The East-West Wage Gap for Family Offices is Narrowing
Family office professionals working in the United States were once again the most well-paid in the world. However, C-suite executives at Asian family offices are rapidly catching up.
According to a recent survey by Agreus Group, more than 40% of chief executive officers at US-based family offices earned more than $396,000 a year in compensation. Meanwhile, 36% of family office CEOs in the Asia-Pacific region earned salaries exceeding that threshold. The 4-percentage-point difference represents a narrowing gap in compensation for family office professionals in the two regions.
That trend closely follows the pace of wealth creation and professionalization in Asia. The number of ultra high networth individuals – those worth $30 million or more – is growing faster in Asia than anywhere else in the world. Economic superpowers China and India drive much of the wealth generated, but economic development in countries such as Vietnam, Malaysia and Thailand is also a critical factor.
Family offices in the region are also rapidly professionalizing, according to the Bloomberg Family Office Forum. Younger generations of family office leaders are more willing to adopt sophisticated investment strategies (including venture capital and hedge funds) and hire non-family members to infuse expertise in the team. This has created upward pressure for compensation in the region.
However, the gap in pay doesn’t necessarily reflect a difference in performance. On the contrary, Bloomberg found that Asian family office CEOs were the best performers in the world. Last year, the average return of a family office in Asia was 6.2%, compared to 5.9% gained by their North American peers, and the 4.3% return of European family offices.