Reputation management: Why UHNW families need legal advice to protect their privacy

Ultra-high-net-worth (UHNW) families are often very discreet about their wealth, their activities and their philanthropy. They may prefer to keep a low profile and avoid attracting unwanted attention or criticism. However, this approach may not always serve them well in the long term, especially in the age of social media and digital transparency.

According to a survey by Julius Baer, 80 per cent of wealth management advisers said that their UHNW clients were too discreet for their own good. The survey found that the next generation of UHNW families were more willing to communicate their values and achievements, but still faced challenges in finding the right balance between transparency and privacy.

Reputation risks

UHNW families face a number of reputation risks that can affect their personal and professional lives, as well as their legacy. These include:

• Cyberattacks and data breaches: UHNW families are attractive targets for hackers, who may seek to steal their sensitive information, extort them or expose them to the public. Cyberattacks can also damage their businesses, assets and investments.

• Media scrutiny and negative publicity: UHNW families may face increased scrutiny and criticism from the media, especially if they are involved in controversial or unethical activities, such as tax evasion, corruption, environmental damage or human rights violations. Negative publicity can harm their reputation, credibility and trustworthiness, as well as their relationships with stakeholders, customers, employees and regulators.

• Family disputes and succession issues: UHNW families may experience conflicts and disputes among their members, especially during times of transition, such as divorce, death or inheritance. Family disputes can lead to legal battles, public scandals and reputational damage, as well as emotional distress and family breakdown.

• Social responsibility and impact: UHNW families are expected to contribute to society and make a positive impact with their wealth, especially by the younger generation and the public. However, some UHNW families may not have a clear or consistent strategy for their philanthropy, social responsibility or impact investing, or may not communicate their efforts effectively. This can result in missed opportunities, wasted resources and criticism from stakeholders and society.

Risk mitigation

To mitigate these reputation risks, UHNW families need to be more proactive and strategic in managing their reputation. They need to:

• Assess their reputation and identify potential threats: UHNW families need to understand how they are perceived by different audiences, such as the media, the public, their peers, their employees, their customers and their regulators. They need to monitor their online and offline presence, and identify any potential threats or vulnerabilities that could damage their reputation.

• Develop a reputation strategy and plan: UHNW families need to define their reputation goals and objectives, and align them with their values, vision and purpose. They need to develop a reputation strategy and plan that outlines their key messages, actions and initiatives, as well as their communication channels, tools and tactics. They need to allocate sufficient resources, time and expertise to implement their reputation plan.

• Engage and communicate with their stakeholders: UHNW families need to engage and communicate with their stakeholders regularly and transparently, and build trust and rapport with them. They need to share their story, their achievements, their challenges and their impact, and highlight their positive contributions to society. They need to respond to feedback, queries and criticism, and address any issues or concerns promptly and professionally.

• Review and evaluate their reputation performance: UHNW families need to measure and evaluate their reputation performance and impact, and assess their progress and results. They need to collect and analyse data and feedback from their stakeholders, and use them to improve their reputation strategy and plan. They need to celebrate their successes, learn from their failures and adapt to changing circumstances and expectations.

By being more proactive and strategic in managing their reputation, UHNW families can enhance their personal and professional image, protect their wealth and legacy, and create a positive and lasting impact on society.

Legal advice

This is where legal advice can play a vital role in helping UHNW families manage their reputation and protect their privacy. Lawyers can help UHNW families to:

• Understand the legal risks and opportunities of disclosing or withholding information in different jurisdictions and contexts.

• Develop a strategic and proactive approach to reputation management, rather than reacting to crises or scandals.

• Create and implement policies and protocols for handling media inquiries, social media posts, and public statements.

• Establish and maintain trust and credibility with their stakeholders, such as employees, customers, partners, regulators, and beneficiaries.

• Align their reputation with their values, vision, and purpose, and communicate them effectively and authentically.

• Enhance their social impact and influence by showcasing their philanthropic and environmental initiatives and achievements.

Summary

• UHNW families are often too discreet for their own good, which can affect their reputation, legacy, and social impact.

• The next generation of UHNW families are more open to communicating their values and achievements, but still need to find the right balance between transparency and privacy.

• Legal advice can help UHNW families to manage their reputation and protect their privacy in a strategic and proactive way.

Janina is a solicitor registered in England and Wales, and the Republic of Ireland, and a member of the American Bar Association. Her extensive legal expertise spans Corporate Law, Sanctions, and Corporate Governance. Beyond law, Janina is a Chartered Company Secretary and showcases a passion for global cultures, evident in her fluency in eight languages. Advising multinational giants, her unique blend of legal acumen and cultural insight sets her apart, offering readers a rich, global perspective on her subjects. Janina is also a private investigator and a member of the Association of British Investigators and she is actively using the investigative techniques (including the use of the Artificial Intelligence, OSINT and HUMINT)  in her legal work.