Background and reference checks on family office hires
Built on Chapter 2 of The Single Family Office by Richard C. Wilson. Full chapter text: FamilyOffices.com.
The people inside a family office see everything: bank accounts, private deals, family disputes, home addresses, and travel plans. That level of access calls for more care in hiring than most companies use. Checking people well is one of the cheapest forms of protection a wealthy family can buy.
The baseline
Everyone you hire into a family office should go through a background check. Call every past employer, not just the ones the candidate lists as references.
Many families go further. Some refuse to hire anyone they have not known personally or professionally for several years, even if that means paying more or accepting less experience. The trust needed to help run a large fortune often outweighs everything else.
How many references
My rule of thumb is to call and email at least four references and to meet at least one in person. If an in-person meeting is not possible, a video call with one or more references is the minimum.
Go beyond the names the candidate provides. Ask each reference who else worked closely with the person, and call them too. The most useful insights often come from the second or third ring of contacts.
What to ask
Generic questions get generic answers. Ask specific ones:
- What was this person responsible for, and how did they perform?
- Tell me about a time they made a mistake. How did they handle it?
- How did they treat junior staff and vendors?
- Would you hire them again for the same role? Why or why not?
- Is there anything I should know that I have not asked about?
Listen for hesitation. A pause before "yes, I would hire them again" can tell you more than the words.
Background checks
Families commonly check criminal records and credit history where allowed, plus education and licenses. Some families require drug testing for every hire, including family members. Rules on what can be checked vary by country and state, so have counsel set the process.
Tell candidates up front
One family office executive I know tells every potential partner and hire at the start that his team will check their past and present claims. Some people quietly withdraw once they hear that. That alone saves time.
Being open about your process also signals seriousness. Strong candidates respect it.
Check advisors and partners too
The same care should apply to outside advisors, deal partners, and service providers. Many family losses I have seen trace back to a trusted friend or advisor who was never properly checked. Friendship is not diligence.
Build it into governance
Write your checking process into the family's hiring policy. Spell out how many references, which checks are required, and who signs off. Apply the same process to family members who join the staff. A written process removes awkward debates later.
Recheck over time
People change, and so do their circumstances. For senior roles with access to large sums, some families repeat basic checks every few years. Pair this with ongoing controls such as dual approval on large payments and an annual audit.
What to take from this
- Run background checks and call every past employer.
- Contact at least four references and meet at least one.
- Tell candidates up front that you check claims.
- Apply the same checks to advisors and partners, and to family members who join the staff.
This page is general information, not legal or employment advice. Background checks are regulated in many places, so speak with an employment attorney before running them.
Questions and answers
How many references should a family office check? I suggest at least four, with at least one in-person or video meeting.
Should family offices call references not provided by the candidate? Yes. Call every past employer and the people references point you to.
Do family members need background checks too? Many families apply the same process to everyone, including family.
What else protects the family after hiring? Ongoing controls such as dual approval on large payments and an annual audit.