Protecting your wealth against the cyber stalkers, on your terms

It is a delicate balance that business owners, prosperous partners or major shareholders have long grappled with - how to be in the public spotlight but maintain privacy and autonomy.

The increasing digitisation of every facet of our lives has made everyone increasingly exposed to the threat of cyber theft. And the wealthier your are, the greater the target you are.

So what are the steps to be taken to ensure that you and your family's online lives remain safe and behind closed doors?

Identifying the risks

Effectively managing the security of your assets and personal data can be complicated, wherever you live. Roderick Jones, a former British detective who was responsible for countering national security threats, founded Rubica, a Silicon Valley-based company that helps wealthy individuals around the world counter cyber security and global threats. With the volume of data stored electronically, it is now easier for criminals to go after a person's personal information for cyber ransom, which will generate a high return on investment with little risk of being caught, he says.

“The economics of going after cyber hostages and the abundance of hacking tools on the dark web have shifted the landscape such that the mafia or even a smart young hacker in Russia now has the potential to make millions without the risk of getting caught," Friedman says. In 2016, Cybersecurity Ventures predicted that cybercrime will cost the world $6 trillion annually by 2021.
 

Simple steps

There are straightforward strategies to start to ensure your data is secure. Check what your phone is tracking and consider whether apps really need access to your microphone, contacts or location data.

Many people don't realise their wifi system for their home and family-run businesses may be vulnerable. Security companies now promote the practice of creating a private virtual network (VPN) that can be downloaded and encrypted as a secure app. This allows real-time monitoring to thwart potential cyber breaches in the network.

David Friedman, the co-founder of WealthQuotient, a company which trains professionals to engage with high net worth individuals, says social networks should be scrutinised to look at relationships and how they can be targeted for financial gain.

The EU's recent GDPR law was created in part to give consumers more of their rights back. Any security breaches that impact European citizens must be notified within 72 hours to a designated data protection authority (DPA) and must be reported to affected individuals “without undue delay".

Protecting your inner network

Limiting access to key financial information effectively builds protective walls around your data. That means only allowing selected wealth managers access to your financial statements and other confidential information, giving them the path to create a tailored wealth strategy that can improve the security and privacy of assets.

"In today's era of cyber attacks and privacy challenges, being intentionally proactive about keeping your information flow 'tight' is a sensible approach," said Thane Stenner, author of 'True Wealth: An expert guide for high-net-worth individuals (and their advisers)'.
 

Organising the information that is available online can go so far as to create guidelines on how to use geolocation tagging on social media - so your exact whereabouts aren't known. “You can't control your public image and there will always be public information, but what a family can do is build a strong cyber fortress and monitor their social media and especially their children's behavior on it," says Stenner.
 

Prudent philanthropy

Philanthropically need not mean the end of privacy. And adopting a more public image can be done while maintaining some level of privacy and peace of mind by having the right wealth manager.

Bill and Melinda Gates and Warren Buffett created The Giving Pledge, which now includes more than 180 wealthiest families from around the world. Lord Ashcroft, one of the members, has said his parents instilled a work ethic and social responsibility that eventually led to his commitment to philanthropy. After his death, his family will become the trustees of his namesake foundation so they will be able to "enjoy spending money on worthy causes" such as student scholarships, medical research or environmental causes in his memory.

Many donor-advised funds, which are growing in popularity, offer tax benefits and the flexibility to decide when and where to use the funds, while also protecting privacy. Established as a public charity, they allow donors to immediately receive tax benefits while still allowing donors to decide what charities and organisations are a good fit in the future.

Another option is to create a private foundation where the board can make charitable decisions on your behalf and grow its assets by investing in a variety of asset classes.

Finding a manager to trust

With an international presence and a local focus, Lombard Odier offers a global approach via a state-of-the-art single technology platform where you can view, analyse and manage your wealth seamlessly. Long-term relationships are valued over short-term profits, illustrated by the fact that Lombard Odier has been managing the wealth of our clients for generations, surviving 40 financial crisis and emerging stronger.

As current economic, social and governance models face significant long-term structural trends, in what we call the Sustainability Revolution, we know it is more important than ever to be prepared for privacy and security issues as we increase our digitalisation and connectivity.

Getting the right fit

Regardless of what avenue is used, using a dedicated team of wealth planners can tailor the management of wealth to local tax and legal issues, individual circumstances and country of residence, regardless of cross-country border concerns.

There is no one size fits all when it comes to wealth planning. Instead it should be planned with a purpose. Estate planning should be tailored for targeted impact based on lifestyle and specific life goals.

That's why combining the right blend of passion, strategy and structure can create the right legacy.