Why Family Offices Are Unprepared for Rising Cyberattacks – and What They Can Do About It

Why many family offices are ill‑prepared

1. The typical family office is lean. It might employ only a handful of staff and rely heavily on a network of external advisers. Technology budgets tend to prioritise portfolio management tools rather than security controls. Many offices still use consumer‑grade e‑mail accounts, outdated operating systems or unpatched software. Without dedicated IT teams, basic cyber hygiene – such as regular updates, encrypted backups and multi‑factor authentication – can fall by the wayside.

A culture of privacy can also work against them. Wealthy families value discretion and often avoid public scrutiny. That ethos sometimes leads to a reluctance to engage with third‑party security assessments or to share incident details with peers. Attackers know this and exploit the gaps. Recent incidents include targeted phishing campaigns where attackers posed as trusted advisers to trick staff into wiring funds, and ransomware that locked down access to investment data until a ransom was paid.

Third‑party risk is another blind spot. Family offices connect to banks, brokers, law firms, tax specialists and portfolio companies. Each connection introduces another potential weak link. If a service provider is compromised, criminals can move laterally into the family office’s systems. Weak password practices, lack of network segmentation and remote work policies that mix personal and professional devices further widen the attack surface.

The consequences can be severe. Aside from the direct financial losses, a breach might expose addresses, travel plans, and security arrangements – information that could endanger personal safety. Reputational damage may affect deal‑making and philanthropic activities. Regulatory regimes, particularly in the United Kingdom and European Union, also expect organisations that handle personal data to follow strict breach notification and data protection protocols, with significant fines for non‑compliance.

Building a stronger cyber posture

The good news is that family offices can take practical steps to reduce risk without turning into banks. Start with a formal risk assessment that maps out where data resides and who has access. Adopt a recognised framework such as the National Institute of Standards and Technology (NIST) Cybersecurity Framework or ISO 27001 to structure a security programme. Enable multi‑factor authentication on all e‑mail, banking and cloud accounts, and enforce unique, complex passwords via a password manager.

Regularly update operating systems, applications and firmware, and back up critical data to an off‑site or cloud location that is segmented from the main network. Segmenting networks limits how far an attacker can move if they gain entry. Encrypt devices and use virtual private networks (VPNs) when connecting remotely. Commission periodic penetration tests and vulnerability scans to identify weaknesses before criminals do.

Equally important is human‑centred security. Provide staff and family members with training on recognising phishing attempts, using secure communication channels and handling sensitive documents. Implement policies for approving large transfers that require voice verification or dual sign‑off to prevent social‑engineering scams. Consider working with a reputable managed security service provider to monitor for suspicious activity around the clock.

Finally, plan for the worst. Develop an incident response plan that defines who to contact, how to contain a breach and how to communicate with stakeholders. Maintain cyber insurance to help cover investigation and recovery costs. Cyber threats will continue to evolve; testing these plans and revisiting them after significant life events (such as business acquisitions or international moves) ensures they remain effective.

Protecting legacies in a digital age

Family offices are custodians of both wealth and legacy. As cyber threats rise, ignoring security is no longer an option. By investing in appropriate technology, establishing robust policies and tapping external expertise where needed, family offices can protect their information and ensure they remain resilient. If you would like support in assessing your current posture or implementing controls in line with industry standards, please get in touch – I work with Microsoft Azure and security frameworks to help organisations of all sizes stay safe online.