Franklin Templeton (BEN) risk factors, 2024 10-K

MARKET AND VOLATILITY RISKS

1. 01Volatility and disruption of our business and financial markets and adverse changes in the global economy may significantly affect our results of operations and put pressure on our financial results
2. 02The amount and mix of our AUM are subject to significant fluctuations, and a shift in our asset mix toward lower-fee products may negatively impact our revenues and income
3. 03Our funds may be subject to liquidity risks or an unanticipated large number of redemptions and fund closures
4. 04Poor investment performance of our products could reduce the level of our AUM or affect our sales, and negatively impact our revenues and income
5. 05Harm to our reputation may negatively impact our revenues and income
6. 06Our business and operations are subject to adverse effects from the outbreak and spread of contagious diseases such as COVID-19
7. 07We may review and pursue strategic transactions that could pose risks to our business and global operations
8. 08Our business operations are complex and a failure to perform operational tasks properly or comply with applicable regulatory requirements could have an adverse effect on our revenues and income
9. 09Failure to establish adequate controls and risk management policies, or the circumvention of controls and policies, could have an adverse effect on our global operations, reputation and financial position
10. 10We face risks, and corresponding potential costs and expenses, associated with conducting operations and growing our business in numerous countries
11. 11Our focus on international markets as a source of investments and sales of our products subjects us to increased exchange rate and market-specific political, economic or other risks that may adversely impact our revenues and income generated overseas
12. 12We may not effectively manage risks associated with the replacement of benchmark indices
13. 13Failure to properly address the increased transformative pressures affecting the asset management industry could negatively impact our business
14. 14Strong competition from numerous and sometimes larger companies with competing offerings and products could limit or reduce sales of our products, potentially resulting in a decline in our market share, revenues and income
15. 15Increasing competition and other changes in the third-party distribution and sales channels on which we depend could reduce our revenues and income and hinder our growth
16. 16Any failure of our third-party providers to fulfill their obligations, or our failure to maintain good relationships with our providers, could adversely impact our business
17. 17We may be adversely affected if any of our third-party providers is subject to a successful cyber or security attack

TECHNOLOGY AND SECURITY RISKS

1. 18Our ability to manage and grow our business successfully can be impeded by systems and other technological limitations
2. 19Any significant limitation, failure or security breach of our information and cybersecurity infrastructure, software applications, technology or other systems, or those of our third-party providers, that are critical to our operations could disrupt our business and harm our operations and reputation
3. 20Our inability to recover successfully, should we experience a disaster or other business continuity problem, could cause material financial loss, regulatory actions, legal liability, and/or reputational harm

HUMAN CAPITAL RISKS

1. 21We depend on key personnel and our financial performance could be negatively affected by the loss of their services
2. 22Our ability to meet cash needs depends upon certain factors, including the market value of our assets, our operating cash flows and our perceived creditworthiness
3. 23We are dependent on the earnings of our subsidiaries

LEGAL AND REGULATORY RISKS

1. 24We are subject to extensive, complex, overlapping and frequently changing rules, regulations, policies, and legal interpretations
2. 25We may be adversely affected as a result of new or revised legislation or regulations or by changes in the interpretation of existing laws and regulations, in the U.S. and other jurisdictions
3. 26Global regulatory and legislative actions and reforms have made compliance in the regulatory environment in which we operate more costly and future actions and reforms could adversely impact our financial condition and results of operations
4. 27Failure to comply with the laws, rules or regulations in any of the jurisdictions in which we operate could result in substantial harm to our reputation and results of operations
5. 28Changes in tax laws or exposure to additional income tax liabilities could have a material impact on our financial condition, revenues and income
6. 29Regulatory and governmental examinations and/or investigations, litigation and the legal risks associated with our business, could adversely impact our AUM, increase costs and negatively impact our profitability and/or our future financial results
7. 30Our contractual obligations may subject us to indemnification costs and liability to third parties
8. 31Failure to protect our intellectual property may negatively impact our business