In today’s increasingly connected digital landscape, cybersecurity has become a pressing concern for organizations of all sizes. Threats such as phishing, malware, and ransomware pose serious risks, with even a single breach having the potential to create operational disruptions, trigger financial losses, and cause lasting reputational damage. As new regulations and expectations emerge across regions including the U.S., the EU, the UK, the UAE, and India, organizations face mounting pressure to adapt swiftly and reinforce their defenses against an increasingly complex threat environment.
Amid this evolving cybersecurity landscape, wealth managers are particularly vulnerable. Many wealth managers operate under a false sense of security and become targets of cybercriminals because of the sensitive data and high-value transactions they manage. Their reliance on third-party service providers and the assumption they are secure further expands the attack surface and increases their cybersecurity risk.
However, despite growing cybersecurity risk and regulatory pressure, many wealth managers continue to overlook critical vulnerabilities.
Cybersecurity Blind Spots
Many wealth managers still hold misconceptions about cybersecurity, creating blind spots that increase cybersecurity risk. These often include:
- Believing small firms are too insignificant to be targeted: Smaller businesses often think they’re too small to be noticed by cybercriminals, assuming their limited size makes them less of a target, but this mindset can be dangerous. When companies believe they’re not at risk, they tend to invest less in cybersecurity, leaving critical gaps in their defenses. Ironically, it’s these very gaps that make them appealing targets. Attackers know that smaller firms are less likely to have strong protection in place, making it easier to breach and exploit.
- Assuming third-party vendors and managed services providers (MSPs) guarantee full protection: Businesses often assume that third-party vendors have strong cybersecurity policies and controls, but this assumption can be risky. Vendors may lack formal security frameworks, leaving organizations exposed to potential threats. This risk is becoming increasingly evident, a recent report found that breaches involving third-party vendors have doubled to 30%, highlighting the growing exposure. Companies must take a proactive approach by conducting thorough vendor due diligence to ensure their partners meet essential security standards.
- Underestimating phishing: Phishing is a critical threat that is getting increasingly difficult to identify. It often starts with a single careless click, triggering a chain of events that can compromise entire systems, sometimes before the breach is even detected. In fact, phishing is now the top way attackers gain initial access, costing organizations an average of $4.8 million per incident. For wealth managers and firms in general, the damage goes beyond financial loss, affecting reputation and client trust.
Addressing Blind Spots
Here are some simple, practical steps that wealth managers can take to strengthen their security and stay ahead of threats.
- Assess the current state of your program: Firms should assess their cyber program on a regular basis to ensure that policies, procedures, and controls remain up-to-date and ahead of evolving threats. This assessment can identify areas that need additional remediation, focus, or resources, and it allows the firm to have a baseline to measure and understand the program’s performance over time.
- Establish and reinforce good cyber hygiene: People are one of the weakest links in a firm’s cybersecurity defenses, and firms must actively work to train and prepare staff on cybersecurity threats. Staff should be provided with cybersecurity-related training at least annually to help them identify common attack tactics (e.g., phishing, social engineering) and understand the tools and resources available to them to help them prevent cyber incidents. This should involve guidance on how to report suspicious emails, the importance of keeping their accounts secure through multifactor authentication, and what to do if they believe they may have been the victim of a cyberattack.
- Vendor engagement and oversight: Maintain a strong working relationship with your MSPs and third-party vendors by conducting thorough due diligence before onboarding to assess their cybersecurity standards. Regularly evaluate their performance, audit their access to your systems and data, and ensure they take proactive steps to support your cybersecurity posture. Remove outdated or unused access to minimize exposure and maintain a secure environment.
- Establish an incident response plan: A well-defined incident response plan enables swift action during a cyber event, minimizing damage, downtime, and the spread of the attack. Regular testing and reviews help ensure the plan remains effective and teams are prepared to respond confidently.
Conclusion: Cybersecurity Starts with Small Steps
At the end of the day, wealth managers don’t need to be cybersecurity experts, but they must remain proactive. Whether it’s training staff, reviewing vendor access, or maintaining an incident response plan, small steps can make a big difference. By building good habits and staying alert, even smaller firms can protect what matters most: their clients, their data, and their reputation.
Protect What Matters Most: Your Clients, Your Data, Your Reputation
Cyber threats are evolving, and wealth managers can’t afford to wait. ACA helps firms identify blind spots, strengthen cyber defenses, and meet regulatory expectations with confidence.
Schedule a cybersecurity assessment today to uncover vulnerabilities and take the first step toward a more secure future.
To hear more from our experts, watch the replay of our recent webinar Are You Really Covered? Rethinking Cyber Risk in Wealth Management.