The office manager uses a chatbot to summarize a trust
document. A family member asks a free AI app for advice on a private matter.
The controller gets a voicemail that sounds exactly like the principal, asking
for a wire before the end of the day. All 3 involve AI, and the office may not
hear about any of them until something goes wrong.
That's why an AI policy for family offices has become a
basic control. Family offices exist to protect a family's wealth and privacy.
AI tools can expose both, through the data people type into them and through
the fake voices and videos criminals now build with them.
This guide is for family office directors and COOs,
including family offices here in Chicago. It covers why you need a policy now,
what it should say, how to protect the principal's data, how to verify requests
when AI can fake a voice, who should own AI decisions, and how to train staff
and family members.
Why does a family office need an AI policy now?
A family office needs an AI policy now because staff and
family members are already using AI tools, often on personal accounts, with
sensitive personal and financial information. Without written rules, the office
can't control what leaves its systems, which tools are safe, or how to respond
when AI is used against the family.
AI use is already widespread. In Microsoft and LinkedIn's 2024 Work Trend Index, 75% of knowledge
workers said they use AI at work, and 78% of those users bring their own AI
tools. Verizon's 2026 Data Breach Investigations Report found
that 67% of users reach AI tools through non-corporate accounts on corporate
devices.
The privacy risk is specific to families. J.P. Morgan
Private Bank describes a case where a family couldn't
explain how its private information had ended up online, until it learned a
family member had been using a free AI app as a therapist. In a family office,
the people with the most sensitive information aren't always employees.
Skipping governance has a cost. IBM's 2025 Cost of a Data Breach research found that
63% of the organizations studied had no AI governance policies, and high levels
of "shadow AI" (unapproved AI tools) added USD 670,000 to the average
breach cost.
What should an AI policy for family offices cover?
An AI policy for family offices should cover who it applies
to (staff, family members, and outside advisors), which tools are approved,
what data can never go into AI, how AI output is reviewed, how payment and
identity requests are verified, and how vendors' AI use is checked. For most
offices, 2 to 4 pages is enough.
A structure that fits most family offices:
·
Scope.
Employees, contractors, and family members who use office systems or handle
office information.
·
Approved
tools. A short list of approved business tools, with personal and free
accounts off-limits for family or office data.
·
Data that
never goes into unapproved AI. Account numbers, tax records, Social
Security numbers, medical information, home addresses, travel plans, deal
terms, and personnel files.
·
Human
review. A person checks AI output before it reaches a bank, an attorney, a
tax filing, or a family member.
·
Verification
rules. Payment requests and changes to bank instructions get verified by a
callback to a known number, no matter how real the request sounds.
·
Vendor AI
use. Ask banks, custodians, attorneys, and accountants how their teams use
AI with your family's information.
·
Incident
reporting. Who to call if someone pastes the wrong thing into the wrong
tool, or gets a suspicious request.
For the general version of this structure, see our guide to
an AI policy for small business.
How do you protect the principal's personal and financial data in AI tools?
Protect the principal's data by giving staff an approved
business AI platform with written terms that prohibit training on your data,
controlling who can use which tools, and setting clear rules on what
information goes in. Pair that with training so the safe option is also the
easy one for everyone.
Blocking AI rarely works. People switch to their phones. A
better approach:
1. Provide an approved platform. Choose
one built for business use, with single sign-on, role-based access, and audit
logs.
2. Check the data terms. Free consumer
tools may use your inputs to train their models. Business platforms should put
"no training on your data" in writing.
3. Limit access by role. The person
drafting travel itineraries doesn't need the same access as the person
reconciling investment accounts.
4. Restrict connectors. Don't give an AI
assistant open access to every inbox, drive, and archive the office holds.
5. Set retention rules. Decide how long
prompts and outputs are kept and who can see them.
This is why we offer Managed Framework AI to our partners.
It runs on an enterprise platform that's System and Organization Controls (SOC)
2 Type I, SOC 2 Type II, and SOC 3 certified. Partner data is encrypted,
isolated from other organizations, and never used to train AI models.
Administrators control which roles can use which models and features, with full
audit trails. Some models carry a 30-day retention exception, and
administrators can restrict those models by role. Data processing agreements
are available on request.
How should a family office verify requests when AI can fake a voice or
video?
A family office should verify every payment request and
every change to bank instructions through a separate, known channel, no matter
how convincing the voice, video, or email looks. Use a callback to a number
already on file, a second approver for wires, and a private code word known
only to the family and key staff.
The Federal Bureau of Investigation (FBI) has warned about
this directly. In a December 2024 public service announcement, the
FBI said criminals use AI-generated audio to impersonate relatives in a crisis
and AI-generated video for real-time video chats with supposed company
executives. Its advice includes creating a secret word or phrase with your
family and hanging up to call back on a number you know.
The Treasury Department's Financial Crimes Enforcement
Network (FinCEN) reported the same pattern in a November 2024 alert. It noted that criminals
have used AI tools to impersonate an executive or other trusted employee and
instruct victims to transfer large sums.
Put these steps in writing:
·
Callback
on every new or changed payment instruction, using a number from your own
records.
·
2 people
approve wires above a set amount, with no exceptions for urgency.
·
A code
word for the principal and family members to use on unexpected money
requests.
·
Pause on
pressure. Urgency and secrecy are red flags, so staff should feel safe
slowing down.
These controls also show up on insurance applications. Our
guide to cyber insurance for family offices explains
what insurers ask about payment verification.
Who should own AI decisions in a small family office?
In a small family office, the director or COO should own AI
decisions and the policy, the principal should set the family's risk tolerance,
and your IT partner should vet tools and enforce technical controls. Family
members need a named person to ask before they try a new AI tool with family
information.
Many family offices don't have a compliance department.
Under the Securities and Exchange Commission's (SEC) family office rule, qualifying single-family
offices are excluded from regulation under the Investment Advisers Act, so
there's often no outside examiner asking about AI. The policy is the office's
own commitment to the family.
A workable model:
·
Principal
or family council: sets risk tolerance and approves the policy
·
Director
or COO: owns the policy, the approved-tool list, and exceptions
·
IT
partner or virtual Chief Information Officer (vCIO): vets tools, configures
access, and documents controls
·
Outside
counsel: reviews rules that touch legal, tax, or estate matters
At Framework IT, responsible AI guidance is part of every
managed services engagement, and we commit to helping each partner identify at
least 1 real-world AI use case. We support approximately a dozen family
offices, and we don't name them without their permission. Our Information
Privacy guarantee and individual audit trails for every action our team takes
mean the people helping you with AI are held to the same standard of discretion
you expect from everyone else.
What does a good AI policy for family offices look like in practice?
A good AI policy for family offices is short, covers staff
and family members, comes with an approved tool, and gets reviewed as tools
change. The office knows where AI is used, everyone knows the verification
rules, and someone owns the list. Training happens before the rollout.
Training doesn't need to take a week. Our AI Champion
Certification takes about 90 minutes. Partners in the Managed Framework AI
adoption program meet with us monthly for an AI Strategic Business Review.
Every Managed Framework AI partner also gets access to the Framework AI
Resources Hub from day one, the central portal for training materials, guides,
tools, and industry playbooks, including financial services.
Start small. Publish the policy, give staff the approved
platform, and pick 3 to 5 low-risk tasks, like summarizing public research or
drafting internal procedures. Add work that touches family data once
permissions and review steps are set. AI also belongs on your broader IT
roadmap, which our guide to proactive IT management explains.
Frequently Asked Questions
Is an AI policy required for a family office?
Usually there's no specific legal requirement. But a written
policy is the simplest way to protect the family's privacy, keep vendors
accountable, and show insurers you control how sensitive data is handled. It
also gives staff clear rules when a request feels wrong.
Can family office staff use free ChatGPT?
They can for public information, but they shouldn't use free
consumer tools with family or office data. Those tools may use inputs to train
their models and give the office no admin visibility. Give staff an approved
business tool instead.
How do we protect the principal from deepfake voice scams?
Set a private code word for the family and key staff, verify
money requests by calling back on a known number, and require 2 approvers for
wires. The FBI recommends both the secret word and the callback in its guidance
on AI-enabled fraud.
Does Illinois law affect AI use at a Chicago family office?
If you employ people in Illinois, yes. An amendment to the
Illinois Human Rights Act (HB 3773) took effect January 1, 2026. It requires
notice when AI is used in decisions like hiring and promotion, and bars AI use
with a discriminatory effect. (This is general information. Talk to your
counsel about your specific obligations.)
The Bottom Line
AI can save a lean family office real time, and it can also
expose the family's private information or make an impersonation sound real. An
AI policy for family offices sets the rules for both, for staff and family
members alike.
We guide Chicagoland family offices on AI policy, and
through Managed Framework AI we help secure the tools and train the team, with
the discretion your family expects. Learn more about our IT support for Chicago family offices and our AI services.
Book an AI readiness conversation to
see where your family office stands and what to do first.
Framework IT | 700 N. Sacramento Blvd., Suite 101, Chicago,
IL 60612 | (312) 564-5446
About the Author
Adam Barney is President and Managing Partner of Framework
IT, a premier managed IT and telecommunications firm based in Chicago. With
more than 15 years of executive experience in managed services and
telecommunications, Adam leads with a core philosophy that technology should be
user-friendly and approachable, empowering businesses to thrive in their
respective industries.
Since assuming the presidency in January 2020, Adam has led
a team of over 40 professionals spanning sales, information technology,
operations, marketing, human resources, and fulfillment. Under his leadership,
Framework IT remains committed to its unique inverted-pyramid approach, which
ensures clients' needs and aspirations are always the company's top priority.
Founded in 2008, Framework IT specializes in IT support,
strategy, and cybersecurity for small and mid-sized businesses nationwide. The
company's 30+ engineers act as an extension of client businesses, proactively
preventing IT issues so teams have more time to focus on what truly matters.
During his career, Adam has consulted over 1,000 companies, helping them
transform and streamline their technology infrastructure.
In recent years, Adam has spearheaded the adoption of
artificial intelligence in Framework's internal operations and service
delivery, positioning the company at the forefront of AI-driven IT management.
He has pioneered the launch of a new service offering to help clients implement
AI and AI-based automation in their own businesses, enabling organizations to
unlock new levels of efficiency and competitive advantage. Adam is also a
founding member of The Forge AI Alliance of MSPs, an alliance of managed service
providers working to accelerate the adoption of AI and automation in their own
companies and those of their clients.
Under Adam's leadership, Framework IT has been named to the
Inc. 500 Fastest Growing Private Companies in America twice and the Inc. 5000
list at least five times over the past decade. The company has been ranked one
of the Best & Brightest Places to Work in Chicago for five consecutive
years and one of the Best & Brightest Places to Work in the Nation twice in
the last five years. Framework IT has maintained a BBB complaint-free record
since 2008.
Adam's expertise has positioned him as a sought-after voice
in managed services and business technology. His insights have been featured in
the Harvard Business Review, the Washington Post, and Fox 32 Chicago. Adam has
also served as a speaker and panelist at the Chicago Bar Association AI
Symposium, sharing practical guidance on AI adoption with the legal community.
Adam holds a Bachelor of Science in Finance and Business
Administration from the University of Illinois Urbana-Champaign, where he
graduated Summa Cum Laude. He maintains numerous industry certifications,
including ITIL Foundations and multiple AI and cybersecurity certifications.
Outside of work, Adam is a husband and father of two
daughters, as well as an avid reader with interests spanning leadership,
management, psychology, and technology.
