How the Wealthy Can Use the '3 A's' to Protect Privacy

Beyond that is the inherent link between privacy and a family's reputation, which requires protection of private truths as well as a defense against falsehoods.

In addition, loss of privacy can lead to loss of freedom of expression, whereby some family members would feel constrained in what they shared about themselves. And — no surprise — many families want to keep private certain things that could embarrass or shame them if made public.

The paper notes that at a time when huge amounts of personal and business information can be hacked and sold, wealthy families and their family offices are potentially exposed to identify theft, fraud and safety risks.

The paper lays out a three-step framework–Audit, Assess, Action–family offices can take to protect families' privacy.

The first step is to conduct a privacy audit of a family's potential risk areas, mapping every person, asset and activity connected with the family. The family office can then identify private information that could be made public, and the way which that could happen.

Next, the family office should evaluate the likelihood of a family's privacy being breached. A potential threat involves these considerations:

• How close the family or family office is to the potential risk
• The potential risks of a particular family member or family office employee involved in the threat, given his or her track record and history
• How sensitive the threat topic is and the general societal mood and wider context

Such an assessment, regularly updated, enables the family office to identify where families may be vulnerable, which in turn will allow it to take a more nuanced approach that may also be less intrusive and more cost effective.

Acting on the results of the assessment is the final step. This often involves simple measures, such as pre-emptive briefings with family office staff and the use of nondisclosure agreements. Other privacy risks will require more robust interventions.

— Related on ThinkAdvisor:

• How to Protect Your Clients and Yourself From Cybertheft
• Financial Services Leads in Cyber, Privacy Risk Management: PwC
• 2 Common Email Spoofing Scams to Avoid: SEC