As the number of millionaires in the world grows, so does the available targets for fraudsters, said the owners of a firm that focuses on assisting high-net-worth clients and family offices.
Protective measures—many of them based in common sense—need to be taken as wealth rises and high-net-worth families increasingly become the targets of fraudsters, Ken Eyler, CEO, and Joe Farren, president, of Aquilance, a financial services business consulting firm based in Trumbull, Conn., said in an interview. Aquilance works with entrepreneurs, heirs, athletes and other high-net-worth individuals and families.
“I try not to be an alarmist,” Farren said, but there are numerous things to watch out for in today’s world. “If something does not feel right, it probably isn’t.”
Wealth is on the rise in the U.S., giving fraudsters and thieves more targets, the two executives said. The Global Wealth Report from the Credit Suisse Research Institute said in its latest report that the U.S. saw the greatest year-over-year growth in the number of millionaires of any nation with nearly 22 million millionaires reported in 2021. Cyber attackers are acutely aware of this fact, with more than 25% of UHNW families, family offices and family businesses having been targeted in some sort of cyberattack at some point, according to a Campden Research study.
When it comes to online security, wealthy families and their teams must be extra vigilant to avoid becoming the next victim. There are simple measures that can be taken to prevent attacks, the pair said.
“If anyone approaches a wealthy person with a proposal, obviously, check it out first,” Eyler said. The same rules apply to the rich that apply to middle-market individuals. “On the computer, if you are an advisor or administrator, don’t let a client click on anything that is not a known quantity.”
A technique often used by fraudsters trying to install malware on computer is to send an email that looks like it is coming from a business associate or friend. “Dig deeper before anyone on your team opens an email,” he said. Malware can install programs that record keystrokes, giving an unauthorized person access to bank accounts and other financial data.
Before transferring funds of any amount, make a phone call to verify the transaction is legitimate, Farren said.
Some of the most notorious fraud attempts often revolve around art purchasing, charitable donations and gifting. Fraudsters will typically first attempt to defraud the family by a smaller amount ($1,000 - $1,500) then they go in for the big bucks a few months later, once they know they can get away with it, Eyler said.
A timely review of all data should be done. “If you find something suspicious within a months, you can fix it. If it is nine months later, it’s too late,” he added.