow the established members and why no one of their generation is represented. They are evaluating sustainability, and who might be responsible for future mandates and their performance. If they don’t see orderly governance, and anticipated transitions to next gens, it might not breed confidence in their future with a particular Family Office. It is incumbent on the Family Office Board and search committee to have an ongoing process identifying and engaging rising generations in search and other committees and positions of responsibility and provide mentorship and development to support them in future roles of governance and leadership.

How do I design a proper compensation plan for my executive leaders?

Compensation is a hot topic at every Family Office forum and event. The right compensation package can immediately impact the successful achievement of goals and objectives for the family. The wrong one will often result in losing key leaders. Be diligent about how you go about benchmarking and getting valid market data. It is critically important to base compensation on job content, not title. We strongly advise families to hire a specialized consultant to advise them. A number of our families have worked with Trish Botoff of Botoff Consulting and consider her an expert in Family Office compensation helping families structure packages benefiting both the Family Office and prospective candidate. This goes a long way to demonstrate confidence and fairness in negotiating for both parties.

About Mack International LLC
Mack International is the premier boutique retained executive search and strategic management/human capital consulting firm serving national and international clients in the family office, family business enterprise and the wealth management industries on a national and international basis. Founded in 2002, the firm has achieved an exceptional track record of success as evidenced by its unmatched industry expertise, in-depth market knowledge and unparalleled track record of success. Founder and President, Linda C. Mack has established proprietary methodologies such as the Mack 360© and is credited for having coined the term “expert generalist” in the industry.

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The need for fact-based reporting of issues important to multi generational businesses and protecting a lifetime of savings has never been greater. Now more than ever, multi generational businesses and family businesses are under fire. That's why Family Enterprise USA is passionately working to increase the awareness of issues important to generationally-owned family businesses built on hard work, while continuing to strengthen our presence on Capitol Hill. The issues we fight for or against with Congress in Washington DC include high income tax rates, possible elimination of valuation discounts, increase in capital gains tax, enactment of a wealth tax, and the continued burden of the gift tax, estate tax and generation skipping tax.


Family Enterprise USA promotes generationally owned family business creation, growth, viability, and sustainability by advocating for family businesses and their lifetime of savings with Congress in Washington DC.  Since 2007, Family Enterprise USA has represented and celebrated all sizes, professions and industries of family-owned enterprises and multi-generational employers. It is a bi-partisan 501.c3 organization. Family foundations can donate.


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