A raft of website operators provide a platform to the high-heeled to discuss finances
Will the ultrawealthy find their place in the social media explosion? A handful of entrepreneurs think so and are building businesses around it.
One such entrepreneur is Caroline Garnham. She started a web site, Family Bhive, in London three years ago as a “Facebook for the fortunate,” where those with serious cash could interact discreetly with the similarly well-heeled.
The site has since become a magnet for asset management firms, charities and lawyers, who use its restricted online platform to fish for well-heeled clients — members’ assets have to be professionally verified — and arrange social events or link potential investors to new projects.
Individuals use the service to catch up on chatter, arrange social calendars and exchange investment ideas. “It’s a way for naturally inquisitive and like-minded people to meet away from the glare,” said Ms Garnham, also an expert on succession and tax planning at the London law firm Lawrence Graham.
A raft of operators are coming up with their own twist in the sector. A few have moved into a niche between the high-net-worth set and the wealth management industry. The Bernard Madoff scandal shook up many wealthy investors, pushing them toward different forms of financial advice and the safety of being next to investors who are part of their community, in this case online.
“Social media is here to stay and it’s only going to get bigger for the wealthy,” said Stacey Haefele, chief executive of HNW, a marketing firm based in New York that advises wealth management firms and luxury industries.
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In addition, Ms Haefele said, the rich are typically early adopters of new technology, so a new breed of young, social-media-savvy millionaires will emerge from the coming initial public offerings expected from companies like Groupon, Etsy and LinkedIn, as well as from other investments in social media. The less fortunate could lose their shirts.
But not everyone is convinced that social media will play a transformative role. Joachim H. Strähle, chief executive of Bank Sarasin, the Swiss private bank and asset manager, said he had not witnessed any demand from his clients for social media tools.
“Wealthy clients generally look for privacy and don’t want to share data publicly, even if their anonymity is preserved,” he said.
Family Bhive is but one firm that has used variations on the same model to allow the wealthy to offer each other advice and tips and sometimes enter projects together.
In Britain, Peers and Pi Capital have focused on bringing together wealthy individuals to share ideas and projects. Another firm, Ecademy, acts as more of a business-to-business information network.
Pi has become something of an alternative investment club and a power network for entrepreneurs and business chiefs. The group, based in London’s swanky Mayfair district, was founded in 2002 by a Florida native, David Giampaolo.
It offers its 300 members — who pay £1,000 to join and £4,000 a year in fees — access to an exclusive network, forming a kind of private equity syndicate that invests on average £15 million, or $24.4 million, to £20 million a year.
Members have invested together in a number of deals, taking stakes in private companies in, for example, the health and fitness sector, biotechnology, gambling and transport. In so doing, they have been able to avoid the fees charged by brokers or advisers on more traditional deals.
©2011 The New York
Times News Service