Federated Hermes's biggest risks in the FY2024 10-K
- Money market assets generated approximately 51% of 2024 revenue, creating significant exposure to stable-NAV and interest-rate risks.
- Revenue depends on asset levels, asset mix, investment performance, distribution access and advisory agreements that can end on 60 days’ notice.
- Regulatory, tax and ownership structures can constrain the business, including potential financial transaction taxes and ETF tax-law changes.
The risks most specific to Federated Hermes
- Risks Related to Federated Hermes’ Investment Management Business and Offerings
Risk of Federated Hermes’ Money Market Offerings’ Ability to Maintain a Stable Net Asset Value
Approximately 51% of 2024 revenue came from money market assets, whose funds are uninsured and seek to maintain a stable NAV.
- Risks Related to Federated Hermes’ Investment Management Business and Offerings
Potential Adverse Effects of Declines in the Amount of or Changes in the Mix of Assets under Management
Revenue falls when assets under management decline or shift toward lower-fee fixed-income, alternative/private-market and money market offerings.
- Risks Related to Federated Hermes’ Investment Management Business and Offerings
Potential Adverse Effects of Termination or Failure to Renew Advisory Agreements
Advisory agreements generating most revenue can be terminated on 60 days’ notice, risking the loss of fund mandates and fees.
- Risks Related to Federated Hermes’ Investment Management Business and Offerings
Potential Adverse Effects of Changes in Federated Hermes’ Distribution Channels
Banks, broker/dealers, registered investment advisers and financial planners distribute offerings, so changes in these channels could reduce sales.
- Risks Related to Interest Rates and Investment Performance
Potential Adverse Effects of Poor Investment Performance
Poor performance versus markets or competing funds could reduce demand for Federated Hermes Funds, Separate Accounts and other offerings.
- Regulatory and Legal Risks
Potential Adverse Effects of Changes in Laws, Regulations and Other Regulatory Requirements
Extensive U.S. and international regulation can impose compliance costs, restrict activities or affect Federated Hermes’ offerings and business lines.
- Regulatory and Legal Risks
In addition, a FTT, particularly if enacted with broad application in the UK or EU, or the U.S., would be detrimental to Federated Hermes’ business and offerings
A broadly applied financial transaction tax in the UK, EU or U.S. could harm Federated Hermes’ business and offerings.
- Regulatory and Legal Risks
For a further discussion of U.S. and international regulatory developments and regulatory requirements that can impact Federated Hermes and its business and offerings, see Item 1 – Business – Regulatory Matters
Repealing U.S. ETF tax treatment for certain redemptions could adversely affect Federated Hermes’ ETF offerings and business.
- Risk Related to Federated Hermes’ Corporate Structure
Status as a Controlled Company
The Donahue family’s Voting Shares Irrevocable Trust controls all voting Class A stock, limiting other shareholders’ influence.
All 25 risk factors
Headings as the filing states them, in filing order.
Risks Related to Federated Hermes’ Investment Management Business and Offerings
- 01Potential Adverse Effects of a Material Concentration in Revenue
- 02Potential Adverse Effect of Providing Financial Support to Investment Offerings
- 03Risk of Federated Hermes’ Money Market Offerings’ Ability to Maintain a Stable Net Asset Value
- 04Potential Adverse Effects of Increased Competition in the Investment Management Business
- 05Risks Related to the Development of New Offerings
- 06Potential Adverse Effects of Changes in Federated Hermes’ Distribution Channels
- 07Potential Adverse Effects of Declines in the Amount of or Changes in the Mix of Assets under Management
- 08Potential Adverse Effects of Termination or Failure to Renew Advisory Agreements
Risks Related to Interest Rates and Investment Performance
- 09Potential Adverse Effects of Rising Interest Rates
- 10Potential Adverse Effects of Low Short-Term Interest Rates
- 11Potential Adverse Effects of Poor Investment Performance
Risk Related to Federated Hermes’ Corporate Structure
- 12Status as a Controlled Company
Economic and Market Risks
- 13Potential Adverse Effects of a Decline or Disruption in the Economy or Markets
- 14No Assurance of Access to Sufficient Liquidity or Capital
Regulatory and Legal Risks
- 15Potential Adverse Effects of Changes in Laws, Regulations and Other Regulatory Requirements
- 16In addition, a FTT, particularly if enacted with broad application in the UK or EU, or the U.S., would be detrimental to Federated Hermes’ business and offerings
- 17For a further discussion of U.S. and international regulatory developments and regulatory requirements that can impact Federated Hermes and its business and offerings, see Item 1 – Business – Regulatory Matters
- 18Potential Adverse Effects of Litigation, Investigations, Proceedings and Other Claims
- 19Risks Related to Auditor Independence
Operations-Related Risks
- 20Systems, Technology and Cybersecurity Risks
- 21Artificial Intelligence Risks
Other General Risks
- 22Recruiting and Retaining Key Personnel (Human Capital Resource Management Risk)
- 23No Assurance of Successful Acquisitions
- 24Potential Adverse Effects of Reputational Harm
- 25Potential Adverse Effects of Unpredictable Events or Consequences
Other Federated Hermes 10-Ks
- FY2025 10-K risk factors25 risks1 new1 dropped17 reworded
Strategic-transaction risk now covers partnerships, investments and integration, not just acquisitions.
Filed Feb 27, 2026
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.