How Family Offices Measure Success

By Paul Westall, Contributor

Success by its very definition is the the accomplishment of an aim or a purpose but what particular ambitions or goals do Family Offices set out to achieve and how do they rate their achievements?

As part of the Family Office Survey of the Year, Agreus asked Family Offices and the professionals they employ how they measure success. Was it the harmony of the family or the happiness of the Principal? Was it return investment or impact-driven reward? Was it driven by the family or the finances?

Emma Raducanu, the reigning US Open Champion and the freshest face of success. (Photo by Elsa/Getty Images) Getty Images

With Family Offices sitting behind the world’s most successful individuals and organisations, the key to their success could just change the structure and success of your organisation forever and unsurprisingly it all starts with return on investment.

For almost half of Family Offices, perfection sits within a healthy return of investment with 45% of Family Offices stating this is their number one measure of success. In second place is client satisfaction (30%) followed by 12% who say employee satisfaction is their key measure, 8% who claim its social impact and 5% who say their success is defined by the achievement of specific Family Office goals.

While success is defined by return on investment, positive client interactions and employee happiness, how is it measured?

55% of Family Offices take a whole-of-fund approach, measuring the performance of their fund exclusively while 36% measure the performance of their people. Astonishingly, 9% do not measure the performance of either and instead focus purely on the achievement of multiple goals at the end of each year.

With more than a third of Family Offices placing people as their key performance indicator for success, we thought we would detail some of their key benchmarks and of course, how they are compensated when ‘success’ is eventually attained.

Starting with Investment Professionals and according to the Agreus Bonus Benchmark Report, they are given an ROI benchmark 43% of the time which typically sits between 4% and 6%. 33% of these benchmarks are based on indexes which 57% of the time are based on a combination of indexes for different asset classes. The result of meeting this return on investment target and hitting success is met with a performance bonus more than 85% of the time, typically in the region of 31% - 75% of annual salary. For some top-performing Chief Investment Officers, this can equate to more than £300,000.

While Investment Professionals have plenty of quantitative data to go by, other professionals within the Family Office do not and most often receive a discretionary bonus for hitting tangible and intangible targets set out for success. For Accounting and Finance professionals this could be cutting costs or avoiding interest-incurring payment delays but for support and operational staff, the formula could be stakeholder engagement, diary management and relationship management. While this might not sound as exciting as ROI, it doesn’t stop Finance and Operational Professionals receiving a performance bonus 66% and 85% of the time, respectively.

Success may be defined by the accomplishment of goals which will differ from organisation to organisation but it seems it has a universal formula which starts with a return as any business must, but also include people both internally and externally. It must also focus on values, purpose and impact and above all, be shared with the professionals who helped to achieve it.

In short, great people plus return on investment equals success. What do you define as success and how do you achieve it?


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