Here’s a shocking truth: even among the ultra-wealthy, deciding how much to pay family members in their private investment firms can be a minefield. But here’s where it gets controversial—while these roles offer younger heirs valuable experience, especially in a tough job market, the pay often falls short of industry standards. Why? Because there’s this unspoken assumption that family members are already benefiting from dividends or inherited wealth, so they ‘don’t need’ competitive compensation. And this is the part most people miss—this mindset, according to family office consultant Joshua Gentine, is fundamentally flawed. As a third-generation heir to Sargento Foods, Gentine argues that underpaying family members can breed resentment, yet many feel trapped by loyalty and fear of appearing greedy if they negotiate. Imagine asking your parent for a raise—awkward, right? But in any other company, they’d advocate for themselves without hesitation. On the flip side, those who are overpaid often feel shackled by ‘golden handcuffs,’ unable to leave even if they want to. Disputes over compensation are common, though rarely discussed openly, says Kyler Gilbert of Business Consulting Resources. Gilbert points out that generational expectations often skew pay decisions, with self-made entrepreneurs benchmarking salaries against what they earned at their children’s age, ignoring today’s higher cost of living. Here’s the kicker—family offices rarely have formal compensation structures, leaving room for inconsistent practices, like paying all family members the same regardless of their roles. Trish Botoff, a compensation consultant, notes that conflict often arises among siblings or cousins, especially as millennials and Gen Z heirs increasingly demand transparency and formalized plans. So, what’s the solution? Gilbert suggests working with consultants or creating mediation committees to prevent conflicts before they start. But here’s the question: Is it fair to pay family members less just because they’re family? Or should they be compensated like any other professional? Let us know your thoughts in the comments—this debate is far from over.
