Poor risk management is putting many wealthy families in jeopardy of a host of dangers, including legal action, theft and even kidnapping, according to Harry Dawe-Lane (pictured), newly-appointed Aon ultra high net worth advisor.
Dawe-Lane, who joins Aon Private Risk Management to advise family offices around the globe, says as families get richer and their tangible asset bases grow, protecting these assets and liabilities through sophisticated risk management strategies becomes increasingly important.
"Roughly speaking, 75% of family wealth is in financial investments, but 25% is in tangible assets," says Dawe-Lane. "When you are talking about families that have hundreds of millions, then that's a sizeable exposure."
In his new role, Dawe-Lane is tasked with helping to identify exposures that families may not have previously considered. He says the dangers of risk stemming from non-executive directorships are considerably higher than many families realise. These issues can include liability from unfair dismissal or less favourable treatment. Dawe-Lane also warns that many families may not be suitably protected from exposure to kidnap and ransom, or the theft of their more usual assets, like the fine art collection.
"There has been a failure to deliver an integrated service and lack of value-added solutions in this area," he says. "In addition, there is a sizeable administration burden that is causing families and family offices a lot of grief."