For decades, you’ve been advising your client to legally hold some of their assets in an offshore account, and suddenly, someone leaks a treasure trove of “secret” information about legal and illegal tax shelters, not unlike the Panama Papers, possibly exposing your client’s private dealings to the public. And now, your client is panicking.
What do you do?
Paul Blanchard, managing director of Right Angles and a reputational advisor who lends his services to ultra high net worth individuals, tells his clients to be proactive. “Let’s do a blog post,” he often advises.
Getting all the facts straight and being open in any situation is crucial to protecting a wealthy individual’s reputation, he says. While blog posts on company “about us” pages rarely rack up page views—the information won’t necessarily draw attention to itself—these posts do serve as a record to point to if, at a later time, the reputation of a client gets called into question.
Obviously, client reputation management doesn’t fall under the purview of being a financial advisor. But if a client gets mentioned in a Panama Papers-esque leak or is just generally concerned about the reputational impact of their actions, including financial, then it may be time to recommend a client speak with a reputation advisor if they haven’t already been doing so.
But financial advisors should be aware: a team comprised of a reputation advisor, lawyers and a financial advisor may butt heads.
"Reputation advisors can also find themselves recommending different courses of action to financial advisors," Blanchard says. "Usually, the financial advisor will only be looking at the finances with no regard for the person's current circumstances. It's a problem of tunnel vision."
It may be natural for a financial advisor or lawyer to recommend clients simply not comment to the press or, in the case of a lawyer, sue publications looking into a client’s affairs. But reputation advisors, says Blanchard, recommend working with the press.
“When things go public, acknowledge it’s a story to journalists, but then work to mitigate it professionally,” says Blanchard. That means: avoid antagonizing journalists, offer additional information to rid a story of speculation, and soften the impact of something that can be perceived as damaging.
Much of a reputation manager’s responsibilities—such as monitoring a client’s public persona and working to build a reputation, or just keeping a client’s affairs private—don’t matter much to a financial advisor; but that doesn’t mean efforts on the part of the advisor can’t help their client’s cause.
"Financial returns are critically important for our clients, but it's vital to remember that when individuals' reputations are damaged this often impacts their financial credibility too," says Blanchard.
Posing a hypothetical scenario where clients worry about the reputational fallout of clubbing baby seals to death, Blanchard delivers his most basic advice, which can be can be useful to financial advisors managing a concerned client: “Just don’t club baby seals.”