You're mixing up a few things. Investors/clients are usually other funds, which have their own corporate structure, etc. In any case, protection/limiting liabil

You're mixing up a few things. Investors/clients are usually other funds, which have their own corporate structure, etc. In any case, protection/limiting liability is the responsibility of each individual (institutional) investor. All I'm saying is, it's perfectly reasonable to have money in a managed account. That might even be much more respectable! Imagine I'm a small, unproven but promising fund manager... What is going to be easier, convince a $10bn pension/endowment fund to give me the money (that I then channel into offshore corporations "for tax purposes"), or to give the money into an account at some reputable investment bank like BAML or GS and only allow me (or anyone else) to invest/direct/manage that money (in strictly defined terms that are under control of the custodian bank, e.g. delta limits, or asset class/stock restrictions, etc.)?