Managing Director/CEO
- Overview
The Role of a Managing Director/CEO
A Managing Director combines the internal capabilities of the family office with the use of external advisors to tackle a wide range of business and personal financial matters on behalf of its principal(s), all while balancing and promoting the family’s values and objectives for their estate.
A Managing Director acts as the primary point of contact to provide advice, services and resources to family members and is responsible for engaging with principals on a personal level, building trust and tailoring advice to each family member’s needs and abilities. Other areas of oversight include finance/accounting, operations, administration/HR, governance, estate planning, education and advisory services.
A successful Managing Director balances meeting their client’s expectations with being a proven leader and manager to their team. He or she is the face of the family office and acts with the utmost professionalism and discretion at all times.
- The Role Defined
Job Description
EDUCATION / EXPERIENCE
A Managing Director possesses a Bachelor’s (B.S. or B.A.), and will often have a Master’s (M.S. or M.B.A.) or Juris Doctor (J.D.) degree as well – frequently but not always in finance, accounting, business, administration, law or a related field.
An experienced Managing Director/CEO will have 10-15 years’ experience in private wealth, family office, public accounting, investing or estate planning. This position often requires significant managerial responsibility, and as such, a candidate’s professional experience should demonstrate clear leadership experience.
SKILLS
- Experience leading and managing a team with diverse backgrounds and expertise, providing consistent feedback and systematically evaluating performance
- Expertise in estate planning, including personal financial planning, high-net-worth tax strategies and operating a private foundation
- Proficient in creating and analyzing financial models, preparing financial statements, and understanding business and legal implications as they affect a client’s estate, investments, philanthropies or businesses
- Experience developing and implementing strategic plans and initiatives for a family office (e.g. succession planning, risk management and philanthropy)
- Prior success leading asset-specific projects & related work in due diligence, reporting and compliance
- Communication skills to build and maintain relationships with external advisors, service providers and industry peers
- Strong quantitative skills, including proficiency with Excel, QuickBooks or other accounting/financial systems
CERTIFICATIONS / TRAINING
Professional certification requirements for a Managing Director/CEO depend on a family office’s investing activity and finance/accounting/tax operations. Principals may prefer candidates with any of the following (or similar) certifications:
- Certified Financial Planner (CFP)
- Certified Public Accountant (CPA)
- Certified Estate Planning Law Specialist (CEPLS)
- Chartered Financial Analyst (CFA)
- Certified Private Wealth Advisor (CPWA)
- Certified Family Wealth Advisor (CFWA)
- Certified Trust and Financial Advisor (CTFA)
- Certified Investment Management Analyst (CIMA)
RESPONSIBILITIES
A Managing Director’s responsibilities vary greatly based on the size and scope of a family office’s activities. For example, an office that invests primarily in real estate may routinely interface with property management/real estate personnel, whereas a family office with significant assets in art or collectibles may spend substantial time acquiring, handling, insuring and appraising such assets. Common duties for a Managing Director/CEO include:
- Overseeing the financial, legal, operational and administrative aspects of the family office, including accounting, tax coordination and planning, estate planning and implementation, financial management and business consulting
- Managing the family’s assets, such as investment accounts, properties, trusts and other interests, and ensuring compliance with all relevant laws, regulations and policies
- Leading and managing the overall strategy, vision, and direction of the family office, in alignment with the family’s core values and ethical standards
- Developing and maintaining relationships with family members, advisors, partners, vendors and other stakeholders, and negotiating, reviewing and signing contracts on behalf of the family office
- Liaising with external advisors such as lawyers, trustees, accountants and real estate brokers to execute the family’s strategies and initiatives
- Preparing and overseeing financial statements, tax returns and portfolio reports, as well as budgeting and cash flow management
- Overseeing accounts payable, tax preparation and payroll/benefits administration processes
- Participating in meetings with and for the principal to allow for appropriate follow-up
- Preparing an annual client service plan and managing its execution
- Overseeing the family’s strategies in activism and/or philanthropy
- Leading and managing staff and consultants, setting direction, holding regular meetings and providing consistent performance feedback
- Attending networking and marketing events as a representative of the family office
ATTRIBUTES
A Managing Director has the discretion to act on behalf of their client, which requires that the person in this role is fully aligned with the family on their strategic goals and vision for their family office. Characteristics of a successful Managing Director include:
Natural leadership
A Managing Director should possess skills in leading, managing and mentoring subordinates across the various departments of a family office. He or she should have a deep understanding of each supporting role and be able to inspire management and staff to work towards a common goal – demonstrating soft skills such as listening, empathy, patience, creativity and dependability.
Communication
A Managing Director should be an excellent communicator who can effectively convey complex information to different audiences. He or she should be proactive in seeking and providing feedback to staff and be responsive to their needs and concerns.
Decision-making
A Managing Director should have sound decision-making skills that balance the interests of the family and business, while minimizing uncertainty and risk. He or she should also be able to make timely decisions that consider changing circumstances and priorities.
Strategic thinking
A Managing Director should have a clear vision and strategy for the family office that aligns with the family’s values, goals and expectations. He or she should be able to execute this strategy with efficiency and effectiveness, while taking into account market opportunities and challenges.
Organizational skills
A Managing Director should have exceptional organizational skills that enable him or her to manage complex and diverse activities, such as finance and investment management, legal and tax affairs, philanthropy and family governance, while ensuring that all aspects of a project are thoroughly planned and executed.
Financial management
A Managing Director is accountable for the financial performance and reporting of the family office, as well as ensuring compliance with relevant laws and regulations. He or she should have a solid financial acumen, as well as analytical skills that support the ability to make sound financial decisions and manage risk.
Industry knowledge
A Managing Director should have comprehensive knowledge of the industries and markets that the family office operates or invests in, as well as an awareness of new opportunities and risks. He or she should be able to leverage industry insights and best practices to enhance the family office’s performance and reputation.
Responsibility and integrity
A Managing Director should always act responsibly and ethically in representing the interests of the family, as well as any other operative interests. He or she should always uphold high standards of honesty and transparency when dealing with internal and external parties.
COMPENSATION
There are many factors that affect a Managing Director/CEO’s total compensation — too many to cover in this summary. CEO compensation packages range anywhere from around $250,000 to well over $1,000,000. We’ll discuss these factors and various approaches to structuring a CEO’s compensation package based on your unique needs during our consultation process. Components of a CEO’s compensation include:
Base salary
A fixed annual amount received for performing duties as agreed upon at the time of hiring. A CEO’s base salary varies depending on a principal’s AUM, type of investing activity, family office staff present, as well as the overall experience and qualifications of the employee.
Discretionary Bonus
Discretionary bonuses are variable amounts that are paid annually, based on an individual’s performance. The percentage of compensation paid as a salary versus a bonus is entirely up to the employer, but for CEO’s, a discretionary bonus can account for anywhere between 15 – 50% of the CEO’s total compensation. The most common reason for a higher bonus percentage (relative to salary) is to tie the employee’s compensation to their overall performance. It also allows an employer to set strategic goals during the employee’s annual performance evaluation, with the pay out of their bonus linked to the completion of stated goals.
Carried Interest
Carried interest is a common fund/wealth management reward structure, wherein executives receive a specific percentage of net gain in investment returns in portfolios above a hurdle rate or cost of capital. Carried interest may be applied to an entire portfolio or to specific investments. This incentive is typically restricted to the CEO, CIO and senior investment management staff in a family office, where current AUM exceeds $200M. Percent carry varies from 1% all the way up to 20%, depending on the size of the family office.
Equity
With equity compensation, a portion of the employee’s compensation is paid in options, restricted stock or performance shares, which represents ownership in a business or fund owned or managed by the principal. Options can have a vesting period and/or expiration date, which affects their overall value. Equity compensation strongly incentivizes long-term employment and can be a great tool for building a team that is dedicated, loyal and aligned with the overall vision of the principal/family office.
Co-investment
The opportunity to invest alongside the family office in various deals or projects that are sourced or executed by the family office. Co-investment opportunities can allow a CEO to benefit from favorable investing terms, access to exclusive deals or higher returns. Co-investment terms may or may not require a CEO to commit a portion of their compensation directly to family office investments, to ensure that both parties share in the risk and/or potential profit of an investment.
STANDARD BENEFITS
Managing Directors at a family office typically receive the following corporate-style benefits:
Medical, dental and vision
Standard health benefits help employees stay healthy, reduce absenteeism and ultimately increase productivity.
Retirement savings account
401k, thrift savings plan or simple IRA, especially with employer matched contributions, shows your employees your commitment to their future.
Paid time off
PTO allows your employees to take time off from work for various reasons, such as vacation, sickness, personal matters or holidays.
Travel/miscellaneous expenses
Expenses incurred when travelling or conducting business on behalf of the office, including transportation, accommodations, meals and other costs related to business travel. These expenses may be reimbursed or covered by a travel allowance or budget.
OTHER BENEFITS / "PERKS"
Additional benefits are often included to enhance the attractiveness of an employment offer, as well as encouraging long-term employment. Such benefits include:
Education
- Tuition reimbursement, scholarships/savings plans for those with college-aged children
Professional development
- Encouraging and covering an employee’s participation in training courses, workshops, seminars, conferences or professional certifications
Health and wellness
- Healthy food, beverages or snacks offered at the office
- Paid or discounted gym memberships or fitness classes
- Access to wellness programs with counseling services, health screenings, substance abuse treatment, etc.
- Life and disability insurance
Employee assistance
- Financial counseling
- Legal advice
- Transportation reimbursement or allowance
Charity
- Volunteer opportunities
- PTO days for community service
- Charitable match program
Family benefits
- On-site childcare or childcare reimbursements
- Parental and family medical leave
Workplace
- Remote work/flexible hours
- Casual work attire
- Employee recognition programs, awards or rewards
REPORT STRUCTURE
As the head of the family office, a Managing Director reports directly to the principal(s). In some situations, a Managing Director may instead report to an executive at a business owned or managed by the principal (at least formally, so that duties such as annual performance reviews or compensation matters are handled by someone else).
The Managing Director directly or indirectly manages all other staff in the family office, including:
- Administration staff
- Finance/Investment staff
- Operations staff
- Legal staff
- Estate management staff
Leading Your Family's Future
A Managing Director or CEO within a family office plays a pivotal role in ensuring the efficient management of family assets and operations. They are responsible for overseeing the financial and operational activities, making critical decisions that drive the long-term success of the family’s estate. The role includes directing day-to-day management, setting financial goals, and providing strategic advice to family members.
Ready to take your family’s financial management to the next level? Let us help you find a Managing Director/CEO who will oversee your family office with strategic precision and ensure the longevity of your wealth.
Adam Cook
Managing Director, Old State Staffing
- Strategic Oversight
Visionary Leadership For Your Family
Why You Should Consider a Managing Director/CEO
A Managing Director/CEO ensures that your family’s wealth and operations are managed efficiently and effectively. They oversee the family office, setting long-term financial strategies while providing leadership and guidance to the team. A Managing Director/CEO can help you:
- Coordinate and oversee day-to-day operations within the family office
- Ensure all financial activities and investments align with your family’s goals
- Provide leadership and strategic direction for the family’s wealth
- Advise family members on key financial decisions and initiatives
- Maintain financial stability and long-term growth for the family’s estate
By hiring a Managing Director/CEO, you’ll bring strategic leadership to your finances, ensuring your assets are managed effectively while safeguarding your family’s legacy for generations to come.
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