Family Offices (FOs) are growing in Italy, with increasingly complex and heterogeneous structures, and are becoming key players in a silent yet profound transformation. Their external visibility and influence are growing as well.
The narrative around purpose, challenges, and successes, once reserved for family members or a very restricted circle, is now openly communicated to a broader community that increasingly recognizes Family Offices as desirable investors.
Transparency, sharing, responsibility, and integrity are values that strengthen reputation but simultaneously require stronger safeguards against risks that are not, at least apparently, directly related to investments.
While the use of digital technologies has enabled Family Offices to gain significant advantages in managing vast information flows more effectively, there is still a clear gap in awareness when it comes to managing reputational risks arising from business relationships.
Some data
The reports of the Family Office Observatory of the Politecnico di Milano, now in its fifth edition, offer one of the most comprehensive analyses of the global context in which Italian Family Offices operate, highlighting the macroeconomic, geopolitical, and regulatory challenges they face.
The 2022 report revealed a significant figure: only 4% of Italian Single Family Offices (SFOs) had adopted know-your-customer (KYC) procedures and tools, making them among the least used services.
In the 2023 report, some advisors began to emphasize the distinctive role of due diligence in preventing reputational risks.
In the 2025 edition, there is only a single reference to the opportunity of initiating reputational due diligence activities to mitigate this specific risk.
The UBS Global Family Office Report 2024 showed that only 24% of Family Offices globally identify reputational risk as a long-term risk factor, highlighting an issue that will necessarily become central to future investment strategies.
The 2025 UBS survey confirms that attention remains limited: only 31% of Family Offices have risk management processes that extend beyond investments and cover broader activities, including reputation.
As a result, focus often remains solely on financial performance, overlooking or underestimating the reputational and image-related damage that can arise from relationships of any kind with potentially risky counterparties.
Reputational due diligence as an identity safeguard
Family Offices protect far more than capital: they safeguard a legacy, a name, a history. Associating one’s name, and that of future generations, with questionable partners can have consequences that are difficult to contain.
This is even more relevant in a context where, in recent years, capital has increasingly been opened to external parties, generating major liquidity events. The proliferation of club deals, the search for unicorn startups or crypto assets, and the pursuit of traditional pleasure assets have all led to an exponential increase in relationships with a growing and often heterogeneous range of counterparties, significantly increasing risk exposure.
While decision-making authority remains with the family, a more risk-based approach is required. Data and information must be managed through more structured and formalized recruitment and decision-making processes, aligned with the necessary evaluation and mitigation of risks.
Our reputation also depends on the reputation of those we choose to work with. Damage caused by underestimating reputational risk can exceed purely financial or economic losses.
This is why reputational due diligence carries a weight that other categories of investors do not experience with the same intensity.
In short, reputational risk must be considered and assessed in a broad sense, as the set of critical issues that can negatively affect different dimensions, even independently (financial, legal, operational, etc.), compromising business integrity, the family’s good name, and stakeholder trust.
Beyond entry: post-investment monitoring
While reputational due diligence protects the pre-investment phase, monitoring safeguards continuity. An investment does not end at closing. On the contrary, some of the most insidious risks emerge after entry, making continuous monitoring a crucial process.
In fact, monitoring can be even more important than pre-entry analysis, because the target assessed today will not be the same six months from now: contexts change, people change, and priorities shift.
Effective monitoring helps identify early warning signals such as:
- abnormal changes in governance, ownership, or control
- loss of public reputation and local sentiment
- tensions along the value chain
- shareholder conflicts and litigation
Because reputation is not an attribute but a dynamic phenomenon, and associated risks often change form over time.
Monitoring should not be seen as passive oversight, periodic checks to verify whether issues are emerging. That would be a reductive view.
When structured in an advanced way, monitoring becomes a transformative tool, capable not only of anticipating risks but also of enhancing investment performance. It is the natural evolution of due diligence: from a preventive defensive shield to a strategic lever, a continuous reputational stress test.
A necessary choice for Family Offices
Recent high-profile scandals, startups that grew too fast, companies with opaque governance, market leaders that collapsed suddenly, show that failures are often not caused by accounting anomalies, but by the behavior of those who lead and surround the company.
It is therefore essential to go beyond purely financial metrics, analyzing the integrity of managers and shareholders, assessing past behavior and recurring patterns, and identifying weak signals that anticipate potential critical issues.
Reputational due diligence, both pre- and post-entry, should not be viewed as a cost but as a value multiplier, because it:
- anticipates risks
- protects the family name
- protects capital with intergenerational responsibility
Because it creates value, it does not merely defend it.
What we do at HinX
We increasingly support Family Offices in defining objective and formal decision-making policies for target selection, including the assessment of their networks and connections, ensuring alignment with the family’s reputation and objectives.
Through due diligence and specialized advisory services, we support the supervising committees of families and Family Offices. We offer tailored and scalable solutions, covering counterparty analysis and screening, as well as long-term monitoring activities.
Case studies
A preventable fraud
A Family Office suffered a €3 million fraud after investing in a company that included a well-known Lebanese fraudster among its stakeholders. We were involved after the fraud was identified. Our Hintegrity Wealth service, a smart, empowering solution, demonstrated that even a basic analysis would have identified critical issues in the counterparty’s background and discouraged the investment.
A fraud avoided
Our client, a Switzerland-based Family Office, engaged HinX for an Enhanced Level Due Diligence to analyze the network of personal and corporate interests of a potential aggressive buyer of a company belonging to the assets of a prominent Hungarian family. The analysis revealed serious reputational red flags.
The target had multiple criminal convictions in several European countries and two convictions in the United States for tax fraud and embezzlement, which still prevent entry into the US.
The background check also revealed a complete lack of entrepreneurial expertise, while the analysis of the target’s network showed stable relationships with other individuals affected by similar reputational issues.
