Sei Investments (SEIC) risk factors, FY2025 10-K

What changed since the prior 10-K

New

• NewStrategic & Business Model Risks

  units and our ability to successfully manage these risks, including those related to the potential disruptions from automation, artificial intelligence and machine learning, may significantly affect our value

  Client attrition may occur due to AI solutions, tokenized products, pricing pressure, or financial institution consolidation.

• NewOperational Risks

  Further, we depend on third-party pricing services to value securities in our investment products. Inaccurate valuations, particularly for securities without readily available market prices, could adversely affect revenues and earnings from assets under management

  Dependence on third-party pricing services could lead to inaccurate valuations of securities without readily available market prices.

• NewOperational Risks

  Finally, many investment advisors distributing our products are affiliated with independent broker-dealers or networks that require approval of our offerings. Failure to obtain or maintain these approvals could negatively impact our ability to market and distribute investment products

  Failure to obtain approvals from independent broker-dealers could impair distribution of our investment products.

• NewOperational Risks

  Valuations of certain assets depend on active markets and involve considerable judgment. If these valuations prove inaccurate, our revenues and earnings from assets under management could be adversely affected

  System disruptions or cyberattacks across interconnected global financial networks could impair transaction processing and cause financial losses.

• NewOperational Risks

  Subsidiary expansions in areas without a primary regulator, yet subject to SEC and FFIEC oversight, create unique governance and compliance challenges. Aligning technology infrastructure with evolving regulatory expectations may require significant investment and operational changes

  Expanding into EMEA and APAC introduces diverse regulatory environments, cultural challenges, and potential ongoing costs from underperforming locations.

• NewTechnology, Innovation & Cyber Risks

  by customers and other third parties, regulatory actions, damage to our reputation, and loss of current and potential users, each of which may adversely impact our consolidated financial statements. The costs necessary to rectify these problems may be substantial and may adversely impact our business

  Software defects, development delays, or integration difficulties could harm our reputation and expose us to liability.

• NewFinancial & Market Risks

  Investment & Product Risks

  Evolving client preferences for ESG investments and alternative asset classes like private credit could cause fee compression if unaddressed.

• NewRegulatory & Legal Risks

  We are currently subject to lawsuits and regulatory scrutiny, and these matters can result in significant financial exposure, reputational harm, and operational disruption. Litigation may involve class actions or large institutional plaintiffs, which can amplify potential damages and settlement costs

  Active litigation, regulatory investigations, and potential shareholder activism could cause significant financial exposure and operational disruption.

• NewRegulatory & Legal Risks

  External & Environmental Risks

  Geopolitical conflicts such as the Russia-Ukraine war and Middle East instability pose risks to global markets, supply chains, and cyber infrastructure.

Dropped

• DroppedRisks Related to Our Business Model

  We may not achieve significant revenue from new products or services for years, if at all. New products and services may not be profitable, and even if they are profitable, operating margins for some new products and services may not be as high as the margins we have experienced historically

  New products may not achieve significant revenue or profitable operating margins.

• DroppedRisks Related to Our Technology

  Any of the foregoing factors could expose us to liability for damages which may not be covered by insurance; but may result in the loss of customer business, damage to our reputation, regulatory scrutiny or civil litigation

  Failure to maintain technology infrastructure causes cybersecurity vulnerabilities and remediation expenses.

• DroppedRisks Related to Our Investment Products and Solutions

  management fees. Further, if, due to changes in investor sentiment or the relative performance of certain asset classes or otherwise, clients invest in products that generate lower fees, our investment management business could be adversely affected

  Poor investment performance of AI strategies or ESG preferences could impact asset retention.

• DroppedRisks Related to Our Investment Products and Solutions

  The rise of alternative investments, including private credit and infrastructure, presents both opportunities and risks. Failure to effectively integrate these assets into our offerings could lead to outflows as clients seek diversification beyond traditional asset classes

  Failure to integrate alternative investments like private credit could lead to client outflows.

• DroppedRisks Related to Our Legal, Regulatory and Compliance Environment

  obligations will be unenforceable. It also includes compliance with privacy, anti-money laundering (AML), anti-corruption and terrorist financing rules and regulations

  Extensive regulation by U.S. and foreign agencies, including FFIEC oversight.

• DroppedRisks Related to Our Legal, Regulatory and Compliance Environment

  or litigation and result in reputational damage, liability to clients, and the termination of investment management or administration agreements and the withdrawal of assets under our management

  Use of models for investment decisions risks reputational damage and client liability upon failure.

• DroppedRisks Related to Our Business Generally

  In addition, conflicts or disagreements between us and any of our joint venture, strategic or minority partners may negatively impact the benefits to be achieved by the relevant venture

  Conflicts with joint venture partners or unsuccessful integration of acquisitions.

Reworded

• 100% rewrittenOperational Risks

  Although we employ backup systems for data, these may be unavailable or incomplete following a disruption, and recovery could be costly or unsuccessful, adversely impacting our business

  Replaced backup system disruption text with rapid growth risks, platform expansion expenses, and digital payment cybersecurity threats.

  Was: Although we employ backup systems for our data, those backup systems may be unavailable following a disruption, the affected data may not have been backed up or may not be recoverable from the backup, or the backup data may be costly to recover, which could adversely affect our business

All 10 risk factors

Headings as the filing states them, in filing order.

Other Sei Investments 10-Ks

• FY2024 10-K risk factors

  43 risks

  Revenue depends heavily on assets managed or administered, investment performance, and capital-market valuations.

  Filed Feb 20, 2025

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.