High-net-worth families are often masters of managing their business risks. However, individuals that attained their wealth through a family enterprise often overlook or underestimate crucial risks outside of the business. Family enterprise executives are often knowledgeable business leaders and can easily navigate threats to their enterprise. Unfortunately, risks on a personal level or unrelated to business operations are a looming threat many high-net-worth families aren’t prepared to handle.
Failing to Plan for Future Generations
Nearly two-thirds (63%) of high-net-worth clients lack a process to educate the next generation about the unique risks of being part of a high-net-worth family. Worryingly, 76% do not conduct regular risk reviews with the family, while less than half (41%) 
hold ad-hoc risk assessments. A meager 24% review risks with their families at least once per year.
A Disconnect Between Business and Family Risks
High-net-worth business executives clearly understand the significance of identifying and addressing risks at a business level as they implement numerous risk mitigation processes for their enterprise. More than three-fourths (76%) have cybersecurity protocols to identify and reduce potential risks to their business, and 69% have continuity plans for unanticipated business disruptions. Additionally, 64% conduct enterprise-wide risk assessments, and half have policies to diminish them.
The disparity in risk preparedness at the family level leaves high-net-worth individuals dangerously exposed. For example:
- 59% do not have travel emergency plans.
- 62% are unprepared for natural disasters.
- 68% don’t have a plan to manage the family reputation.
- 81% don’t assess personal threats.
The easiest way to reduce family-level risks is to give personal and non-enterprise threats the same attention as business threats. High-net-worth families can conduct family risk assessments alongside their regular business risk reviews. Once identified, the families can then create protocols for reducing and responding to the risks should they occur. A comprehensive insurance strategy tailored to the family’s unique risk profile can also help address these threats. Contact Windermere Insurance Group to learn more about managing and mitigating risks at the personal and business level.