3 Risks for UHNW and HNW Individuals

January 29, 2024

3 Risks for UHNW and HNW Individuals

Being a HNW Individual has its advantages, but also comes with risks. Having a high status does not eliminate outside threats. In fact, it can actually make you a larger target to criminals. It is crucial for these individuals to be aware of the risks that come with status and wealth. Let’s go over the 3 major risks pertaining to reputation, health, and burglary. 

Reputation 

As a HNW Individual, there is responsibility to uphold a positive reputation, whether that be your family legacy, your professional status, etc. You are under more surveillance than the average person, and most likely held to a higher standard than most. Your opinions, views, and actions may be scrutinized by media outlets. Even simple mistake or misunderstanding can be blown out of proportion, harming your reputation. To lower risk of reputation loss,  HNW individuals should be very careful about what they post, what they communicate and who they communicate to, and how they come across to the public. 

Health 

HNW is commonly accompanied by stressful lifestyles, high-risk activities, and busy day-to-day schedules. All of these can result in heightened cortisol levels, lack of sleep, mental health struggles, and little to no time to focus on self care. This can increase the risk of health complications. To prevent the risk of health complications from arising, HNW individuals should prioritize self-care, pay attention to changes in health, both mental and physical, set boundaries, and seek professional help when needed. 

Burglary

HNW individuals may be at higher risk for burglary for two reasons. The first reason being their wealth and valuable assets. Burglarizing a HNW household is more likely to score a criminal high-value items compared to a low income or middle class household. The second reason being media exposure and public attention.  HNW individuals are often in the public eye. Criminals can leverage information from insiders or or media outlets to target these individuals. To lower the risk of burglary, HNW individuals should always be aware of who they surround themselves with. A home security system or personal security guard are two great ways to protect yourself from burglary.

 

Risk Management 

These are just a few of the risks that are associated with being a HNW individual. One cannot eliminate risks, but you can lower them by practicing risk management.  Risk management is the process of identifying, evaluating, and managing risks. Having a proactive security plan for  your home, health, and cyber networks will provide protection from threats that are hard to avoid in today’s world.  

 

SAG Is Here to Help

If you are a HNW individual in search of customized security solutions, Strategic Advisory Group can help. Our team of experts, committed to confidentiality and excellence, will cater to your unique circumstances and mitigate risks. Call SAG at +1 (203) 489-5592 for more information.   

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Are Wealthy Individuals at Higher Risk for Victims of Identity Fraud?

Wealth is typically associated with power, happiness, and freedom. However, wealth does not make you immune to cyber crimes. A study was done by Experian, a fraud protection services company, comparing incident reports of identity fraud, with demographics. A significant association was found between wealth and higher incident of identity fraud.

This association may be surprising to some, as a common assumption is that cyber criminals target victims with poor levels of security. However, it is less about the ease of committing identity fraud, and more about the level of reward that results from it. Targeting UHNW and HNW individuals, regardless of the extra time and resources it takes, can result in a larger “win” for the cyber criminal. Let’s look at the likelihood of identity fraud based on different demographic categories from the Experian Study.

Likelihood of Identity Fraud Based on Demographic Category

The Experian study looked at three demographic categories, “Affluent Suburbia,” “Upscale America,” and “American Diversity.” Let’s dive into each one.

"Affluent Suburbia"

“Affluent Suburbia” consists of people living in the wealthiest households in the United States. These households are typically in luxury, suburban neighborhoods. Compared to a general population of credit applicants, this demographic category is 43% more likely to be victims of identity fraud.

"Upscale America"

“Upscale America” consists of families with an “upscale income,” comfortable lifestyle, and large homes. Compared to a general population of credit applicants, this demographic category is 22% more likely to be victims of identity fraud.

"American Diversity"

“American Diversity” is a group of people with middle-class incomes, typically from “blue-collar service-industry jobs.” Compared to a general population of credit applicants, this demographic category is 13% more likely to be victims of identity fraud.

Trust Strategic Advisory Group

Based on the data from the Experian study, wealth does not grant you immunity from identity fraud. The “Affluent Suburbia” demographic group has the highest likelihood of  identity fraud victimization, while the “American Diversity” demographic group has the lowest. Based on this, the wealthier the demographic group, the higher the risk for identity fraud victimization.  This blog covers some of the precautions high-net-worth individuals, such as the “Affluent Suburbia” demographic, can take to lower risk of cyber crime. For other security solutions such as cyber investigations, advanced encryption, 24/7 monitoring and support, and more, contact SAG at +1.203.489.5592 

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High-Net-Worth Households: 3 Precautions to Avoid Cyber Crimes

There is more to protecting your household from crime than installing security systems, gate codes, and motion sensor lights. A type of household crime that is easily overlooked, is cyber crime. Cyber crime can consist of identity fraud, hacking, malware, and more. Establishing a cyber security plan is crucial, especially for high-net-worth households who are at higher risk for cyber security threats. 

According to a Campden Research Study in 2017, 38% of ultra high-net-worth families do not have any form of cyber security in place.

This 38% is at an even higher risk for cyber crime than the average household. Here are some ways for high-net-worth households to protect themselves.

Limit Public Information on Social Media

Social media and public records contain information that can aid cyber criminals in their attacks. Using this information to conduct cyber attacks is also known as “social engineering.” Posting about your luxury lifestyle allows cyber criminals to infer your net worth, and make you their target for cyber attacks. The higher-net-worth households pose greater gain for these criminals. To limit this risk, set clear boundaries within your household for what is and what is not allowed to be posted. 

Limit the Network of People Who Manage Your Funds

High-net-worth households typically consist of individuals with demanding schedules. It is common for these households to hire a financial team to manage their wealth. This can be helpful, but risks miscommunication. High-net-worth households need to have a strict plan in place of what needs to be verified and what is allowed to be approved on their behalf. Without these guidelines, there is room for third party hackers to get ahold of information. 

Use a Hotspot for Wifi in Luxury Locations

One way for cyber criminals to target high-net-worth individuals is to hack into the unsecure wireless networks in luxury places like high-end restaurants or hotels. Cyber Criminals assume that the guests of luxury restaurants and hotels are wealthy. Rather than logging into these open wireless networks, use a hotspot that you can ensure is secure. 

Contact Strategic Advisory Group

High-net-worth households are at a disadvantage when it comes to cybersecurity threats. To avoid these attacks, it is important to be aware of the strategies hackers use to commit these cyber crimes. Strategic Advisory Group offers discrete services such as comprehensive risk mitigation, catered to Ultra-High-Net-Work and High-New-Work Individuals. Call us today at +1.203.489.5592 for more in depth information on our services. 

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