Why Family Offices Keep Hiring the Wrong First Employee

By Jay L. Rogers

Family offices often hire for the institution they hope to resemble. UBS asked its family office clients what the first hire would most commonly be for a new office, and 22% said an investment portfolio manager. An accountant drew 7% (UBS 2025). I think that ordering gets many offices backwards. If the family can’t produce a reliable, consolidated balance sheet, it needs accounting infrastructure. If advisers, entities, and family members operate without clear accountability, it needs an operating leader. If investment decisions demand sustained expertise the existing advisers can’t supply, it may need a CIO. Hire against the current bottleneck, not the most impressive résumé. A CIO handed a shoebox of statements is an expensive archivist. Two exceptions come later, a chief executive and an AI engineer.

Wealth isn’t workload

Assets under management make a poor hiring guide. Take two hypothetical families. One holds $300 million in liquid securities, a few entities, one household, and an established outside adviser. The other holds $100 million spread across operating businesses, rental properties, trusts, private funds, several households, and cross-border obligations. The first is wealthier on paper. The second needs a controller much sooner.

Four jobs that get lumped together

A bookkeeper records transactions and reconciles accounts. A controller owns the close, consolidated reporting, and accounting policy. A COO coordinates people, providers, and execution. A CIO owns investment policy, portfolio construction, and liquidity planning. Those are my proposed boundaries, and real mandates vary. Deloitte draws a similar line between investment leadership and financial leadership, with controllers and accountants reporting to a CFO (Deloitte).

The bookkeeper and the controller

A bookkeeper pays for itself when recurring transaction work outgrows what the principal, an assistant, the CPA, or an outsourced service can handle. Avoided outside processing, plus displaced internal work, plus fewer errors, has to exceed fully loaded cost. Suppose, illustratively, a hire that costs $100,000, replaces $65,000 of outside processing, and frees 200 hours of principal time. Break-even requires valuing those hours at $175 each, before crediting any error reduction. That’s a planning example, not a pay benchmark.

When the real problem is inconsistent trust accounting, intercompany balances, or private-investment records, a cheaper bookkeeper just produces more transactions for someone else to correct. The right first accounting hire may be a controller, with bookkeeping outsourced beneath that person. Most offices keep bookkeeping (67%) and consolidated reporting (75%) in-house, while 75% outsource legal work and 59% outsource tax planning (UBS 2026), so outsourcing the ledger is a choice, not a default.

The COO

An operating leader earns the seat when coordination, rather than transaction volume, is the problem. Advisers do overlapping work and nobody owns the outcome. Capital calls, tax payments, and distributions travel by scattered email. Family members can’t say who authorizes what, and the principal remains the routing center for every decision.

UBS’s 2026 survey of its family office clients, whose families average $2.7 billion in net worth, shows the gap. Non-investment professionals make up 40% of staff, yet only 49% have written job descriptions for the roles in the office, and 31% have a process to select and review outside service providers (UBS 2026). The business case compares the cost and risk of fragmented execution against the cost of accountable leadership.

The AI engineer

Much of what a junior staffer does all day is repetitive: summarizing documents, transcribing meetings, sorting email, assembling reports. AI agents can now do a growing share of that work, and in my view at far lower cost than a clerical hire. Citi Institute reports that 22% of family offices use AI for operational tasks or investment analysis, up from 13% a year earlier, and that 57% name a lack of internal expertise as the biggest barrier (Citi). An AI engineer, in-house or outsourced, fills that gap by building agents with defined, limited jobs.

The arithmetic matches the bookkeepers. Avoided outside processing plus displaced hours must exceed the engineer’s fully loaded cost and the cost of the secure environment the agents run in. Agents touch the family’s most private records, so the office needs hardened infrastructure first: access controls, logging, encrypted storage, and vetted vendors. Citi’s principals call data privacy non-negotiable, and some offices may already expose data to AI through software vendors without a deliberate decision (Fortune). UBS found that 43% of offices rank cyberattack as a top five-year risk, yet only 41% have cybersecurity controls and 52% outsource the function (UBS 2026).

My rule is sequence again. Automate a clean process, not a messy one, or you’ll produce errors faster. That puts the engineer after the controller and alongside the COO, and I’d outsource the build until the data environment is secure. Agents should never hold authority to release money, which brings back the same segregation of duties a human clerk would face.

The CIO

A portfolio reaching a round number isn’t a reason to hire a CIO. The role fits when continuing workload needs dedicated ownership: heavy manager oversight, private-market commitments, direct investments, concentrated exposures, or complicated liquidity obligations. The economics are incremental, measured against the existing arrangement and not against having nothing.

Assume a CIO and supporting infrastructure cost $750,000 fully loaded and eliminate $300,000 in outside advisory fees. The remaining $450,000 equals 15 basis points on a $300 million portfolio. It states the hurdle the family has to clear, and it has to be risk-adjusted.

The expert generalist exception

Some families need a chief executive first. Search executives call the ideal head of an office an expert generalist, someone with broad command of finance, tax, estate planning, investments, and philanthropy, and Linda Mack of Mack International says 95% of her searches turn on culture fit (Hunt Scanlon). A founder with a significant exit, or a multigenerational family with a foundation and interests across real estate and operating companies, may be best served by such a person, who can recruit the rest of the team from a personal network of family office professionals. That can eliminate search fees, and the deal flow and relationships with other families are hard to value up front. The role often doubles as CEO and general counsel, or CEO and CIO. I’ve also seen CEO and CFO, but it frequently fails, because the visionary and the number cruncher want different things from the same desk.

Long-term incentive plans operate at 54% of single family offices, and at 62% of investment-focused ones (Morgan Stanley).

Sequence, and the controls that outlast it

For a family whose investments are outsourced and whose immediate problem is administration, a sensible order runs from outsourced bookkeeping under an accountable internal owner, to a controller, to a COO, then an AI engineer once the records are clean and the environment is secure, and finally a CIO once investment work independently supports one.

Whatever the order, separate initiation, approval, movement, and reconciliation of money wherever practical. Write the job’s success criteria before recruiting: what becomes more accurate, what becomes faster, what outside expense disappears, which decisions leave the principal’s desk, and what stays outside the role. Payroll is the biggest line, at two-thirds (66%) of pure operating costs in 2024 (UBS 2025). The right first employee gives the next one a working platform, whatever the title says about the office.

Author Bio: Jay L. Rogers is Chief Investment Officer of Alpha Strategies Investment Consulting and Managing Partner of Global Rock Family Office Group. He has spent more than thirty years in institutional and family office investment management, including senior roles at Bear Stearns, Morgan Stanley, and Wells Fargo, and serves as a testifying expert witness in fiduciary duty and family office litigation.