Family Office Connections: Managing Your Online Reputation
We are joined by Shannon Wilkinson, CEO at Reputation Communications, to discuss our family office risk survey findings. Listen now as we talk about peer network risk management, partnering with the right vendors, and reputation management trends and concerns.
Edward: Welcome to Family Office Connections. I'm Edward Marshall, managing director at Boston Private. Today we continue our series of discussions focused on the results of the Family Office Survey that we recently released. In that report, we asked over 200 family office executives to give us their thoughts on risk and threat matters they face every day. The results were illuminating, on one hand, answered a lot of questions that we had, but also posed some new ones and provided some unexpected insights into how family offices look and behave around risk management. These findings certainly opened new areas to evaluate and present opportunities for both the advisors to families and to the families themselves around how to manage and address risk more effectively. My guest today is Shannon Wilkinson of Reputation Communications. Shannon, listen, before we get started, give us a little bit about your background and then specifically if you could talk to your experience of working with family offices.
Shannon: Thank you, and thank you, Ed, for having me today. I've been in the online reputation management field for a decade. I founded Reputation Communications, and our first clients a decade ago included some of the top families in the Forbes 400 list. And what we found was that they were often the targets of defamation online of what we now call fake news. During the course of helping families like that, I became familiar with how their staffs were set up, you know. We usually interfaced with their representatives in their family offices and we also experienced high net worth clients who went from not having a family office to having one. During the course of this period, our primary role with such families has been reputation repair. We've also done a lot of audits regarding their privacy risks on the internet, and we work within a partnership of experts in risk mitigation and security. What's interesting about this and I think is very different from people who do not work with high net worth individuals or family offices is that the great majority of these partners are experts who came out of the State Department, the FBI, or the Secret Service where they were not only trained but they developed protocols in cybersecurity and personal security and privacy really on the highest level with presidents and their families and diplomats. So that is my background and that's why we're here today.
Edward: Excellent. Great. Well, let's dive into the report specifically around the two findings that we discussed. The first one is around family offices and a need to develop a peer network centered around risk and risk management. I know this is an area that you've experienced and heard feedback from your family offices' clients. And if you could give us your thoughts on that and where do you think that space is going?
Shannon: I think that your report hits the target and that so many family offices don't know and have relationships with other family offices, especially if they are, you know, spread out all over the world. They're not in a major metropolitan area like the Northeast where a lot of your surveys were done. And I think a contributing aspect to this is the high level of privacy in people who serve family offices. For people who work in family offices, they're not going to, you know, happy hours pre-COVID where they discuss what they do. It's a very private world. It's a very discreet world, and that's part of the challenge. But finding good vendors is clearly something that they seek, and they seek to learn from their peers. So clearly, your survey proves that there is a need for a network. I would say that there's also a need for a neutral credible network that does not depend on what we call pay to play as some of these organizations do that host conferences, you know. If they invite you to be a presenter to a high net worth family group or a family office, you might have to pay a fee to do that, whereas, in many conferences, you get paid a fee. And a concern about that is simply that it means family offices can't necessarily trust the information they're receiving from such networks. The value of having peer groups is that many, many vendors who serve family offices know each other. The security and the risk mitigation groups that I just mentioned is a very large network. These are people who've known each other for possibly decades. When we are referred to family offices or high net worth individuals, we're almost invariably recommended by a contact like that, and these are people who may have vetted us. They may have done due diligence on us, and that is something very important for the family office. So your report is definitely highlighting a very critical aspect.
Edward: That sounds like the experience of getting referrals from other family offices is something that you've experienced out in the marketplace for this. It's an interesting piece of data right there. I think the other finding that I'd like to discuss with you today is around getting better insight on the vendors that you mentioned as well. You know, if you're a family office, small or have been at this for multiple generations, you know, how do you determine what is a good risk management vendor? And on the flip side, how do risk management advisors make sure that they are able to tailor some of their services towards family offices?
Shannon: Well, what family offices need to be aware of is that there are a multitude of risk management consultants and firms and very fine ones. Some specialize almost exclusively in high net worth families and also high profile organizations, for example, perhaps a sports organization. So what they need to look for and can find are experts in risk mitigation who have a history and a track record of serving not just one or two family offices but possibly several. They have references. They vet everyone who works with them. Often, these people have the type of background I mentioned before. They have a background of possibly 20 years of risk mitigation on the very highest level which would be for presidents or prime ministers. And these people not only know how to vet their own employees, they do it consistently. And, you know, we speak with these people regularly because we have a network of them, and I can say that if they consider bringing us into some situation a family office might face. We have been vetted, they've looked at our bank accounts, they've done complete due diligence, certainly on me. We've signed nondisclosure agreements. You know, we may go through five background checks like that before we're even brought into a potential situation. And that is something that family offices should expect with every vendor they work with. On the bright side, as I mentioned before, many vendors in this space have a specialization. They understand the family office. They understand the unique challenges that high net worth individuals and their families face.
Something else I think is very important is as everyone knows, there's a lot of negative bias in our culture today toward wealthy people. You know, there's so much disparity economically right now and what a family office doesn't want is a vendor that holds that type of bias or has employees that do. So the benefit of working with vendors who have a track record of serving this type of constituency is going to be safe for all round. So, I believe that referrals are the best way to find, you know, a pool of vendors from which to choose because once you find a pool that's appropriate for your needs, say risk mitigation. The other important aspect is, you know, do they resonate with you? You know, is this someone you want to have a relationship with? You know, a lot of it is personality. I mean, there's one very well-known character in the space who specializes exclusively, and I would say ultra net worth people, you know. He's based in Texas appropriately, and, you know, if there's something that your client needs, that your family office needs in this particular risk mitigation sector, you know, this is the man that you want. And if he's not quite the right fit, if you need other services, he's going to know every conceivable provider that you should know about. And there are many people like this in the space. So I think it also comes back to creating a peer network that is neutral, that is credible, and trustworthy, enabling family offices to glean from each other, you know, the best in their field providers that they're using.
Edward: Thanks, Shannon. And I'd say that if you wouldn't mind, give us some of your thoughts on reputation management and some of the trends that you've been seeing with family offices. What's resonating now, and what are some concerns that family offices should be aware of?
Shannon: Well, we see a few different trends. The biggest one is privacy because if you have certain types of privacy exposure, it can impact your reputation or just call too much attention to you. And I'll give you one example. You know, often in the family office field, someone may suddenly become quite wealthy. Perhaps they sell a company or there was an inheritance and they don't yet have a family office. So, suddenly they need to set up a family office, and before they get to that step or as soon as they do, a very critical factor is to protect their privacy and their security. If they live in a place like Boston, or Washington DC, or Los Angeles, it's easier for them to do that because any professional they work with in setting up a family office knows what to do. But, you know, often these people are out and they live in a rural area. And it's very hard to conceal your privacy if you've just sold a company for $300 million, and you're living out in the middle of some bucolic setting. You want to be able to do that simply so that people do not know where you live. They can't find satellite pictures of your home online. They can't, you know, try to break into your home because if something like that happens, it can have a reputation impact, and, of course, as we all know, many family offices include adolescents and teenagers. They're active on social media, and unfortunately, even though everyone knows you shouldn't say certain things on social media, they do. They say things that might be interpreted the wrong way on what they think are private chat rooms. They share inappropriate photographs, and if they're underage and they're doing that, this can create tremendous reputation damage for decades. It can involve investigations and all sorts of things.
Something we see very commonly with family offices are when a relationship is severed, whether it's a romantic relationship or a professional relationship, you know, maybe a family office let's go a long-standing staff member, or the family let goes, you know, a house manager or something of that nature. It's not uncommon for such people to create blogs in which they reveal inappropriate personal information about their former employers and certainly about their romantic partners. They often will try to extort them. So those are the types of reputation risks that we see, and I will say that we've done investigative looks at the social media use of teenagers before they apply to college, and we've just done this, like, as a favor, you know, to someone in a family office. And sometimes what we see is we see social media posts that they did not write but they shared that might be interpreted as being racist or sexist or harmful by Harvard or Wharton or another school they might be applying to. So, you know, all of these are issues that they face.
The last thing I'll mention is because family offices prize privacy, generally, they do not want any exposure on the internet. The majority of these people want to be low-key. They want to be off the radar. They don't want anything about themselves on the internet. And as a result, they may not have gone through a process of protecting their name on internet platforms. As an example, yourname.com, which you can buy for $12 on googledomains.com. Unfortunately, high net worth people, family offices, if they're high profile, if they're active in politics or they support a charitable initiative that, you know, upsets people, we've seen perpetrators actually reserve their name.com if it's available or their name as a Twitter handle, and then will create websites that either pretend to be them, and Twitter feeds that pretend to be them or that publish embarrassing and inappropriate information that's intended to harm and minimize their credibility. So family offices need to be very proactive in registering the usernames of the family members and just protecting them so no one else can.
Edward: Perfect. Well, thank you, Shannon. I really appreciate you joining me today, and to the folks listening, if you'd like to get in touch with Shannon or if you have any questions, do send us an email to [email protected] I'd also recommend that you check out our website. You can find numerous resources, download the paper that we've been discussing, sign up for our newsletter, get this podcast, and much, much more. That website is bostonprivate.com/familyoffice. Be sure to subscribe to this podcast on Apple, Spotify, or wherever you prefer to listen. That's it for today. Check back for a new podcast next week. Bye, everybody.
Surveying the Risk and Threat Landscape to Family Offices
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