Cybersecurity

Cybersecurity is the set of controls a family office uses to keep its data, identities, and payment authority out of the wrong hands. It covers accounts, devices, email, document stores, family office software, banks, and the people who can instruct a transfer. The threat is not abstract. Family offices hold complete pictures of wealth, copies of passports and trust deeds, and the ability to move large sums. They also tend to be small, trusted, and used to doing business by email.

Good practice is boring on purpose: unique passwords and a password manager, multi-factor authentication, least-privilege access, encrypted devices, verified payee changes, and a short list of who can approve what. Vendor security is part of the same job. A cloud platform, a law firm portal, or a bookkeeper's laptop is inside the family's perimeter whether the contract says so or not.

A policy that nobody tests is a document. A simulated phishing exercise, a restore test, and a written response plan are what turn the document into a control.

Why it matters for family offices

The office is a target because the payoff is high and the team is small. Business email compromise, fake invoice changes, and compromised adviser accounts are more common than cinematic hacks. One successful payment fraud can dwarf years of investment outperformance. Risk management that ignores this is incomplete.

Confidentiality is the other half. Beneficiaries, deal pipelines, and tax files do not belong on a shared drive with everyone in the operating company. KYC packs are gold to a fraudster. Access should follow role, not seniority, and leavers should lose access the day they leave.

Software selection is a security decision. Cloud-based family office software can raise the floor if the vendor is certified, encrypts data, supports multi-factor authentication, and logs access. It can also concentrate risk in one login. Due diligence should cover hosting location, incident history, export rights, and how quickly access can be revoked.

How it shows up in practice

An office of four people pays vendors from a shared inbox. A payment instruction arrives that looks like it came from the principal, with a new bank account "for this one transfer." The finance manager pays it. The money is gone.

After the incident the office splits the process: payee changes require a call on a known number, two approvers for any new beneficiary, and the principal's email is never the sole instruction channel. Multi-factor authentication is turned on for banking, the portal, and document storage. A quarterly access review removes an old adviser. The next fake email still arrives. It does not get paid.