If You’re Hacked, Don’t Count on Your Bank to Make You Whole

Most people I talk to assume their bank or brokerage will make them whole if something goes wrong, like a hacked account, a fraudulent wire transfer, or a scam that seemed legitimate. That’s what I used to think, too.

When I left Wall Street to start my financial planning firm in 2016, I never expected cybercrime to become a recurring theme in client conversations. But over the years, I’ve sat with too many people dealing with the fallout of being hacked—lost account access, money wired to the wrong place, and months spent trying to recover funds that may never come back.

You don’t hear about it often because when it happens, people are embarrassed and feel like they should have known better. It’s not exactly something that they share on social media or at the family get-together.

But given the right circumstances, almost anyone can become a target. Cybercriminals study human behavior for a living. They exploit trust, urgency, and routine. And if you’ve spent years growing your wealth, you’re a more attractive target than you realize.

The numbers back this up. The IMF reports more than 20,000 cyber incidents in the financial sector over the past two decades. Among family offices worldwide, nearly half have experienced a cyberattack in the last one to two years. Among those managing over $1 billion, that figure climbed to 62%.

The lesson here isn’t that only the ultra-wealthy are at risk. Anyone with savings, investment accounts, or retirement assets has what criminals are looking for.

That’s why cyber hygiene belongs in every financial plan, right alongside insurance, estate planning, and tax strategy. It’s not just an IT problem, but a financial planning issue.

Consider Their Stories Your Wake-Up Call

An industry expert, Mark Hurley, runs a company focused on digital privacy and protection for families. He recently shared a few stories that got my attention.

One family had spent years planning to buy an apartment in Paris. During a trip, one family member used a public charging station and unknowingly compromised a device. Criminals got into their email, monitored their conversations, and learned everything about the upcoming purchase.

When the family arrived in Paris, the criminals locked them out of their email and sent a wire request to their advisor for $2 million. The advisor did everything right—scheduled a verification call and ran through the proper steps. But by then, the criminals had cloned voices using AI, gathered personal details from social media, and redirected the family’s cell communications.

After a lengthy process, the advisor had every reason to believe they were talking to their client.

Unfortunately, they weren’t; they were talking to hackers, and their client’s money was stolen.

Mark also described a researcher who lost $400,000 from a bank account after accessing financial information on public Wi-Fi while traveling. In another situation, a family lost $360,000 from a checking account through fraudulent transactions.

In both cases, the victims assumed the bank would make them whole, but it didn’t work out that way.

I’m not telling these stories to scare you. These stories are proof points. They show how cybercrime has evolved well beyond phishing emails into sophisticated operations that combine AI, psychology, patience, and careful planning.

The common thread is an assumption that the safeguards around their money were stronger than they actually were. These people weren’t careless; they were simply unaware.

5 Habits That Can Help Protect Your Wealth

You don’t need a computer science degree to protect yourself, but you do need to be diligent with good cyber hygiene habits.

Mark compares cyber hygiene to locking your front door. A lock won’t stop every criminal, but it makes you a more difficult and much less appealing target. When it comes to cyberattacks on your bank accounts, following these five cyber hygiene habits can be all that’s needed for a hacker to choose to go after someone else.

1. Use a password manager and unique passwords.

If you’re using the same password across multiple accounts, one breach can compromise everything. A password manager generates and stores a unique password for every account and will even notify you if you’ve reused a password. Your bank, email, cell phone provider, and investment accounts should each have a different password. If a criminal gets into one, they aren’t able to use the same password to get into the others.

2. Secure your devices.

Your phone contains access to most of your financial life. Enable automatic updates. Use a strong passcode, not a four-digit PIN. Review your privacy settings. Think of your phone as a digital wallet. You wouldn’t leave your wallet open and unattended on a restaurant table.

3. Use a VPN on public Wi-Fi.

Airports, hotels, coffee shops, and other popular public networks can expose your information to anyone paying attention. A VPN encrypts your internet traffic, making it much harder for someone else on the network to see what you’re doing. If you’re checking financial accounts while away from home, this is a simple, inexpensive layer of protection.

4. Create a dedicated recovery email.

Most accounts let you reset a password through email. Set up a separate email address used only for account recovery on your most important accounts. If your everyday email is compromised, this one step can block criminals from reaching your financial accounts.

5. Protect the accounts connected to your money.

Criminals often don’t start with your bank. They start with your email, social media, or cell phone account, then use that access to work their way in. Enable multi-factor authentication wherever it’s available. Add a security PIN to your cell phone account. These steps make it significantly harder to intercept security codes or impersonate you.

Cyber Hygiene Is Part of the Plan

Most people think of financial planning as investments, taxes, insurance, and estate documents. I’d add cyber hygiene to that list. I like to think of it as wealth protection. It’s not as complicated as it seems, though it does take some effort to set all of this up properly. I think it’s worth it to help safeguard what you’ve spent decades building.

That’s why we’ve partnered with Digital Privacy and Protection (DPP). Protecting what you’ve built doesn’t stop at managing assets—it includes understanding what can threaten them.

If you’d like to go deeper, I’d encourage you to watch our webinar, “The $2 Million Cyberattack That Started at an Airport Charging Station.” It takes a closer look at how modern cybercrime actually works, and what you can do to make yourself a harder target.

Sources:

Lake Road Advisors (LRA) is a virtual wealth management firm headquartered in Corning, NY, with offices in Ithaca, NY, and Vancouver, WA. Founded by Paul Sydlansky, CFP®, in 2016, it serves successful couples planning their next chapter—whether that’s retirement, part-time work, or a less demanding second act. Paul has worked in the financial services industry for 25+ years. Prior to founding Lake Road Advisors, he worked at Morgan Stanley in Manhattan for 13 years, where he was a senior-level manager within the Institutional Equities Department. In 2018, he was named to Investopedia’s Top 100 Financial Advisors list. Paul received a Bachelor’s degree in Economics from Marist College and holds an MBA from New York University Leonard N. Stern School of Business. Paul is a CERTIFIED FINANCIAL PLANNER® and a member of the National Association of Personal Financial Advisors (NAPFA) and the XY Planning Network. They can be reached by phone at the Corning, NY office at (607) 438-2914, Ithaca, NY office at (607) 463-8400, or Vancouver, WA office at (607) 292-2172 or at the firm’s website at https://www.lakeroadadvisors.com/

This material has been edited with the assistance of artificial intelligence tools. The information presented is based on sources believed to be reliable and accurate at the time of publication. This material is for educational purposes only and does not necessarily reflect the views of the author, presenter, or affiliated organizations. It should not be construed as investment, tax, legal, or other professional advice. Always consult a qualified professional regarding your specific situation before making any decisions.