Please note: Our retained client partners have already received the early release access to the full Kaizen report directly as part of our exclusive content access |
This article summarises a more detailed Kaizen brief. It covers how a large industry superannuation fund built a specialist operational due diligence capability years before it became a regulatory imperative, the specific capability gaps our team sees when assessing candidates, and how to define an investment governance search before defining a title.
For years, our team has advised funds management and superannuation clients on the value of professionals who can operate across investments, operational due diligence, investment operations, data, risk and governance. We have placed many of these individuals into client organisations and helped shape teams designed to provide far more than periodic compliance oversight.
For in-depth insights on this topic, reach out to the team for the full report.
What has changed is the urgency
Following the failures of First Guardian and Shield, investment-option selection, disclosure, portfolio review and ongoing monitoring have attracted far greater regulatory and industry scrutiny. ASIC is conducting multiple investigations into conduct connected with both schemes, which impacted thousands of people’s retirement savings.
APRA’s subsequent thematic review called on platform trustees to strengthen investment-option onboarding, ongoing monitoring and member outcomes. In August 2026, APRA also announced planned consultation on broader investment governance reforms addressing capability, onboarding, monitoring, offboarding, conflicts, diversification, trustee oversight and accountability.
The regulatory focus has not created the need for genuine investment governance. It has exposed what can happen when it is treated principally as a compliance exercise.
At the same time, eight firms have approached Kaizen seeking related capability across investment governance, investment risk governance, investment data governance and investment operations governance.
The briefs differ, but the underlying requirement is consistent: professionals who understand investments and the operational ecosystems supporting them, and who can examine whether governance is producing genuine oversight rather than procedural comfort.
The market is finally recognising the value of this capability. It is also discovering how few people genuinely possess it.
The market did not suddenly discover investment governance
Kaizen has known for years that genuine investment governance and operational due diligence (ODD) capability was both valuable and exceptionally difficult to find.
Long before the current level of regulatory attention, we have been helping our clients identify and appoint professionals who could operate beyond conventional compliance box-ticking style oversight. These were people who understood investments, but also understood the operational environments supporting them. They could examine the quality of portfolio construction and performance information, question how an external manager or service provider operated, and identify where investment, operational, governance and third-party risks intersected.
The difficulty has always been that the market never developed these professionals through one consistent career pathway.
No two businesses structured the work in the same way. Consequently, few professionals were given the opportunity to develop every component within one organisation or function.
The people who have assembled the strongest combination of these skills have generally done so over many years, across different roles, institutions and parts of the financial services ecosystem. They understand funds management, fund administration, custody, prime broking, institutional investment, superannuation, wrap platforms and the external relationships supporting those environments because their careers have exposed them to several of them.
These professionals are not difficult to find because investment governance is new. They are difficult to find because the required capability is acumulated.
They are typically established, mid-career professionals whose judgement has been formed through different operating models and market cycles. Their remuneration reflects not merely their tenure and senority, but the scarity of their combined investment, operational, analytical and governance experience.
Building the capability before it became a regulatory imperative
Several years ago, a large industry superannuation fund sought our team to help shape and build a specialist Operational Due Diligence team intended to transform the investment-governance capability surrounding its external investment relationships.
The team proved sufficiently innovative and valuable that it was subsequently lifted into a special investment management and consultancy firm and used to establish a specialist service offering for a wider group of domestic and global financial services businesses.
That transition was significant. It demonstrated that sophisticated operational due diligence was not merely an internal compliance obligation. It could be developed into a valuable capability in its own right, providing financial services organisations with deeper insight into external managers, operational structures and investment-governance risks.
It also illustrated the competition for best-in-class talent before the broader ecosystem fully recognised the supply constraint. One innovative client had invested in building a scarce multidisciplinary team. Another recognised the quality and commercial potential of that capability and brought it into a model capable of serving a broader market.
The market is now experiencing that competition at greater scale.
First Guardian and Shield have forced the issue into the open
The failures of First Guardian and Shield have intensified scrutiny of trustee and platform investment governance, particularly the quality of investment-option approval and ongoing monitoring. The regulator is conducting multiple investigations into conduct connected with both managed investment schemes.
Just last month, 2026, APRA announced planned consultation on reforms intended to strengthen investment governance across the full investment-management lifecycle.
The areas it identified included:
Investment-management capability proportionate to the complexity of the menu,
Onboarding,
Monitoring and offboarding,
Conflicts,
Diversification, and
Trustee oversight and accountability.
This matter supports our observations throughout our work in the sector.
If investment governance is approached primarily as a compliance exercise, the process can become focused on proving that a review occurred...while the substance of the investments (products; allocation; valuation & liquidity etc) & it's operating environment remains insufficiently understood. Documentation may be complete, committees may have received papers and formal approvals may be in place, while the substance of the investment and its operating environment remains insufficiently understood.
Technical capabilities and experience that make a genuine investment governance professional
Genuine investment governance asks the more difficult and complex questions. It considers whether:
The information used to approve an investment is complete and reliable
Disclosures correspond with the underlying activity
Portfolio and performance information withstand independent analysis, and
Ongoing monitoring is capable of detecting a material change rather than merely recording it after the event.
To learn more, request the full report.
It also asks whether those charged with performing the review understand investments deeply enough to recognise what does not make sense.
That is why this cannot be solved by adding another checklist.
Eight firms were simultaneously competing for variations of the same capability
We are now seeing the supply-and-demand constraint become explicit.
Eight clients had approached us over a relatively concentrated period seeking related capability across investment governance, investment data governance and investment operations governance. The briefs are not identical, nor should they be treated as interchangeable. Each organisation has developed through a different structure and is responding to a different combination of regulatory, investment, operational and commercial priorities.
However, the underlying direction is consistent.
To understand the full requirements and deeper analysis on functional role design, read the report here.
Titles do not resolve these differences. Two people carrying an Investment Governance title may offer wildly different capabilities, while an outstanding candidate may sit under a title that does not mention governance at all.
This is precisely why specialist search knowledge matters.
The regulatory moment is exposing a long-standing capability shortage
The current scrutiny has not created the value of investment governance. It has exposed the consequences of failing to recognise that value.
For years, the strongest professionals in this market have understood that effective investment governance requires more than approval papers, periodic attestations and evidence that a review cycle has been completed. It requires people who can engage with the substance of an investment, examine the operational ecosystem behind it and maintain meaningful oversight after it has entered a platform, portfolio or investment menu.
First Guardian and Shield have brought those questions into much sharper public and regulatory focus. ASIC’s investigations span conduct associated with the schemes, while APRA’s response has specifically emphasised stronger onboarding, ongoing monitoring, trustee capability and accountability.
The market is therefore reaching an anticipated point through years of appointments and team builds.
Conclusion
Organisations are no longer competing simply for somebody who can administer an investment-governance framework. They are competing for professionals who understand the investment, the data, the operational machinery and the chain of external relationships behind it.
Those people are precious because their expertise has been developed across functions the industry historically kept separate. They are expensive because the capability takes years and multiple forms of experience to build. They are fiercely competed for because regulatory scrutiny is now forcing more organisations to recognise the same requirement at the same time.
The capability was always valuable.
The difference is that the wider ecosystem is finally being forced to price that value properly and are rapidly reconciling these price tags associated with a quality professional’s skill sets in a high demand ecosystem
Request the full Kaizen Report
This article summarises a more detailed Kaizen brief. It covers how a large industry superannuation fund built a specialist operational due diligence capability years before it became a regulatory imperative, the specific capability gaps our team sees when assessing candidates, and how to define an investment governance search before defining a title.
Get in Touch
Based in Melbourne and Sydney, Kaizen Recruitment specialises in financial services recruitment nationally across funds management, wealth management, superannuation, investment consulting, fintech and insurance. If you'd like to understand more about the current candidate landscape within funds management or what's driving talent decisions in the market right now, please fill in the form below and a member of our team will be in touch.
Thanks for your enquiry, we'll be in touch soon.
Investment Governance: Frequently Asked Questions
What is investment governance?
Investment governance is the framework through which an organisation approves, oversees and monitors its investment activities. It can encompass decision rights, delegations, investment-option approval, portfolio oversight, external-manager monitoring, operational due diligence, data governance, conflicts, committee effectiveness and accountability.
Effective investment governance is not limited to demonstrating that a process has been completed. It should help the organisation understand the investment, the information supporting it, the operational environment in which it functions and the third parties on which it depends.
Why is investment governance receiving greater scrutiny?
Investment governance has received greater regulatory attention following issues associated with First Guardian and Shield. APRA has called on platform trustees to strengthen investment-option onboarding, ongoing monitoring and member outcomes, and has announced further work to strengthen investment governance standards. [apra.gov.au]
The scrutiny is prompting trustees and financial services organisations to reconsider whether their governance capability is proportionate to the complexity of their investment menus, products and external relationships.
Why are investment governance professionals so difficult to recruit?
The capability did not develop through one established career pathway. Its components have historically existed across custodians, fund administrators, investment research, portfolio analysis, performance, operational due diligence, superannuation, risk, compliance, technology, data and transformation.
The strongest professionals have usually accumulated experience across several of these environments over many years. They are scarce because few roles provide exposure to the complete investment and operational ecosystem.
What skills does an investment governance professional need?
The precise combination depends on the organisation, but strong investment governance professionals may bring experience across specific areas (Request the full report to learn more). Few individuals will be equally strong across every area. The search needs to begin by defining which combination is material to the organisation’s operating model.
What is operational due diligence in funds management?
Operational due diligence examines whether the people, governance, systems, controls, culture and service-provider arrangements supporting an investment manager are sufficiently robust.
What should organisations assess before recruiting an investment governance leader?
An organisation should first determine which problem the appointment is intended to solve. It should clarify whether the priority is external-manager oversight, operational due diligence, investment risk, data governance, committee governance, asset-class partnering, transformation or a defined combination of these areas.
Why do investment governance job titles vary so widely?
Investment governance developed differently across organisations.
For this reason, current job titles are an unreliable indication of capability. The substance of a person’s career, including the environments in which their experience was gained, is more important than the title they currently hold.
Why is specialist recruitment knowledge important in this market?
A specialist recruiter needs to understand how the component capabilities differ and where they have historically developed.
Without that context, employers risk selecting candidates whose titles appear relevant but whose experience was formed around a materially different purpose.
