IS THE CIO DRAGGING DOWN THE FAMILY OFFICE’S PERFORMANCE?

“IS THE CIO DRAGGING DOWN THE FAMILY OFFICE’S PERFORMANCE? (And What Can You Do About It?)” with R. ADAM SMITH.

The Family Office CIO job involves a delicate high wire act. The position can be the fraught intersection of:

• Asset Allocation (& collision of “endowment” vs “family adjacent” strategy)
• Cash Management
• Deal Sourcer/Vetter
• Club Deal Gatekeeper
• Risk & FOMO mitigater
• Overall One-Man Band

R. ADAM SMITH advises families around deal and investment structure via RAS CAPITAL PARTNERS. We discuss the evolving CIO in family offices, Our discussion addresses the importance of expectation-setting on both sides. We get into what the families can do to understand their own needs (and why they might be the problem!). The goal is to help both sides unlock potential and get out of the way of performance.

Adam Smith’s Background (2–3 min)

• Adam gives a brief personal background and current work with family offices
• Set up the problem: Many family offices operate with misaligned or underperforming CIO structures
• Mention growing tension between opportunistic deal flow vs. structured allocation frameworks

CIO Dragging: Defining the“Non-Functioning CIO” (3–4 min)

• Describe what a non-functioning or misaligned CIO looks like in a family office
• Common traits: reactive, relationship-driven over process-driven, lacking risk discipline
• The consequences: inconsistent returns, governance confusion, lack of accountability

Deal-Driven vs. Allocation-Based Models (4–5 min)

• Explain the difference between a deal-centric CIO vs. one focused on institutional-style allocation
• Why the dealmaker mindset often prevails in emerging family offices
• Tradeoffs: speed and access vs. diversification, scalability, and defensibility
• Challenges when there’s no clear investment policy statement (IPS)

Why Do Families Tolerate This? (2–3 min)

• Emotional and trust-based dynamics—families often default to familiarity over structure
• Over-indexing on “access” as value
• Underestimating the long-term risks of ad hoc strategies

What CIO Institutionalization Looks Like (3–4 min)

• What a functional, institutional CIO framework looks like (clear mandate, reporting, delegation, rebalancing discipline)
• Role of governance in supporting this structure
• When and how to make the transition—triggers and best practices

Cultural and Generational Resistance (2–3 min)

• Why some families resist institutionalization
• How generational shifts are challenging legacy CIO models
• Importance of aligning values and objectives—not just tactics

Closing Thoughts THE CIO DRAGGING ON THE FAMILY OFFICE PERFORMANCE (2 min)

• Tie back to broader themes of sustainability, legacy, and governance in family offices
• Call to action: revisit your CIO model—does it reflect your goals or just your past?
• Emphasize the importance of aligning investment leadership with broader family vision

Other CIO Dragging Considerations-

Do the staffing and comp models adequately align the employer and employee?  

What does a successful structure look like and how much does it cost?  

What dos a minimum structure look like and how much does it cost?  

Are CIO’s under resourced and put in a failing position?  

How does career risk factor into CIO decision-making?  

Does the threat to the family’s relevance in decision-making risk factor into this?  

How much time is wasted doing “pretend” work to maintain access to other family offices deals?  

Do you measure investment adjacency to the family specialty and how should that affect the evaluation of the CIO’s performance?  

What happens when a deal-centric CIO is thrust into an asset class that is out of their expertise?  

What is the benchmark performance for a FO CIO these days?  

On the ESG, DEI, impact and philanthropy front, are these buckets in an overall allocation (sometimes where younger generations can be brought along?) or are you seeing FO’s incorporating the values metric in the overall allocation?  Is there a trend to think of family offices as useful for one generation and then to have them split up?

BRIAN ADAMS ON FAMILY OFFICE RECRUITING