Succession Planning and Executive Search

Family office succession planning is the structured process of identifying, developing, and transitioning leadership to ensure a family office keeps running across generations. It covers governance design, talent strategy, executive search, and next-gen preparation.

Most family offices will face a leadership transition within the next decade. Few are ready. The J.P. Morgan 2026 Global Family Office Report found that 86% of family offices lack a clear succession plan for key decision makers. Bank of America's 2025 study gets there from a different angle: 87% of offices are still under first-generation leadership, and nearly 60% expect a transition within ten years.

The gap between "expecting a transition" and "having a plan for one" is where things fall apart.

I see this every week. A Principal in their late sixties, still signing off on every wire transfer, still the only person who knows why the family holds a particular real estate position in Austin or why the relationship with a specific GP matters. The knowledge is there. The documentation isn't. The bench is thin.

Why do most family offices lack a succession plan?

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Three things: founder reluctance, governance gaps, and family relationships that are hard to untangle.

Bank of America found that 56% of family offices face future-planning challenges across education, governance, and talent retention. Campden Wealth's 2025 Operational Excellence Report found that nearly half of offices lack a documented succession plan or family constitution, and two-thirds don't have any conflict resolution mechanisms in place.

The UBS 2025 Global Family Office Report found that only 26% of families brought the next generation into succession planning from the start. And Deloitte's research suggests that nearly 30% of families say the next generation isn't prepared to take over.

These problems don't fix themselves with time. They get worse.

What makes hiring family office executives so difficult?

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The professionalization of family offices has moved faster than anyone expected five years ago. JPMorgan's 2024 data shows that 50% of family offices globally now have non-family CEOs or presidents, a figure that climbs to 63% among offices managing over $1 billion in assets. According to Wholesale Investor's 2026 briefing, 63% of CIOs and 68% of CFOs are now non-family professionals.

Finding those people is the hard part. RBC and Campden Wealth's 2025 North America report found that over 90% of family offices report difficulty recruiting staff. The IMD Global Family Business Center confirmed this in their December 2025 report, describing a "highly competitive market for top-tier professionals" driven by next-gen leaders who want expertise their parents never prioritized: impact investing, sustainability, technology integration, and diversity.

The challenge isn't finding talent. It's finding talent that fits. A CIO who thrived at a $20 billion pension fund might not have the patience to sit across the table from a 28-year-old heir who wants to understand every line of the portfolio. Family office work requires a rare combination of technical judgment and relational patience that no resume can capture.

Why isn't compensation enough to retain family office talent?

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Family office compensation has gone up sharply. But money alone doesn't solve the retention problem. CNBC reported in 2025 that median total compensation for family office CEOs sits at $825,000, jumping above $1.2 million at offices managing over $1 billion in AUM. CIO medians are at $900,000. Co-investment opportunities, once rare, are now offered by 57% of offices.

Those numbers still trail what top performers earn at large hedge funds or private equity shops. So offices are getting creative with long-term incentive plans and carried interest structures. Nearly two-thirds of investment-focused offices now use some form of LTIP.

The offices that keep their best people tend to share one trait: they treat professional leadership as a partnership, not a service arrangement.

Where should family office succession planning actually start?

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Not with a search. It starts with a governance conversation. Five steps:

1. Map current decision-making authority. Document who makes decisions today, investment, operational, philanthropic, and family, and identify single points of failure.
2. Define the future leadership model. Figure out who should be making decisions in five years. And what happens if the Principal is suddenly unavailable.
3. Build a governance framework. Put a family constitution in place. Create conflict resolution mechanisms. Set up a formal advisory or board structure.
4. Assess internal vs. external leadership needs. Can the next generation or current staff fill key roles? Or do you need a retained executive search?
5. Engage a retained search partner. When an external hire is needed, work with a firm that understands family office governance, Principal-level compensation, and the cultural fit that determines long-term success.

These questions are uncomfortable. They're also the ones that matter.

Internal promotion vs. external executive search: How should family offices decide?

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It depends on a few things.

Cultural fit. Internal candidates already know the family. External hires need careful assessment and onboarding, but they can serve as a neutral bridge between generations.

Institutional knowledge. Internal candidates understand the family's history and portfolio rationale. External hires bring fresh perspective but need time to learn.

Skill gaps. Internal candidates might lack specialized expertise in areas like impact investing or technology. An external search can target specific competencies.

Next-gen credibility. Internal candidates can be seen as "the old guard" by the rising generation. An external hire can reset things.

Timeline and cost. Internal promotion is faster and cheaper upfront. External search takes longer and costs more, but it opens a wider talent pool.

The right call depends on the family's governance structure, how urgent the leadership transition is, and whether internal candidates can hold the confidence of both generations.

How urgent is the family office leadership transition?

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More urgent than most families think. With 87% of offices under first-generation leadership and nearly 60% expecting a transition within the next decade, the window for planning is getting smaller every year.

When a retained search does begin, the mandate should reflect reality. The right hire isn't someone with the right resume. It's someone who can hold the confidence of a founding generation while earning the trust of the next one. Someone whose judgment holds up when the family relationships get complicated.

That kind of fit is hard to assess in a standard interview process. It requires a search partner who understands family governance, non-family CEO hiring, compensation at the Principal level, and the difference between a candidate who interviews well and one who will still be in the seat three years later.

A family office that starts succession planning today, with honest governance conversations, clear documentation, and a search partner who understands this space, is building something that outlasts any single leader. The ones that wait are betting on continuity without a plan.

For a closer look at how to build the professional team that supports long-term family office operations, see our piece on building high-performance teams for family offices.

Frequently Asked Questions

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What is family office succession planning?

It's the process of preparing for leadership transitions, both family and non-family, to make sure the office's investment strategy, governance, and operations keep working across generations. That includes governance design, talent development, documenting institutional knowledge, and executive search when needed.

Why do so many family offices lack succession plans?

According to J.P. Morgan's 2026 Global Family Office Report, 86% of family offices don't have a clear succession plan for key decision makers. The biggest barriers are founder reluctance to give up control, weak governance structures, and the difficulty of balancing family relationships with professional management.

How hard is it to hire executives for a family office?

Very. RBC and Campden Wealth's 2025 report found that over 90% of family offices report difficulty finding qualified staff. It's not just about technical expertise. It's about finding professionals who combine investment skill with the relational patience to work across multiple generations of a family.

What do family office executives earn?

As of 2025, median total compensation for family office CEOs is $825,000, rising above $1.2 million at offices with over $1 billion in AUM. CIO medians sit at $900,000. Over half of offices also offer co-investment opportunities, and two-thirds of investment-focused offices use long-term incentive plans.

When should a family office start succession planning?

Now. With 87% of family offices still under first-generation leadership and nearly 60% expecting a transition within the next decade, the window is closing. Start with governance conversations and decision-mapping well before any leadership change is on the horizon.

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