Lead
On Jan. 22, 2026, reporting on wealthy family offices shows a growing trend: ultra‑rich families are hiring millennial and Gen‑Z heirs into their private investment firms as a pathway to experience and succession. Recruitments often coincide with family offices expanding into alternatives and startup deals, creating more roles for younger relatives. But compensation is a persistent flashpoint—family members frequently earn less than market rates or receive pay arrangements that breed resentment or “golden handcuffs.” Advisors interviewed for the coverage say unclear pay structures and generational expectations are central to the tension.
Key Takeaways
- Family offices are increasingly recruiting next‑generation staff as they increase allocations to alternatives and startups; this trend broadens hands‑on investing opportunities for heirs.
- Consultant Joshua Gentine says relatives are often paid below comparable market salaries because principals assume heirs already benefit from family wealth, a practice he considers flawed.
- Kyler Gilbert, whose parents founded a family business 45 years ago, reports disputes over promised bonuses and notes that peers in their generation (age 27) face awkward dynamics when negotiating pay.
- When relatives are underpaid, they may feel powerless to object due to loyalty; when overpaid, they can feel trapped by “golden handcuffs” and reluctant to leave.
- Smaller family offices are especially prone to informal or uniform pay practices—paying a generation the same regardless of role—creating fairness and retention problems.
- Advisors recommend using compensation consultants and written plans or committees to set market‑based pay levels and reduce conflict.
Background
Family offices have grown in number and sophistication in recent years as wealthy families expand private investment programs and diversify beyond public equities. Many of these offices aim to cultivate internal talent for long‑term stewardship, recruiting younger relatives into operations and deal teams to preserve institutional knowledge and reduce reliance on external hires. The move is partly generational: millennials and Gen‑Z heirs want meaningful roles and are comfortable pushing for formal arrangements.
Despite hiring next generation staff, many family offices retain informal governance and compensation systems—particularly smaller offices founded by a single entrepreneur. Principals who were self‑made often benchmark their children’s pay against what they earned at a similar age, rather than current market rates, overlooking inflation and higher living costs. That mismatch sets the stage for disputes when relatives compare compensation with peers outside the family.
Main Event
Advisors and consultants describe a common pattern: younger family members take roles in a private investment firm but receive pay that lags the market because the principal assumes family wealth offsets the difference. Joshua Gentine, a family office consultant and a third‑generation heir to Sargento Foods, argues this rationale is misguided and that underpayment sows resentment. He says heirs may hesitate to ask for market parity because they fear appearing greedy or damaging family relationships.
Conversely, some relatives receive above‑market compensation and feel constrained from leaving. That dynamic—high pay creating retention through dependence rather than engagement—is what advisors call “golden handcuffs.” The result is a workforce whose loyalty is complicated by financial incentives that do not reflect typical employment bargaining dynamics.
Anecdotes from advisors illustrate the problem: Kyler Gilbert, who advises family businesses and whose parents started a firm 45 years ago, recounted a client who closed a deal but then faced withheld bonuses from family members who judged the payout too generous. The client feared escalating the dispute for fear of harming family ties. Such episodes underline how informal agreements and mixed expectations can disrupt both governance and operations.
Analysis & Implications
First, compensation practices in family offices have talent‑management consequences. Paying relatives below market increases turnover risk among ambitious heirs who may seek outside roles for fair pay and career growth; paying above market can entrench complacency and reduce organizational agility. Both outcomes undermine the long‑term goal many families have of preparing successors with real investing experience.
Second, governance and reputation are at stake. Informal or opaque pay structures can create perceptions of favoritism or arbitrariness among siblings and cousins, fueling disputes that may escalate into governance crises. For multi‑generation families, these conflicts can affect asset management decisions and the office’s risk tolerance, ultimately influencing portfolio performance and stewardship.
Third, formalizing compensation reduces ambiguity and improves accountability. Advisors point to three practical remedies: benchmarking roles to market rates, documenting compensation and responsibilities in writing, and creating independent or cross‑generational committees to assess pay and performance. These steps can both professionalize the office and protect family relationships.
Comparison & Data
| Characteristic | Typical Family Office Practice | Standard Market Practice |
|---|---|---|
| Salary benchmarking | Often informal or anchored to founder’s past earnings | Regular market surveys and role‑based ranges |
| Bonus & payout clarity | Promises sometimes verbal; disputes arise | Documented bonus plans tied to KPIs |
| Governance | Family‑centric decision making, variable oversight | Independent committees and HR policies |
This comparison highlights how informal practices in many family offices contrast with typical corporate HR practices. Formal benchmarking and written plans help align incentives, reduce disputes, and improve retention—especially as offices compete for talent in a tight market.
Reactions & Quotes
Several consultants and next‑generation participants provided perspective on compensation dynamics and possible fixes.
“I think family is paid less because there is this idea that they are already getting dividends or have a high net worth,”
Joshua Gentine, family office consultant and third‑generation heir
Gentine says that assumption undermines fair pay practices and can lead to resentment when heirs compare themselves to market peers.
“For a lot of current‑generation business owners, things have worked in their favor… everything’s more expensive and compensation is more important,”
Kyler Gilbert, adviser and next‑gen family member (age 27)
Gilbert emphasizes generational differences in expectations and the need to account for changed economic conditions when setting pay.
“They want things in writing. They want compensation plans more formalized,”
Trish Botoff, compensation consultant
Botoff notes that millennials and Gen‑Z entrants are less willing to accept informal assurances and seek documented agreements as a condition of joining or remaining with a family office.
Unconfirmed
- There is limited public data quantifying the average pay gap between family‑office relatives and comparable market roles; anecdotes suggest the gap exists but scale is unclear.
- Reports of withheld bonuses and specific family disputes originate from individual cases and may not reflect industry‑wide norms.
Bottom Line
As wealthy families bring younger relatives into private investment firms, compensation becomes both a practical and relational issue. Underpaying heirs risks eroding morale and pushing talent outward; overpaying without accountability can trap staff and blunt performance incentives. The recurring prescription from advisors is straightforward: benchmark roles to market standards, document pay and responsibilities, and use committees or outside consultants to mediate disputes.
For family offices aiming for longevity, combining family values with professional HR practices is not merely administrative—it is strategic. Clear, market‑aligned compensation tied to documented duties and performance will help preserve family cohesion, attract capable next‑generation leaders, and sustain the office’s investment objectives over decades.