Bullet points include: Potentially subject to significant operational risk. Particularly if have retail client base. Note clients may try to re-categorise losses however they arise as operational failings, if this unlocks compensation from asset manager. Split cap scandal in UK almost led to demise of Aberdeen Asset Management. Regulatory and market pressure caused major contraction in business. Interaction with reputational risk. Conduct of business failings can wipe out small firms and with larger firms can reduce quality of earnings
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