The role of the Chief Financial Officer in family offices has become more complex and consequential. Far beyond traditional financial oversight, today’s CFO is a strategic partner, tasked with preserving and growing multi-generational family wealth and legacies. While the specific needs of each family office will vary, we’ve observed several key characteristics that are consistently prioritized in the search for today’s ideal CFO.
With more than three decades of experience advising family offices, our team has witnessed a clear and growing shift: the demand for strategic CFOs is accelerating. This trend is particularly pronounced in family offices, whether newly formed or well-established, as they look to increase their assets, prepare for succession, or elevate their operational capabilities.
The Evolving Role of the Family Office CFO
The modern family office CFO must combine deep technical expertise with a nuanced understanding of the interpersonal dynamics unique to family environments. Identifying the right leader for this multifaceted role is no longer just about financial acumen—it’s about finding someone who can navigate complexity, provide long-term strategic vision, and build trust across family generations. From managing intricate investments, tax strategies, and regulatory compliance, a skilled CFO provides centralized oversight to reduce risk and ensure transparency.
Their impact is particularly significant during succession planning, where wealth transfer brings challenges like tax optimization and family governance. CFOs design strategies that preserve both assets and family values, while also guiding philanthropic efforts to align financial resources with legacy goals. By educating family members and simplifying complex financial matters, CFOs foster harmony and create governance structures that sustain long-term wealth.
As family offices embrace digital transformation, CFOs are now leading the adoption of new technologies, including AI, to streamline operations and enhance decision-making. Leveraging data analytics, they uncover trends, optimize portfolios, and strengthen cybersecurity, ensuring families remain competitive and secure in an ever-evolving financial environment.
What to Look for When Recruiting a Family Office CFO
Selecting a CFO is not about identifying a jack-of-all-trades but a professional whose expertise aligns with the specific needs and vision for the office. While technical proficiency in areas like financial planning, asset management, and compliance is a must, the most successful candidates also bring strategic vision and emotional intelligence to the table. The endgame is finding someone that will have the unwavering trust of the family. This is easy to say, but often difficult to achieve. However, we have found there are five core competencies that most family offices prioritize when evaluating and selecting their next CFO.
1. Cultural Fit: A family office CFO must align with the family’s values and integrate seamlessly into its culture. Unlike corporate settings, where professional detachment often prevails, family offices demand a high degree of trust and alignment with their unique ethos. A CFO must be able to build relationships based on discretion, respect, and a shared vision.
2. Strategic Vision: The ideal candidate combines technical proficiency with strategic foresight. Whether managing global investments, navigating complex tax structures, or leading ESG initiatives, a forward-thinking CFO adds significant value by aligning financial strategies with long-term family objectives.
3. Adaptability: Given the evolving nature of family dynamics and financial markets, a successful CFO must exhibit agility and a willingness to embrace change. This includes staying ahead of regulatory shifts, adapting to new investment opportunities, and guiding the family through transitions such as leadership succession or market volatility. We have seen many successful family offices transition into full-blown asset managers. So, it is important for them to think about what is needed today but with an eye towards the future. By fostering a culture of continuous learning and improvement, CFOs can ensure that the family office stays ahead of the curve.
4. Interpersonal Skills: As the liaison between family members and external advisors, a CFO must communicate effectively across varied audiences. They should be adept at simplifying complex financial concepts for non-experts and facilitating open dialogue within the family.
5. Technological Expertise: In an era of rapid digital transformation, a tech-savvy CFO is invaluable. From streamlining operations with advanced systems to implementing robust cybersecurity measures, technology-driven innovation enhances efficiency and protects sensitive financial data. An experienced CFO who can leverage analytics and models for better decision-making is paramount.
How to Evaluate Candidates for the Role
Identifying and evaluating CFO candidates has become increasingly complex. While some family offices try to utilize their referral networks to find the right CFO, they are frequently unsuccessful when they haven’t created a “success profile” for how the role will help operationalize the vision of the office. As each family office is unique, a great CFO at one family office does not guarantee success at another.
We have found that families should prioritize a rigorous alignment, identification, and evaluation process that includes craft demos, scenario-based assessments, and in-depth interviews. For example, asking candidates to describe their experience with intergenerational wealth transfer or resolving family conflicts can reveal critical insights into their problem-solving abilities and interpersonal skills. Additionally, any formal and back-channel references should be scrutinized to ensure alignment with the family’s expectations for discretion and integrity. Given the sensitive nature of the role, a successful hire must inspire unwavering trust.
With decades of experience advising family offices, RSR Partners is uniquely positioned to help families navigate the complexities of this critical decision. Our specialized team understands that the perfect CFO is not a one-size-fits-all solution but a tailored match for your family’s unique needs and aspirations. We go beyond traditional recruitment by conducting a comprehensive assessment of your family office’s requirements. From understanding your family’s values and financial objectives to identifying the technical and interpersonal attributes necessary for success, our proven approach ensures that we deliver candidates who excel both professionally and culturally. Our experience, reputation, and existing network allow us to get the “real scoop” and back-channel references on almost any candidate.
If your family office is on this journey, we can help you identify a strategic CFO who will act as a catalyst for intergenerational wealth preservation and growth for the future.
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Brett Stephens, Lindsay Griesmeyer, Maryann Bovich and Ed Fowler are members of the Family Office practice at RSR Partners. RSR Partners is a boutique professional services firm headquartered in Greenwich, CT, that specializes in helping Boards and CEOs with their most critical recruiting, selection, and succession needs. The firm was founded in 1993 by industry icon Russell S. Reynolds, Jr. The firm has conducted thousands of projects for Boards and CEOs at public, private equity-backed, and family-owned businesses across a range of industries including asset management, consumer goods and services, industrial, technology, and healthcare.
Much has been written about millennials – individuals born between 1982 and 2004 – who are having a powerful, and sometimes disruptive, impact on organizations, both public and private. Summarizing current research, millennials are:
On its face, this profile suggests possible tensions with the stereotypical view of the family office as simply a vehicle to pass along both family wealth and the traditions of its creators. It also raises critical questions: Will different generations clash over an understanding of what a positive future looks like? Will they clash over how the family’s assets, financial and other, should be managed? Increasingly, family office leaders are expressing frustration over their inability to capture the attention and commitment of millennials. Not surprisingly, reigning leaders in family offices believe that when the baton is passed to the next generation, they will not value or understand the full benefits of collective management of a family’s legacy and wealth. This is no small matter when looking at the size and scope of the intergenerational wealth transfer expected to take place in the decades ahead.
According to a recent article in Trust and Estates, millennials have surpassed baby boomers as the largest segment of the population. In the coming years, they will inherit more than $30 trillion.
It is a time-honored tradition for family offices to adjust their working model to meet the preferences of succeeding generations. But will simple tweaks sufficiently address the needs of this disruptive generation and the massive wealth transfer that lies ahead?
Evidence suggests that radical changes are needed to integrate the millennials into the fabric of the family office.
Today’s family office leaders are refining and reinventing their management strategies to fashion a high-performing office that can serve all generational needs and expectations. At the risk of generalizing about an industry that is well known for the unique structure of each office, three essential strategies have emerged from our research.
Strengthen Your Governance Policies
Reinforce the values that are unique to your family
Millennials appear to be more sophisticated about financial matters than prior generations, are skeptical of authority, and are impatient with dysfunction. This generation values governance structures that facilitate efficient and informed decision-making and candid dialog. Thus, it is essential for family offices to define the roles and responsibilities of each office executive and the charter for each committee. Who, within the family or among outside advisors, has control of which assets, and who has the authority to change existing arrangements?
If a family governance process has been clarified to answer these questions and to address issues of control and money, this will serve as a means by which problems can be resolved before they become destructive. Make succession plans clear and establish expectations around when the younger generation might begin to assume a leadership role. Develop a budget and business plan for the office. Empower millennials as early as possible and assign them a project for which they will be held accountable. Engage them early and often. While millennial loyalty to institutions can be low, research suggests that they are more inclined to be loyal to individuals. If authentic relationships are developed between family members and office leadership through this work, a higher level of trust will ultimately form between generations.
For an office to survive multiple generations, the family must have intention, focus, and clarity about its values. John Davis, founder of the Cambridge Institute for Family Enterprise, is a strong believer in families taking the time to reflect on their purpose, characteristics, needs, and aspirations in order to define their overall mission.
With a mission in hand and a strategy established to achieve specific goals, succeeding generations will have a road map in place to survive leadership transitions.
This begs the question – what happens when the millennials challenge the underlying family values and mission? Industry guru James E. Hughes Jr. has identified a consistent thread among hundreds of international families who have successfully transitioned a family enterprise through multiple generations. These families have pivoted their focus from simply building a great business to building a mission-directed family that reflects the goals of the group. In so doing, they often come to recognize that the value of the family’s human capital is equal to or even greater than the value of their financial assets. To strengthen the bond, it might be useful to reflect on the “family glue” from time to time via candid dialog facilitated by an outside consultant. We highly recommend reading The Voice of the Rising Generation by James E. Hughes Jr., Susan Massenzio, and Keith Walker, where these ideas are explored more fully.
Embrace Transparency
Using technology and new forms of communication
Privacy has historically been the cornerstone of the family office, and families have typically been conservative about the information they provide to the younger generation. Millennials are disrupting this tradition. They share life experiences on Facebook, Instagram, Twitter, TikTok, and Snapchat etc. This poses risks for the families as reputations can be damaged and security concerns arise when millennials are careless about broadly exposing what they do with their lives.
The office head needs to accept the reality of social media and coach the younger family members on how to coach the younger generation to not share private information and to minimize security risk.
This generation can be impatient; they don’t like to wait. This phenomenon is frankly a good thing; offices have accelerated the implementation of technology upgrades to provide financial data on demand. Millennials are avid networkers and attend conferences to communicate with other offices in the quest for “best practices.” They are virtual learners and like to teach each other. Because millennials have shorter attention spans, family office leaders must integrate new forms of communication such as diagrams, texts, white boards, dashboards, and summary documents, in order to achieve the desired impact. Forget long meetings, white papers, group conference calls, or thick legal documents. Consultants to families report that millennials prefer to receive information via podcast, allowing them to listen and learn when they choose, rather than the imposition of a meeting or conference call.
In keeping with the tendency of millennials to be transparent about their life activities on social media, this generation wants transparency from the family about its wealth and how it will impact their lives. They want to be brought “under the tent” at a younger age.
A challenge facing many families is whether younger members have the maturity to handle this information and when is the right time for them to take an active role. Additionally, as millennials are armed with more information about best practices at other offices, they may question whether the family office team is delivering top quality advice and performance. The stakes are high for family office leaders to demonstrate the worthiness of an independent office versus allocating family assets to institutional wealth managers.
Understand the Quest for Impact
Learning how millennials view the world
The millennial generation is optimistic about the future and believes that individuals can make a difference – to have social, environmental, and even financial impact on their world. But if you happen to be a millennial in the shadow of a “larger-than-life” patriarch, it can be a challenge to find your role to make that difference.
The Voice of the Rising Generation addresses this subject both thoroughly and thoughtfully. How can succeeding generations find their “voice” and how can they lead meaningful lives? The authors encourage each family member to define his or her dreams, gain self-knowledge, and develop resilience and independence.
Many who head offices recognize that empowering a succeeding generation is a life-long journey, and they devote a fair amount of time counseling younger family members on their social and emotional well-being. Some of the largest and most mature offices have created a new full-time position in the office, a Life Long Learning Specialist. The goal is to empower each family member, through shared learning experiences, to make an impact with the tools that are uniquely his or hers. The curriculum goes well beyond financial literacy.
Millennials like to participate in direct private equity or venture investments rather than the more typical investment program where assets are allocated to third party mangers. To be directly involved in crunching the numbers, preparing spreadsheets, and researching industry trends, they feel they will have more impact on the success of the investment. Increasingly, they are involved in launching new entrepreneurial ventures in virtually every segment of the economy. Since millennials love social media and collaboration, it is not a surprise that they have led the growth of crowdfunding, a vehicle for peer-to-peer investment collaboration. Lastly, millennials are strongly behind the growth of social impact investing, where investments are evaluated through environmental, social, and governance lenses, better known as ESG. Such investments aim to achieve both financial returns as well as having a positive impact on society.
Private family foundations are useful tools to help keep families together and actualize their shared mission. In fact, making an impact through charitable giving is every bit as important today as it has been in previous generations.
However, millennials approach charitable giving in ways that differ from their parents. In general, volunteering or “doing the work,” feels more satisfying to them than writing a check. Another defining millennial behavior is the desire to touch as many people as possible and to hold charities accountable for their promises. An observation made by an executive of the Silicon Valley Community Foundation that was reported in the the Journal of Philanthropy (9/14,2017) succinctly makes this point: “They want to know impact, scale, how many, and how come. They’re engaged to an extent that people of my generation find uncomfortable.”
In Conclusion
The three strategies discussed above are designed to help family offices achieve the ultimate goal, which is to build trust with a generation that inherently questions tradition and distrusts the established way of doing things.
As a family leader, ensure that the family mission is always top of mind, and create a governance structure that facilitates the execution of the mission, open dialog, and conflict resolution.
Learn to communicate to millennials in ways that will reach them in meaningful and memorable ways.
Be ever mindful of the millennial desire to make an impact: in investing, in philanthropy, and in their lives. Nurture human capital as diligently as financial capital.
And keep the faith knowing that the millennials are optimistic about the future. They are committed to making the world better – in their own unique, and sometimes unorthodox style.
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Maryann Bovich and Ed Fowler are co-heads of the Asset Management practice. Their clients are traditional and alternative institutional investment firms, endowments, foundations, wealth management firms, and family offices. For all of these clients, they recruit talent in all functional areas including Trustees and all other C-Suite positions. Our dedicated Family Office team, focuses on attracting best-in-class C-Suite talent in the areas of general management, investment, operations, and client service, and has adapted to the profound growth and transformation of family offices nationwide over the past several decades.
