The digital age has created an increasing area of risk that family offices need to address.
Although family offices have traditionally been highly secretive and private, a few factors could compel them to manage their brand and maintain an online presence. Converting to a multi-family office, for example, may require a public branding and communications strategy. Families involved in philanthropic efforts may also need to engage in media appearances and public relations to draw attention to the issues close to their heart.
A family office’s reputation and brand awareness could also have an impact on deal negotiations, talent acquisition and long-term performance, according to Ernst & Young’s Family Office Guide. Safeguarding the family’s reputation, especially online, should be a critical part of the modern family office team’s risk management strategy, the consulting firm says in the report.
“Families are concerned their social impact work and reputation is going to be drowned out by frivolous tabloid gossip and old news reports that may be less than favorable or inaccurate,” says Patrick Ambron, co-founder and CEO of BrandYourself.com, an online tool that helps people measure and manage their digital reputation.
In his opinion, software solutions for brand management are necessary for everyone who has an online presence. But family offices, wealthy investors and well-known entrepreneurs must go the extra mile to protect themselves because of the higher degree of scrutiny and risk they face.
A good example of how the internet can impact reputation is the case of renowned investor George Soros. Soros’ philanthropic work and political donations have made him the target of numerous right wing groups and rampant conspiracy theories online, according to CBS News.
Not all families appreciate this risk, but some who do are willing to pay upwards of $10,000 to hire a team of brand consultants, search engine optimization specialists, and software specialists to monitor their digital reputation and boost their profile through proactive strategies, according to Ambron.
He says family offices have often requested a more comprehensive and bespoke service that goes beyond the regular software tools developed by his company. “Sometimes they want to cultivate a certain image, but other times they want to deal with a reputational issue, like taking attention off a tabloid story about who a family member is dating.”
Outsourcing isn’t the only way to manage digital reputations. A study published by the Inesdi business school in Barcelona found that demand for communications directors and digital marketing professionals was expanding across all industries, including the financial sector.