The risks HNWs face today differ vastly from the ones they faced in the past, says Wesley Bull, founder and CEO of US-based security and risk advisory firm Sentinel Resource Group (SRG).
‘The most serious risks I see today are asymmetric,’ he says. ‘Very small, determined actors can apply outsized pressure on very large enterprises and highly visible individuals, often without ever crossing a traditional security threshold.’
Specialising in security risk intelligence and threat assessments for private and corporate clients, Bull has a firm grasp on the challenges wealthy individuals face today. With much of SRG’s workforce coming from US law enforcement, defence agencies and executive positions at wealth management firms, they are aware of personal, reputational and financial threats alike.
Much of Bull’s work is done to prevent risk from escalating, as opposed to having a reactive response. He says: ‘Once you truly understand that you can clarify your risks and make deliberate choices about capital, strategy and reputation, there is no being forced into reactive decisions by others.’
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The fundamental categories of risk that UHNWs face have not changed, argues Bull, with wealthy individuals still facing threats of physical harm, privacy loss, reputational damage and loss of assets. The difference today is that these risks are multifaceted.
‘A generation ago, personal risk was largely local and physical,’ says Bull. ‘Today, a family’s exposure spans jurisdictions, holding structures, digital footprints, social media, leaked databases, philanthropic work, political and regulatory touchpoints and the ecosystems of advisors and staff around them. Adversaries can synthesise an extraordinarily detailed picture of a life without ever being in the same country.
While this challenge may seem intimidating, Bull asserts that SRG takes a layered, thorough approach to ensure these threats are anticipated and dealt with.
‘Our first task is always to bring the client’s world into sharp focus,’ he says. ‘In our assessment engagements, we construct a bespoke threat model that is specific to the individual, the family and the enterprise.’
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SRG’s analysis examines states, regulators, counterparties, activist and media ecosystems, criminal networks and, in some cases, concerning individuals in the behavioural sense, all of whom could pose a threat to the client. These threats are then applied to the client’s life, from corporate structures and investments to philanthropy and even the household staff they employ.
‘In practice, we sit alongside many of the world’s leading law firms, tax practices, private banks and strategic advisers to the ultra wealthy,’ says Bull. ‘Our role is to integrate the threat picture across those disciplines and to convert it into clear, confidential guidance that allows clients to move with confidence.’
The difference between SRG’s corporate work and their private client advisory is that the latter can be much more personal, Bull states. On the corporate side, they help leadership to understand how threats could intertwine into supply chains, transactions and capital allocation, helping them to understand how effective governance can withstand these points of scrutiny. Private clients are increasingly exposed to smear campaigns and heavily funded litigation, which can have an additional emotional impact.
While different, these two levels of threat do overlap, says Bull: ‘The corporate entity and private life are not separate worlds. They are different expressions of a single risk picture. Our value is in seeing all of that as one system and shaping it in a way that is measured, discreet and sustainable.’
There are clear steps clients can take to mitigate threats and personal risk, says Bull. Firstly, obvious paths of attack can be reduced by implementing clarity in governance, disciplined information handling, robust verification for financial and legal instructions. Secondly, perform a formal behavioural threat assessment, so the client’s own actions do not escalate any situations further. Lastly, rehearse the response, as clients who have run thorough threat simulations know what it feels like to receive an unexpected call from a regulator, a credible adversary or an online campaign.
‘Good preparation does not mean attempting to prevent every conceivable event,’ Bull says. ‘It means making it very difficult for adversaries to achieve a disproportionate effect.’
With this myriad of risks and necessary solutions in mind, it is imperative for UHNWs to have an adviser overseeing their vulnerabilities to different threats, argues Bull.
‘What is still relatively rare is an integrated, intelligence-based view that cuts across corporate and private spheres and across advisory silos,’ he says. ‘It is quite common to find a client with excellent lawyers, bankers, tax advisers and security providers, but with no single, coherent picture of how an adversary might realistically come at them using that entire landscape.’
Many UHNWs value their privacy above all and Bull asserts that SRG builds a deep level of trust with its clients to effectively work in the areas most personal to them.
‘Over time, the relationship often becomes more expansive and more personal,’ Bull says. ‘We become one of the very few people a principal can discuss their real concerns with, without those concerns being amplified or misunderstood. That is a responsibility we take seriously.’
