The number of single-family offices dealing with security issues has drastically increased over the past two years as high-net-worth families become more risk conscious, according to a new survey.
About 80% of single-family offices now provide security services compared to 60% in 2009, according to a survey by Rothstein Kass Family Office Group. The survey polled 151 executive directors of single-family offices during the first six months of 2011 and compared the results to a 2009 survey.
The report, Safe And Sound-How Single-Family Offices Are Addressing Family Security, found nearly 90% of the executive directors feel security threats to their clients will continue to intensify. Dealing with those threats can involve anything from guarding online information to finding self-defense classes, they said.
At the same time security risks are increasing, the amount of wealth single-family offices are dealing with has increased from a mean of $236.4 million in 2009 to $415.7 million in 2011, according to the survey.
"Lifestyle services represent one of the fastest-growing segments of the single-family office, driven by an increasing demand for family security services," concluded Rothstein Kass, a consulting and advisory services organization.
"The strong consensus that risks to wealthy families are increasing suggests that those single-family offices that do not currently offer such services are already behind the curve," the survey said. "Many will take steps to introduce such services in the coming years."
The key concerns for wealthy families are trusting the wrong people (89.3%), identity theft (77.7%), property being vandalized or stolen (72.1%) and the threat of physical assault (70.5%), according to executives surveyed.
Most clients feel their wealth makes them a target (98.4%), and many have had to deal with security issues or know of other wealthy people who have had problems, according to the survey. "Current economic conditions and the availability of personal information on the Internet exacerbate concerns," the report concluded.
Family offices "are not dealing with family security challenges on a theoretical level-they are immersed in these concerns," said Bruce H. Rogers, chief insights officer for Forbes Media and an author of the report.
Most single-family offices are adept at handling identity theft threats, especially the potential financial consequences, and are developing strategies to deal with damages to reputations and invasions of privacy, according to the report.
Seven out of ten are empowered by their clients to protect property and the responsibility is growing to include services such as transportation services for valuables like jewelry and artwork and provisioning clients with high-security cars.
"As the single-family office is often the means for the very wealthy family to manage its personal affairs, the single-family office is often the conduit through which family security services are delivered," the survey concluded.
-Karen DeMasters