With increase in cyberattacks, wealthy families prioritize integrated protection
Geopolitical tensions, a rise in cybercrime and criminal activity overall, and growing media exposure mean that ultra-wealthy families need security now more than ever, said experts in the field. Advances in artificial intelligence and other sophisticated technologies are blurring the line between cybersecurity and physical security, they said.
“Physical security and cybersecurity are not separate entities,” said Matt Peters, vice president of protective services at Guidepost Solutions. “Their shared goals aim to prevent unauthorized access, damage and theft and ensure the well-being of individuals and asset owners.
“A breach in one realm can jeopardize the other."
Peters sees digital vulnerability as one of the top security issues for wealthy families. “We have seen a massive increase in nefarious cyber activity — including hacking, fraud, ransomware, data breaches and blackmail,” he said.
Families that have conducted comprehensive assessments of their security programs “are astonished at how much information is readily available” through public records, Peters said. “I’ve yet to see one family who does not have that one teenager or grandmother who does not overshare personal information on social media.”
Wire fraud “continues to be the major threat” in cybersecurity, said Stefan Ludlow, chief technology officer at Cerity Partners LLC. A fraudster will often hack a client’s personal email and find a history of frequent wire transfers, then wait for the next request to take place and pose as the client and change the recipient bank information through an email to the wealth manager, he said.
There’s “some visibility around AI voice impersonation for public figures,” Ludlow said, though he added that he has not yet seen this "in the wild personally.”
Christian West, an executive protection program architect at Executive Support and Logistics, said he hasn’t seen any security breaches involving AI, but it’s “definitely something that’s going to be exploited.” On the plus side, AI has made security systems smarter, he said.
Ramping up security doesn’t necessarily mean spending money on security systems, said Paul Viollis, CEO of Viollis Group International, a global intelligence, security and investigation consulting firm serving affluent individuals.
“It’s not about going out and hiring a protection team,” Viollis said. “It’s about understanding the risks that your general lifestyle brings and putting the preemptive risk mitigation measures in place.
“Really identifying whether or not a family or family members should be more closely examining their security measures starts with more closely examining their own lifestyle."
One measure everyone should take regardless of lifestyle is making sure that a vetting process exists for contractors and others with access to the family’s assets, security professionals said. In the physical world, that means knowing the workers who install security systems as well as anyone else who might be able to find a way in, they said.
Online, security starts with email. “Email is the pathway into your life,” Viollis said.
“If there’s a keystone to risk, it’s what the world can find out about you,” he said. “For a family office, if you’re having a liquidity event, how many people know about it? How much does the world know about what events you attend, your affiliations, your social media footprint?"
Security consultants can conduct a lifestyle vulnerability analysis — a “deep dive” into a family’s exposure, including monitoring of the deep web and dark web. Determining where the vulnerabilities are is the most cost-effective way to take the right steps, said Viollis.
How to find the right security consultant for the job
Referrals are the route most families take, but even so, “individuals need to do their own due diligence on potential firms,” said Peters of Guidepost Solutions. References for past work are unlikely to be available, given the need to protect clients’ identities, he said. But it’s possible to request insurance certificates and licenses as well as copies of nondisclosure letters and letters of engagement.
“Embrace the vetting process,” Viollis said. Crimes are rarely committed by strangers, so it’s important to make sure everyone with access to the family can be trusted, he said. A thorough background investigation is “not cheap,” he said, but it pays to make sure everyone who comes close to the family or the home is trustworthy.
“With things going on internationally, there are significantly more threats than there have been in recent years,” said Kevin Craig, assistant vice president at Porzio Compliance. That makes “situational awareness” key for ultra-wealthy families, said Craig, who recommends a security strategy that takes into account all potential vulnerabilities.
He recommends finding a consultant “who can interface with law enforcement partners domestically and internationally, as well as intelligence communities.”
Offline, security experts stressed the need for situational awareness at home and while traveling. Travel arrangements need planning, and even local trips like kids’ routes to school should vary from day to day so criminals are kept guessing, they said. And Instagram posts of vacations and special events can wait until the party is over.
It’s also important to make sure that home security systems are doing what they’re supposed to, said West. “Don’t just rely on what you bought a couple of years ago,” he said. “One of the things we see a lot is you buy a house that has relatively good security, and all of a sudden trees and bushes are covering the cameras.
“Security is, unfortunately, one of the things that’s here to stay, and it’s necessary. If you’re lucky enough to be in the ultra-high-net-worth space, you should always be vigilant.”