Why private investment firms of the ultra rich love WhatsApp

For investment firms of the ultra rich, WhatsApp is a one-stop shop for everything from vetting deals to finding the best surgeons.

Sam Nallen Copley, an investment advisor at a London-based family office, runs a 970-person WhatsApp group for single-family offices and has seen it all, from verifying credentials to finding co-investors to selling multimillion-dollar collections of dinosaur bones and Pokémon cards.

“If I need something at any time of day, I can message nearly 1,000 people about a new bitcoin fund or ask who’s the best tax lawyer in Germany,” he said.

Nallen Copley uses WhatsApp to organize meetups for the single-family office network he runs, Family Office Social.

The most valuable benefit is ferreting out scammers pitching deals, which is a common issue for family offices, Nallen Copley said.

“The family office space is the easiest area of finance to be a fake in. If someone turns up and says, ‘Hey, I’m worth a billion dollars in bitcoin,’ it’s very hard to prove one way or another,” he said. “Now the group is sufficiently large and powerful in the sense that we can sense check most things. Has anyone heard of this person? Has anyone ever done a deal with this person? If the answer is no, it will be quite suspicious.”

Family office professionals told Inside Wealth that WhatsApp is convenient for messaging on the go and with people in different time zones. They also appreciate its privacy and exclusivity, as WhatsApp messages are encrypted and you can only message other users with their phone number.

Many of these groups, including Nallen Copley’s, have strict ground rules against pitching products and deals and gatekeep against vendors or brokers. While financial firms like investment banks face steep fines for using WhatsApp, family offices generally aren’t subject to the same regulatory restrictions.

Robin Lauber, a principal of a Swiss family office, is a member of Family Office Socials and its WhatsApp group. Lauber said he prefers WhatsApp over email and LinkedIn, where he is bombarded with unsolicited investment pitches and scams.

“WhatsApp is easy to handle and convenient to manage,” said Infinitas Capital’s Lauber. “To be honest, I don’t read my messages on LinkedIn.”

Erin Harkless Moore, who oversees investments at Melinda Gates’ family office, Pivotal Ventures, said she is part of several groups where investment chiefs share deal flow, get advice on how to use artificial intelligence and ask for hiring help. Recently, members debated how to adjust their portfolio allocations given the exit slowdown and lack of liquidity on their venture capital investments.

“It’s nice to have forums of folks that are in the same industry as you are and doing similar work, just to see what they’re reading, or what they think is interesting,” she said. “I think it makes me a smarter and better investor.”

Using WhatsApp is also somewhat of a necessity for communicating with next-generation family members, according to Joshua Gentine, a family office consultant and third-generation heir to Sargento Foods. At 45, he describes himself as an “email guy,” but said he has a WhatsApp group for a group of six heirs who range from 21 to 35.

“We got to meet them there,” he said. “Emailing, especially with those … 35 and under, is really challenging.”

There are platforms designed for family offices and ultra high net worth individuals, such as Trusted Family and Forge, that enable messaging. But WhatsApp is used far more widely, with more than 3 billion monthly active users worldwide.

Michael Cole, managing partner of R360, an investment community for centimillionaires, said R360 has its own app primarily for events but that members still default to WhatsApp. It has WhatsApp groups for different affinity groups, like private aviation and outdoor adventures. The health, longevity and wellness group recently used WhatsApp to motivate one another during a fasting challenge.

Even though WhatsApp is owned by Meta, many members perceive WhatsApp to be more private than the platforms targeting them, Cole said.

“People like WhatsApp because there’s nobody — what I would call ‘big brother’ or the perception of a big brother — overseeing their communication,” Cole said. “They can establish a group any way they want.”

Cybersecurity experts warn that relying on WhatsApp comes with serious risks. Tony Gebely, of Annapurna Cybersecurity, said it’s more secure than texting (better known as SMS), especially between different devices like Androids and iPhones. However, he said, WhatsApp, which is meant for consumers, doesn’t have features like saving messages in the case of an investigation or lawsuit the way Microsoft Teams does.

And while the messages are encrypted, Meta can track the metadata, such as who you message and how frequently, he said.

WhatsApp messages are also stored on your device, which poses a security risk if it is stolen or lost. This also means that family offices can’t stop fired employees from accessing old messages, said Jordan Arnold of Jetty Partners. Arnold said he has seen spurned employees threaten their former employers with leaking sensitive messages.

Rather than trying to convince family offices to quit WhatsApp altogether, Gebely encourages clients to only use WhatsApp for nonsensitive conversations such as letting someone know they are running late for a meeting but not for asking for a wire transfer approval.

“They’re not a regulated entity, so they can do whatever they want,” he said. “People are going to use it for networking and seemingly innocuous activities, and I don’t think that we’re ever going to change that. But when it comes to business and running a family office, you can’t be using it on your day to day.”