The alarming cyber threat facing family offices and high net-worth individuals

In today's complex digital age, cyber threats have become an inescapable reality for businesses and individuals alike. For family offices and HNWIs, however, the stakes are especially high, as they present lucrative targets for cyber criminals seeking financial gain or sensitive information.

We look at the cyber risk challenges encountered by family offices and HNWIs, whilst providing some key proactive measures necessary to safeguard their assets and reputations.

Family offices and HNWIs possess substantial financial assets - making them prime targets for cyber criminals seeking large payouts through attacks, data breaches or other malicious activities. Their unique personal information holds immense value, and if compromised can be sold to the highest bidder or used for identity theft, fraud, and even extortion.

Beyond financial motivations, cyber threat actors have been known to target family offices or HNWIs for political, ideological, or even personal reasons, seeking to cause reputational damage or disrupt their operations. With generally lower levels of security in place compared to corporate counterparts - combined with the interconnected nature of their offices - family offices and HNWIs stand as attractive targets with a wide range of potential vulnerabilities.

Family offices and HNWIs are known to be targeted by a wide array of malicious actors spanning petty and organised criminals, ‘hacktivists’, insider attackers, and in several cases state-sponsored actors.

The variety of threat groups is matched by an equal diversity in attack types, yet the most prevalent types are as follows:

• Phishing attacks: attackers send fraudulent emails, texts, or messages to family offices/HNWIs to trick them into revealing sensitive information - such as log-in details and financial information – or to introduce malware 
• Ransomware: malware is used by the attacker to encrypt family office/HNWI data and systems, rendering them inaccessible until a ransom is paid, often in untraceable cryptocurrencies
• Social engineering attacks: manipulative tactics are used to exploit the human psychology of the target, to trick them, and to facilitate the compromise of family office/HNWI devices, systems, or data
• Insider threats: employees, contractors, or service providers with access to sensitive information can accidentally or maliciously facilitate a compromise of family office/HNWI systems or data
• Advanced persistent threats (APTs): sophisticated, well-resourced threat actors, including nation-states and highly resourced cybercrime groups, have been known to conduct prolonged, targeted campaigns to infiltrate family-office systems

Mitigating these cyber risks requires a proactive, multi-layered approach that spans people, processes, and technology across a family office or HNWI estate. Here are some essential defensive measures for family offices and HNWIs, among others:

• Regular risk assessments: conducting periodic risk assessments – a process of closely examining your key assets, threats, and vulnerabilities - can identify weaknesses within your infrastructure, applications, and processes, enabling timely remediation
• Cyber awareness and training: educating yourself, the members of your office, and your key partners about cyber threats, best security practices, and necessary security behaviours is paramount. Regular training – from security coaching to incident simulation exercises - can enhance your vigilance and preparedness
• Robust access controls and authentication: ensuring strong access controls – embracing methods such as multi-factor authentication and privileged access management - can significantly reduce the risk of unauthorised access and data breaches
• Advanced threat detection and response: for large family offices and HNWIs with complex digital estates, deploying advanced security solutions, such as extended detection and response (XDR) and managed detection and response (MDR), can aid in identifying and responding to cyber threats promptly
• Data encryption and backup strategies: encrypting your sensitive data at rest and in transit, as well as maintaining secure, offline backups, can mitigate the impact of ransomware attacks and data breaches
• Incident response and crisis management: having a well-defined incident response plan and crisis management strategy in place can minimise the impact of a cyber incident and facilitate a swift, coordinated response
• Third-party risk management: carefully vetting and monitoring your third-party service providers, advisers and vendors for their cyber-security posture and adherence to best practices is crucial to mitigating supply chain risks

While no defensive measure can guarantee complete immunity, a layered, risk-based approach tailored to the unique needs of family offices and HNWIs can significantly enhance cyber resilience and mitigate the devasting impact of cyber incidents.

At Evelyn Partners, we understand the unique challenges of navigating this complex cyber security landscape. Our team of experts provides tailored solutions and support, helping you fortify your defences and safeguard your assets.

A special thanks to Callum Maxwell, Senior Manager in the Cyber security team, for his valuable contribution to this article.