Family offices often manage billions in assets, yet many remain surprisingly vulnerable to cyber threats. Clark Sandlin, who has spent over two decades protecting high-net-worth families through his firm Zyrka, reveals why these organizations need to radically rethink their approach to cybersecurity – particularly as threats grow more sophisticated and the line between personal and business technology continues to blur.
The Hidden Vulnerabilities of Family Wealth
Many family offices have more capital than mid-sized businesses, yet their approach to cybersecurity often mirrors casual home users rather than financial institutions. “They kind of treat it like home,” Clark explains. “Most people at home are not very cybersecurity aware, and it bleeds over into the family office. There’s so much intermixing between the business and the family office that the personal and business just merges together.” This casual attitude creates dangerous blind spots. While these organizations may have substantial wealth, they often underestimate their attractiveness as targets. “They’re like, ‘I don’t want to spend the money to secure us because nothing’s happened to me, nothing’s happened to us. We’re not vulnerable,'” Clark notes. “They get this ‘we’re impervious’ kind of thing. But it just hasn’t happened yet.”
Growing Attack Vectors
The threat landscape extends far beyond obvious business systems. Modern homes, especially those of wealthy families, contain numerous potential entry points for attackers. “Most of these high-net-worth families have automation at home. They have audiovisual, lighting systems, access control systems,” Clark points out. “When they are installing this stuff at their house, they generally just put in easy passwords. They sometimes don’t even put in passwords.” Even seemingly innocent devices can pose risks. “They never think about my kid playing PlayStation games and that could get hacked and get into my network,” Clark says. “If you’re accessing your office from home and your kid’s got hacked through PlayStation, they’ve got access to your computer and they can get back to your office through that network.”
The Travel Security Gap
Travel presents another often-overlooked vulnerability. “People are generally going to know what they look like, who they are, where their whereabouts are if they are tracking them,” Clark explains. “They think, ‘I’m not Elon Musk. I’m not a high-profile target.’ But they actually are because people look up who owns companies, who owns assets, where all their assets are.” This tracking can enable both cybercrime and physical threats. Clark’s firm has developed specific protocols for high-risk travel: “We have a policy for them that we just wipe their computers as soon as they get back and we have a backup, so we just restore all the data back to it.”
Building a Robust Defense
Family offices need to adopt enterprise-grade security standards, Clark argues. “They need to follow standards that a CIO would set. Creating a standard IT policy for your entire family, saying we need to make backups. We need to vet our third-party vendors’ cybersecurity IT policies.”
Key elements of a comprehensive strategy include:
- Data Backup Protocol: “It’s called a 321 backup – three copies of your data on two different physical devices and one in the cloud,” Clark explains. This approach protects against increasingly common ransomware attacks.
- Network Segregation: “You need to look at isolating your son’s PlayStation on a separate network so it doesn’t gain access to potentially private information,” Clark advises. “You contain them in an environment that does not touch your stuff.”
- Third-Party Vendor Management: “Most family offices have cleaning crews, they have their AV staff who comes in and services their equipment, they have their landscaping crew,” Clark notes. “What are these people doing about their cybersecurity? How are they protecting their data?”
Many family offices hesitate at cybersecurity costs until after an incident occurs. Clark goes on to say that, “Families are very cost-conscious when it comes to these kind of things because it looks like the price tag for cybersecurity is pretty expensive, but it’s 20-50 times more if you were compromised or hacked.” Through his firm Zyrka, Clark helps family offices develop comprehensive security strategies tailored to their unique needs. The process begins with a thorough assessment of all of the potentially vulnerable devices as Clark notes that, “We have a device we can set on their network that starts collecting data over a period of two or three weeks.”
To learn more about protecting your family office’s digital assets, connect with Clark Sandlin on LinkedIn or check out his website.
