Competition for talent raises salaries in family offices and on Wall Street

Welcome to Extreme Investor Network, your go-to source for all things related to high-net-worth investing and consumer trends. Today, we are diving into the world of family offices and the rising costs associated with operating them.

According to the J.P. Morgan Private Bank Global Family Office Report, the average family office now costs over $3 million a year to run, with some spending upwards of $10 million annually. The increase in expenses is driven by a growing competition for talent, as family offices expand in size and number to compete with private equity, hedge funds, and venture capital firms.

With staffing costs being the biggest expense, family offices are facing challenges in attracting and retaining top talent. As the number of family offices has tripled over the past five years, competition for senior talent has intensified, driving up salaries and benefits.

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Additionally, family offices are increasingly investing in alternative assets, such as private equity, venture capital, and real estate. This shift in investment strategy has put them in direct competition with larger firms for talent and deal opportunities, further driving up operating costs.

To stay competitive, family offices are offering more competitive compensation packages, including long-term incentive plans and profit-sharing opportunities. Chief Investment Officers at family offices with over $10 billion in assets can expect to earn close to $2 million in compensation, showcasing the lucrative nature of roles within family offices.

As family offices continue to evolve and professionalize, they are becoming more attractive places to work for finance professionals. With better pay, access to wealthy individuals, and the opportunity to have a significant impact, family offices are no longer seen as a place for retirement, but rather as a dynamic and challenging environment.

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