Crucial Topic.
Custodial wallet is a type of wallet that requires a third party to takes hold of private keys on behalf of every user.
Which makes asset more secure, because only the third party and the user knows the private key.
In a case where there is missing asset, the private key must have been shared to someone outside the third party and user.
As for Hardware wallet, just misplacing it could put the user at risk, because no third party to help checkmate the security.
I think people that are too afraid to hold on to private keys by themselves and prefer custodian wallets are people that are easily comfortable with banks and exchanges having their private keys.
Losing an hardwallet doesn’t necessarily means the coins are gone forever because there’s the seed phrases that could be used to recover or generate the private key. This seed phrase could then be imported into a new hardware wallets to recover funds. To secure one’s seed phrase or private key from missing, multiple backups are required and could be stored in different locations just in case of natural emergencies.
And if at ones is afraid of security needs another human back then a family relative could even be less risky than having to trust a custodian wallets which could be face by hacks and could expose the keys to not just the hacker but multiple others