There are clearly challenges to managing much larger, more diversified firms, as well as benefits. This business strategy is surely not for all financial services firms. Business Conditions Necessary for Financial Conglomerates to Succeed The difficulties associated with operating a financial conglomerate are suggested by the business conditions that are necessary for such a conglomerate to succeed.
We have heard, of course, of the potential economies of scale and scope in managing information that may allow large firms to reduce the unit costs of doing business.