Wealth of Wisdom

CHAPTER 21Undertaking a Family Risk Assessment

Linda Bourn

A family risk assessment typically has three objectives:

• Understand each family's unique risk profile.
• Develop a plan to manage risk across generations and family holdings.
• Integrate risk planning into annual wealth and financial management discussions.

This process should include the family's relevant advisors, including the family office, wealth management advisor, estate planning attorney, accountant, and insurance advisor.

Using an established process like the one shown in Figure 21.1 may help families and their advisors to develop an integrated risk assessment and management plan.

Figure 21.1 Family Risk Assessment

Source: Alliant Private Client

Family Risk Awareness Survey

Families today are facing ever-more-diverse risks, from a global pandemic to hurricanes to cyber incidents. A short risk assessment survey can help family members understand and participate in the risk planning process. It may also help them develop a sense of their own risk concerns and their individual unique risk exposures.

Family Risk Assessment RankingWhat Keeps You Up at Night?	Rank 1 (highest) to 10 (lowest)
Personal Cyber Risk (Data breaches, malware and viruses, fraudulent credit and bank transfers, phishing schemes, etc.)	________________________
Natural Disasters Impacting Tangible Property (Wildfire, hurricane, earthquake, ...