Regardless of the level of wealth or social profile, all families ought to take the prudent steps necessary to bolster their security in order to protect their most vital assets. Risk management includes taking care of the lives of loved ones – as well as reputation, privacy, and financial resources.
A large amount of what goes on under the name of “wealth management” can sometimes be better described as risk management. All kinds of risks arise: loss of wealth, health and loved ones and from a variety of sources. New technology has brought with it the specter of cybercrime, for example.
A person with plenty of credibility to write about these issues is Fred Krawchuk, senior management consultant and family coach with The William’s Group. Krawchuk has a background in the armed forces. He is a former US Army Special Forces Colonel and US Department of State Fellow. During his career Krawchuk has provided security in many high-risk areas around the globe. He is a graduate of the United States Military Academy, Harvard University, and IESE Business School. The editors are pleased to share these insights with readers; the usual disclaimers about outside contributors’ views apply. To jump into debate, we urge readers to contact us at firstname.lastname@example.org and email@example.com
Managing risk is imperative to families. Estate planning, financial and tax planning are some of the critical ways pragmatic families shield their resources. Building trust, improving the capacity to manage family dynamics, and co-designing a shared purpose for a family’s wealth are also ways families safeguard their relationships. (1) Protecting families from physical and information risks is also prudent. According to the BBC, British property developer and millionaire Matthew Gibbard was shot dead and his son injured outside of a luxury hotel in Buenos Aires after being held up by armed robbers. (2) This article will assist families in learning from this tragedy in order to better protect themselves. Not only their physical security, but families can also develop practices to mitigate risks regarding a family venture’s proprietary information, reputation, digital privacy, and personally identifiable information.
Threats and other risks to family interests can come from industry competitors, criminals, terrorists, activists, or anyone with a cellphone and a grudge who wants to post embarrassing information online. An insider threat is an additional security risk that originates within a targeted business or emanates from someone close to a family. (3)
The first step a family should take to protect themselves is to conduct a threat assessment. What are a family’s vulnerabilities? These might include weak points in the security of a residence or workplace. Means of transportation, lifestyle, travel procedures, and potential risks from domestic or business employees are also critical areas to assess.
One of the best defenses to safeguard families after assessing vulnerabilities is to practice situational awareness. Being alert and vigilant to surroundings and guarding access to relationships can help prevent crimes, physical harm, as well as loss of sensitive information. Know what is considered normal and commonplace in a neighborhood, workplace, and other areas family members frequent. Pay attention when things seem out of place, report suspicious activity, and trust one’s instincts if something feels off. (4)
Situation awareness also applies to social media and online communications. According to Campden Wealth, 28 per cent of ultra-high net worth international families, family offices and family businesses have experienced a cyber-attack in the past.(5) To protect digital privacy, families should take the following measures:
-- Beware of social engineering scams, such as phishing and impersonation
-- Delete spam, unknown links, and suspicious emails
-- Use a password manager
-- Employ two-step authentication whenever possible for online accounts
-- Back up your data regularly
-- Use antivirus software on your computer
-- Be aware and careful of what family members and those close to the family post on social media in order to protect identity, location, and other private information
-- Use a virtual private network (VPN) as much as possible (and do not use hotel, airport, or other public Wi-Fi access platforms to view sensitive information) (6)
In addition to protecting digital privacy, families should also take precautions for their physical security. Threats to safety increase, for example, when family members travel, as well as when they socialize or work in unfamiliar environments. In these situations, families ought to:
-- Share travel itineraries with trusted sources and be vigilant about who coordinates travel for the family
-- Research level of health risks and security threats in preparation for travel, and develop crisis responses accordingly
-- Carry medical insurance and a first aid kit to mitigate health risks when abroad
-- Consider International SOS or similar medical services when traveling overseas or when in areas with limited medical support
-- Vary routes and times family members frequent their favorite or typical venues, such as work, gym, and social venues
-- Keep conversations about work and family ventures generic in public spaces
-- Locate the police station and hospital closest to a family’s lodging location whenever they travel or are away from familiar locations (7)