Most 'pure' arbs are exploited, but many still exist. They often require capital, expertise, and experience.
Not really.
Usually it is a higher tolerance for risk combined with not telling the customer how much risk they actually are taking.
It is all good until it is not, and by then it is too late
Obviously a run of the mill crypto ponzi offering 30% interest or something will eventually collapse.
Difficult to balance incentives when it comes to traditional finance offerings such as structured products or an actively managed investment vehicle.
As you point out, customers struggle in evaluating risk
I would tend to classify that as someone offering you work/a partnership rather than an arbitrage.