Hiring a family member vs an outside professional
Built on Chapter 2 of The Single Family Office by Richard C. Wilson. Full chapter text: FamilyOffices.com.
Every family office faces this question sooner or later. Should a family member run the office, or a hired professional? There is no single right answer, but there are clear trade-offs, and families that think them through early avoid a lot of pain.
The case for a family member
Trust is the biggest reason families choose one of their own. A family member already shares the family's values and knows its history, its quirks, and its private matters. There is less risk of a stranger misusing access.
In many parts of the world, especially in Asia and Latin America, a family member often leads the office and acts as both CEO and CIO. Some families see this as part of preparing the next generation to lead.
A family member may also accept lower pay, or none, which keeps overhead down.
The case for an outside professional
An outside professional brings skills and experience the family may lack. Running a portfolio, managing a team, and handling complex tax and legal work are specialized jobs. A seasoned hire has usually done them before.
Outsiders can also be more neutral. When siblings or cousins disagree, a professional with no stake in the family politics can sometimes find a fair path.
The risks on each side
Family members can be hard to hold accountable. If a cousin underperforms, firing him has consequences at every holiday dinner. Favoritism, or the perception of it, can damage trust across the family.
Outsiders bring a different risk. They may not share the family's values, and some may put their own pay or career ahead of the family's long-term interest. Clear governance and careful hiring reduce that risk.
A common middle path
Many families combine the two. A family member serves as CEO or chair and sets direction, while professionals run the investments and the books. That keeps family values at the top and expert skill in the engine room.
Another option is to bring a family member in as a junior hire who learns under experienced professionals. Over years, that person can grow into leadership with real training behind them.
Put rules in writing
Whichever route you choose, write down how family members are considered for roles. Spell out whether spouses, in-laws, and friends of the family are eligible. Explain how pay is set and reviewed. Apply the same performance standards to family and non-family staff.
Family members who work in the office should follow the same handbook as everyone else. Different rules for family breed resentment among staff and other relatives.
Plan for the hand-off
If a family member leads the office today, plan who comes next. Name a likely successor early and give them real responsibility, not just a title. Pair them with an experienced outside mentor. Set a rough timeline for the hand-off and review it with the family each year. The worst outcome is a sudden vacancy with no one prepared.
Questions to ask before deciding
- Does this family member have the skills, or the willingness to build them?
- Can the family hold them accountable if things go badly?
- Would an outside professional serve the family better for this role right now?
- How will other family members see the choice?
What to take from this
- Weigh trust and values against skill and neutrality.
- Try a family chair with professional managers.
- Write down rules on how family members are hired and paid.
- Hold family and non-family staff to the same standards.
This page is general information, not legal, tax, or employment advice. Speak with an employment attorney before setting roles, pay, or hiring policies.
Questions and answers
Should a family member run the family office? It can work well, especially with skilled professional support. It depends on skill and accountability.
What are the risks of hiring family? Weak accountability and favoritism, plus conflict that spills into family life.
What are the risks of hiring outsiders? Weaker alignment with family values, which governance and careful hiring can reduce.
Is there a middle path? Yes. A family member can chair the office while professionals run daily work.