Privacy is often crucial to one’s security and safety, but in the age of social media it has taken on new meaning, with concerns about over-sharing and doxing — and, of course, pervasive cyber attacks.
When it comes to breaches of information, high-net-worth families require an extra layer of protection because the stakes are higher. They risk potential exposure to financial and reputational damage, at both the individual and corporate level.
That’s why they employ experts to protect themselves against such attacks and to deal with crises when they do occur. It’s just one aspect of the shifting nature of privacy protection that must be incorporated into family office systems.
Protection of privacy is a key role of the family office, says Douglas Byblow, president of the Toronto-based multi-family office Forthlane Partners.
“For family office executives, a big part of our stock in trade is the ability to function effectively and efficiently while still preserving the confidences,” he says. Byblow has nearly 30 years of experience working with family offices around the globe, and he’s heard many stories of families for whom privacy meant never seeing their name in the media.
“There is very much an art and science to how a family office can go about preserving and protecting the confidences at those highest levels,” Byblow says.
Times are changing, however. Members of the younger generation want to share information and network and collaborate with other enterprising high-net-worth individuals. That’s where privacy and confidentiality become inter-generational issues.
“It’s fraught with emotion because in some instances it can be seen by one family member who wants to utilize social media, for their own personal purposes, that the collective of the family is thwarting their ability to do what they want to do,” Byblow says.
“From the family perspective, that same individual can be perceived as the outlier who is either putting the broader family at risk — whether it’s safety or reputational or otherwise — and isn’t playing by the same rules as the rest of the family. So there can be a lot of interpersonal and intergenerational dynamics at play.
“It’s the kind of stuff that family offices thrive on. We love to be able to support the process of guiding and supporting family members. But it can be a tricky, challenging, emotional issue.”
We have monitoring tools to see whether a family member’s individual email address or password is on the dark web.Will Xiang, Richter LLP
Disclosing private information can pose a risk to an individual’s personal safety and expose him or her financially. But reputational management is also a key reason for adding layers of security to Internet accounts, cellphones and internet-of-things devices, such as Alexa and other virtual assistants.
Warren Buffett famously said it takes 20 years to build a reputation and five minutes to destroy it. With social media, the pace of destruction is the mere seconds it takes for someone to uncover an unsavoury detail or tweet out a bald-faced lie.
Some families who are mindful of their family’s “brand” have for many years been paying regard to how they are perceived within the media, and by their peers and the public, says Byblow. “Social media has only accelerated the process because there is so much information available, and it’s so much easier to access the information.”
Spyware on cellphones
London-based Schillings is an international law firm with high-profile clients whose focus is privacy, reputation and security. Schillings partner Peter Yapp leads cyber and information security, and he works with senior associate Sachin Bhatt. Their department of about 20 people works on cases involving extortion, investigation and cybersecurity. Yapp is also former deputy director of Britain’s National Cyber Security Centre.
They say they could write a 100-page manual on useful tips to keep wealthy family members from oversharing, but their point is to limit the spread of information from the get-go.
A proactive approach is far easier than trying to contain information, which, once released, is forever somewhere and could be sold on the dark web. Among the proactive protections are scanning cellphones for installation of spyware, which can be easily picked up through public WiFi, or advising clients to use password managers for all their passwords. Yapp says at the very least, passwords should be nearing 20 characters long and be made up of three or four random words, a different one for each account.
He said his firm often starts by asking clients about information that is already out there and whether it’s accurate, and if other family members take the same care with privacy and disclosure.
It can be a challenge, he says, because it’s difficult to explain to a 10-year-old that they can’t post a holiday snap that gives away the family’s location.
“On Twitter, YouTube, Facebook, Instagram and TikTok, there are a whole load of ways in which you can limit the spread right from the start, so that if you set it up properly it’s safer to post. Not completely safe, but there is a whole lot of stuff that is in-built that people don’t look at.”
Balance in media articles
If an article contains inaccurate or misleading information, Schillings works with publishers to remove or correct this content. Yapp said it’s standard practice for the firm to ask a media outlet to change a story or withdraw it altogether if it involves mental health issues or underage family members, for example.
“Or we might look at trying to get the balance right between the positive and the negative,” he says. “Maybe there isn’t enough information about that particular person. Maybe they have been very private in their dealings, and someone has written a defamatory article about them and there is nothing else, so there is a void there.”
Bhatt adds that because cyber-attack methods are evolving daily, the security process against them is also evolving. That means any process is only a temporary fix, which is why an ongoing cybersecurity team has become increasingly important for families of wealth and corporations.
“High-net-worth families, especially those that have spent time keeping details private and trying to stay under the radar, need to be extra cautious than average people who don’t worry about geo-tagging their holiday pictures, for example,” says Bhatt. “It’s all about building those levels of security up.
“I would expect a high-net-worth individual, for example, to have many more layers than someone who isn’t that concerned about protecting where they are off to a holiday or where they may have purchased a house, for example.”
Is your email address on the dark web?
Will Xiang, Toronto-based Richter LLP vice-president and cybersecurity expert, says he focuses on cybersecurity and privacy for families and multinational corporations.
A big part of his job is educating family members and executives without scaring them off the Internet, which isn’t practical. “We take what we know on the enterprise side and apply some of those lessons learned for families, because even though they may not see it, the threat actors are the same,” he says.
“We have scans for leaked credentials on the Internet … we have monitoring tools to see whether a family member’s individual email address or password is on the dark web.”
Oversharing on social media especially risky for the wealthy
Family reputation is everything: How to keep yours intact
Xiang gives a couple of examples of potential risks, such as the family that returned from a tour of Southeast Asia and Europe. A scan revealed that spyware had been installed on one of their phones. It could have happened at a hotel, he says.
“That happens to our executives as well.”
In another case, a client took stock market advice from a person he met through a social media platform who appeared to be a trusted advisor after he had established his credentials online and through contacts. He took the man’s advice and purchased shares, and the price went up. He bought more, and within a couple of hours the price crashed, a classic pump-and-dump scheme.
“I think a lot of times people are embarrassed that they were subject to these kinds of manipulations,” says Xiang.
“But they certainly are out there. Those are some of the stories we bring to families. We say, ‘You are essentially the blue whale they are targeting. Let’s put some controls and protections around you.’”