For some time, many financial services providers are extolling the virtues of state-of-the-art credit monitoring support. Recently, that phrase has all but vanished from the sector. The reason for the change is quite simple. As a solution for most Americans – and all ultra-high-net-worth families – credit monitoring is woefully inadequate. As hackers become more brazen, billionaires and other high-profile individuals are flocking to specialty providers and family offices for assistance.
"In essence, family offices are about protecting fortunes and legacies. More than ever, that involves helping families safeguard assets and reputations amid a sometimes chaotic digital economy," said Evan Jehle, partner and head of High-Profile Client Solutions at Flynn Family Office (FFO). "At best, credit monitoring is a guest registry for criminals to sign when visiting your accounts. Even worse, the family may still be oblivious to threats arising from problems with vendors, e-tailers, or employers."
One increasingly popular solution, particularly among the very wealthy, is credit blocking. This program prevents anyone from opening new lines of credit in the person's name without first lifting the block.
"Being rich and famous can solve a lot of problems, but may also present huge challenges in creating cyber-security strategies. The fight never ends," said Anthony Davenport, CEO of Regal Financial. "In fairy tales, the big bad wolf might go home dejected because you put up a brick wall. In real life, cyber-predators come back smarter and more determined. To stay one step ahead, some ultra-wealthy families are actually employing hackers to test systems and report weaknesses."
Cyber-security is a front-line concern for the financial elite and consequently the family office sector. As is often the case, family education is the aspect most commonly overlooked.
"Family offices need to understand how their clients are using technology to facilitate financial and lifestyle objectives to assess the threats. It's still surprisingly common for these families to share private and confidential information on social media, for example. The best cyber-security solutions in the world will fail if the risks are not fully appreciated," explained Jehle.