Luxury liabilities: Serving high-net-worth clients

Managing the lifestyles of the rich and famous has its appeal. You can make money while also getting a glimpse into a world most people never get to see. But not everything is glitter and gold. Though these engagements offer intriguing and lucrative opportunities, they also present heightened risks.

Imagine being hit with breaking news that your global pop star client is suing you for millions of dollars and that morning shows are airing clips of your client crying on stage as the anchor’s somber voice describes your actions as “the worst betrayal of trust the star has ever experienced.”

The pop star’s team wanted “full-service support.” At first, it sounded flattering. Eventually, it became perilous. The engagement letter was thin, written for wealthy but ordinary clients, not a global brand. It never said what you wouldn’t do. It never defined who actually made decisions. Every undocumented favor blurred the line a little more.

A high-risk investment imploded. Regulators flagged aggressive tax positions. Commentators mocked the “financial chaos behind the glitter.” Then the star’s inner circle closed ranks and turned outward, looking for a villain. “You had full control,” her lawyer says. “You were supposed to protect her,” says a family member. You had warned about risks, via buried emails and rushed phone calls. But warnings that live in drafts and half-remembered conversations do not compete with a crying celebrity on TV.

When wealth, fame, and vague boundaries collide, one misunderstanding can ignite a high-profile, high-dollar firestorm. According to historical analyses of accountants’ professional liability claim data, disputes with high-net-worth or high-profile clients (HNWCs) are a common driver of claim severity. HNWCs often rely heavily on their advisers, sometimes expecting support that goes well beyond traditional accounting services. This reliance, coupled with the complexity and visibility of their affairs, means accountants and advisers must be especially vigilant in managing these challenges.

Know the Client and Their Needs

Before taking on an HNWC, conduct adequate due diligence to understand who you will be working for and what is expected of you. Ask yourself if the services requested fit within your firm’s areas of practice and risk appetite. Assess the client’s background to determine their financial literacy and if they are prone to litigation or have had issues with their prior professional services providers. Reassess the engagement at least once a year, or more often if circumstances change.

HNWCs may request that services be rendered to multiple family members and trusts, which may cause conflicts of interest. Accountants may be asked to advise on transactions or structures that could benefit one family member over another, potentially leading to disputes or allegations of bias. It is important to establish clear policies for managing conflicts of interest.

Set and Manage Expectations

Set a clear scope of services

Some HNWCs may expect broad, informal support on anything from tax planning to concierge services. Clearly define and document the terms and conditions of the engagement, the scope of the services being performed, and the responsibilities of the HNWC. When the scope of services is not clearly documented, it is easy to misconstrue what the accountant has agreed to provide.

Document changes in scope appropriately

Claims can arise when annual engagement letters are not updated or revised, leading to scope creep or unclear responsibilities. During the engagement, services may evolve or expand. Be sure to document any changes in the scope of service.

Clearly communicate with clients

Engage in regular, documented communication with HNWCs. Regular communication helps keep expectations aligned. Try to maintain a healthy and appropriate professional distance from the client and be careful of informal discussions to avoid potential scope creep.

Consider loss-limiting engagement letter provisions

Having an annual engagement letter enables you to include other protective provisions to help insulate your firm from risk. Claim experience shows allegations often include mismanagement of money, poor tax or investment advice, and embezzlement. The complexity and scale of these engagements mean mistakes can have severe financial consequences. Consider including language in the engagement letter to limit the type of damages covered to direct damages only, and to cap damages at some multiple of fees paid to help limit your potential exposure. Consider alternative dispute resolution options to help avoid protracted (and public) litigation.

Be mindful of decision authority

HNWCs may travel frequently or be unavailable, expecting their advisers to make day-to-day decisions on their behalf. If you assume such authority, you may expose your firm to risk. Some professional liability insurance policies limit or exclude coverage for management duties, which can leave your firm vulnerable if a claim arises. If you agree to make decisions on the client’s behalf, document the scope of decisions within your authority and consult with an experienced professional liability insurance agent to ensure you have applicable coverage.

Operational Challenges

HNWC engagements are often managed by a senior partner with minimal oversight from others in the firm. The temptation to treat an HNWC’s interests as paramount may threaten professional objectivity. Implement firm controls to monitor relationships and performance of services, even for senior partners. Ensure all staff on these engagements are supervised and adhere to applicable professional standards.

A single misstep, whether a data breach, compliance failure, or dispute, can damage the reputation of the client and the firm. Make sure the engagement team stays current on regulatory changes affecting family offices, tax law, anti-money-laundering standards, and data protection regulations.

When a Dispute Arises

Should a dispute arise, HNWCs often have the time and financial resources to pursue protracted litigation and may not feel the same anxiety or pressure from the process as most defendants. They have the means to hire aggressive legal counsel who can drive up litigation costs through protracted pleading and discovery tactics. Such methods are often intended to delay the proceedings in the hope that they will financially outlast the defendant professional services provider.

Another factor driving up claim severity is that an underlying transaction involving an HNWC can have a significant amount of complexity that can make the determination of right and wrong a gray area. Meanwhile, arbiters of disputes (e.g., mediators, arbitrators, judges, and juries) can become fixated on the HNWC’s wealth, fame, or celebrity. This can cloud a realistic assessment of liability and damages, thus increasing exposure for the professional services provider.

At the inception of a dispute involving an HNWC, inquire, listen, and learn as much as you can about what is motivating the claimant. Until you know what is driving their passion to pursue a claim, you cannot hope to determine an appropriate path toward resolution.

In addition to monetary losses, a dispute with an HNWC can attract media attention and adversely affect the firm’s reputation. Manage the public relations angle and articulate your message, not only as a “sword” to assist in the resolution of the matter, but also as a “shield” to help protect the firm’s reputation.

During the Claim Resolution Process

When you understand what the claimant really wants out of a resolution, you can get creative with resolution strategies that can be seen as a “win-win” by the HNWC. For example, this might mean some element other than just monetary compensation, such as an apology, and/or other components that do not necessarily entail giving money directly to the HNWC, such as charitable contributions or scholarships in their name.

Red flag warning!

Over 50%: The percentage of large claims related to nonattest services delivered to high-net-worth or celebrity clients, according to a study by CNA, the professional liability insurance carrier of the AICPA Member Insurance Program.

Source: CNA Accountants Professional Liability Claim Database, underwritten by Continental Casualty Company. Copyright ^©2026. All rights reserved.

Nicole L. Graham, Esq., is a risk consultant at Aon. For more information about this article, contact nicole.graham@aon.com.

The information in this article is provided for general information purposes only and does not provide individual guidance on legal requirements. You should consult with your professional advisers before taking any action. While care has been taken in the production of this article and the information contained within it has been obtained from sources that Aon believes to be reliable, Aon does not warrant, represent, or guarantee the accuracy, adequacy, completeness, or fitness for any purpose of the information or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Recipients are responsible for the use to which they use this information.