Family Offices Have Room for Improvement: Report 

Although the proportion of family offices underestimating risk has decreased to 30% from 42% in 2020, 33% report having a “reactionary rather than preventative approach,” up from 25%, according to global law firm Dentons in a survey of 202 individuals at family offices in 33 countries. 

Furthermore, nearly 33% cite a lack of family concern and awareness of risks as a key challenge. “This reflects wider deficiencies in the risk management culture that need to be addressed,” wrote Dentons. 

Many family offices consider technology as a “magic bullet” for risk management, with nearly 50% of respondents citing technology upgrades as the most important factor for updating risk programs. 

Only 31% of family offices have strong cyber-risk capabilities, and only 29% of respondents believe their staff training programs are adequate – despite the fact that 25% of North American family offices have been targeted by recent attacks, up from 17% in 2020. 

While nearly 50% of North American family offices had cyber insurance, compared to little more than 33% globally, Dentons claimed it discovered “insurance gaps” in other parts of the business, such as trustee insurance. 

Other areas for improvement include dealing with insider risks, such as those resulting from “negative publicity, scandals, or ethical lapses,” according to the report. For example, while 80% of family offices do pre-employment background checks, just 37% reevaluate their employees’ security profiles.