Successful families and individuals need to accept that their personal and professional lives are under more scrutiny, and prepare to manage their communications more proactively.
Privacy of UHNWIs is under threat
The privacy of UHNWIs and families is under attack from all directions – from Government, some elements of the media, and the public.
Social media has changed the way that people think. The public is more curious about the private lives of high-profile individuals. We live in a world where it is quite possible, if not easy, to find out where a high-profile individual is in the world and what they are doing – whether they are a celebrity, politician or otherwise. The public now expects not only to find this information, but be allowed to access it too.
There is always going to be something online about high-profile families, and the choice for families is whether they want to control and define that content, or leave it for someone else to do.
Many media publications have fed this public demand for more information. On one hand, we have seen the growth of blogs and Twitter accounts which are focussed exclusively on reporting and regurgitating gossip; this might be on a celebrity, political, business or even a local blog. As a result, there is likely to be tittle-tattle, usually false, online about families somewhere.
But this personal, sensationalised and highly gossip-ridden coverage is not just limited to social media and blogs. To compete with many of these principally online publications, we have seen some traditional news publications – but certainly not all – lurch to the same type of content, motivated by having to compete in this highly sensationalised online news ecosystem for clicks.
The assault on the privacy of high-profile families has come from the Government too. Global politicians are demanding ever-greater transparency in the financial affairs of wealthy people to curb money laundering, terrorist financing, and tax evasion. While no one would dispute these intentions, it has left many wealth creators directly in the line of fire. For example, families are increasingly being caught in the crosshairs of new beneficial ownership registers.
To mitigate this risk to privacy, families must think about how they want to be perceived by internal and external stakeholders.
The UK now has a Beneficial Ownership Register for companies, land, properties and trusts, and the EU has also legislated to ensure each member state has its own register for companies by 2020. Many offshore centres are also being pressed into doing the same. This is the start of a very slippery slope. It looks like we could end up in a place where families are forced to publicly list all the assets they – and their connected entities – own, including property, businesses, planes, yachts, and other significant holdings.
Aside from the privacy and security implications, this would create an atmosphere where the public judge all wealthy entrepreneurs on their finances rather than the immense positive contribution they have on the UK, the tax they pay, the jobs they create and the money they donate to charities – or, perhaps more importantly still, the values that they live by.
The old ‘tried-and-tested’ methods no longer work
As the nature of privacy evolves, many of the traditional tactics deployed by families and their advisers in the past simply won’t work in today’s world.
In times of reputational crisis, the fallback option for families and UHNWIs has been to throw lawyers and lawsuits at the problem. While there is still a place for this, particularly in cases of clear and obvious defamation, there is often a better approach.
This conventional, traditional approach is undermined by social media and online news. Stopping a negative story from hitting the front page of the newspaper might seem like a win, but the likelihood is that story will likely find itself online anyway (either because it is hosted or posted from an alternative jurisdiction), and a negative story published online has more lasting reputational damage than a story printed in ink.
Successful families need to think about how they want to be perceived by internal and external stakeholders, such as colleagues, investors, journalists, and members of the public.
There is always going to be something online about high-profile families and individuals – good, bad and ugly. It could be their entry in The Sunday Times Rich List or their listings on Companies House, and the choice that families face right now is whether they want to control and define that content, or leave it for someone else to do.
Do they want a significant dividend they paid themselves last year to be the first thing people read about them, or do they want to be judged on the amount of people they employ, how they look after their staff, and the amount of charity work they’re engaged in?
Families stand a better chance of controlling their reputation digitally by engaging in their communications, rather than hiding behind the law.
Families must change their mindset and tell their own story
For far too long, many high-net-worth families and individuals have favoured the ‘wait-and-see’ approach to their own communications – they would only turn their attention to reputation in times of crisis.
But times are changing. The modern-day reputational risks are greater than ever before. Families must adapt accordingly by getting on the front foot and taking a preventative approach in communicating their impact. A failure to do so will leave them vulnerable and exposed.
In times of reputational crisis, the fallback option for families has been to throw lawyers at the problem, but there is often a better approach.
In order to mitigate and manage this risk to privacy, families need to think about how they want to be perceived by internal and external stakeholders, such as colleagues, investors, journalists, and members of the public.
Once that message and narrative has been defined, they then must put the necessary communications infrastructure in place. That doesn’t mean creating a ‘PR campaign’ – it means setting up your shop window online with relevant and representative information in a subtle and quiet way, ready for when people search your family’s name.
Thankfully for families, there are now more options than ever before in their armoury which allows them to tell their own story and project their family brand in a controlled, delicate and sophisticated way.
Families should take advantage of controlled assets online and use them to curate a broad message for the family, their values, purpose, activity, and as an effective way of communicating their positive impact in the world.
Adopting this approach allows families to shape perceptions through a curated and controlled message, and it’s also a positive way of ensuring information about them is on the public record, meeting today’s demands for transparency and openness.