“Simon! I’m so thrilled we’ve agreed a deal for such an iconic work of art. As I always say, we are not owners; but custodians. New bank details attached, just to be on the safe side. My regards to Amanda — and hope the kids’ colds clear up!”
An email like this nearly cost a wealthy British collector £6m. It had been sent to the family office that managed his finances by criminals impersonating a genuine art dealer, with whom the collector had been negotiating for a year.
“[The] client came screen to screen with hackers during a £6m transaction,” recalls Paul Westall, founder of Agreus, a British company that recruits staff for family offices. “All correspondence was via email — back and forth . . . When they had finally reached a conclusion on price, [the client] received an email to say something along the lines of, I hope the children are recovering from their colds — we have just amended our bank details for security and here they are.”
As it sounded like previous emails, the art-loving client replied. Fortunately, his family office then demonstrated its strength: a structure built on personal accountability. Someone at the office phoned the real dealer to check the transaction before approving a transfer.
It was then discovered that hackers had been monitoring all the email correspondence, learning to impersonate the tone and language used — even gleaning private family news and the names of partners and children.
Cyber security problems have multiplied with the rapid development of digital technology in wealth management. While the internet’s instant global reach has brought rich families many new investment opportunities, it has also increased exposure to cyber crime.
The Covid-19 pandemic, which has forced many rich people and their family office managers to work at home, has further increased the opportunities for fraudsters to exploit communications links.
“As we digitise and start working from home the vectors of attack have increased exponentially,” says Oliver Gregson, managing director of JPMorgan’s Private Bank in London. “There is much more prevalence over the Covid-19 pandemic.”
UK wealth manager…