Investment Operations: The Evolving Landscape in 2023
The Australian Institute of Superannuation Trustees hosted the Investment Operations Forum 2023 in Melbourne on 5th April 2023.
Continued industry growth, fund consolidations, increased regulatory requirements and growing cost pressures are requiring funds to re-evaluate their operating models to maximise efficiencies.
The forum was designed for Investment Operations current and emerging leaders to gain insights, develop a broader understanding of how rapidly evolving operational environments are impacting investment operations teams and help share best practices to inform solutions to alleviate collective challenges.
Key themes that were addressed throughout sessions by senior leaders across the superannuation and asset servicing industry included: positioning for scale – future fund operating models, making technology and data work effectively, due diligence and asset valuations, governance and controls, performance, specialised vs generalist teams, and creating a ‘value-add’ high performing team and culture.
The key message that resonated throughout the different sessions was that you can have all the latest systems, technology, and processes however it is the people and culture that bring it all together. Culture and people are always the differentiating factors as it impacts the intensity in what a fund does, and the teams that are put together. As Stephen Reilly, COO HESTA put it, culture matters, and the better teams are put together the better the technical outcomes especially as operations teams are increasingly more integrated with risk, legal, compliance and performance teams.
Leaders also emphasised the difference between generalist and specialised teams. While some funds have gone down the specialsied path, others continue to see the benefit in generalist skills which aligns with the market demand we see at Kaizen Recruitment. Operations roles have continued to expand to require greater skills across fund operations, performance, data, and coding, along with fund accounting and implementation in some cases. Our market observations corroborate what the funds face while the demand for breadth of these skills continues, the supply side continues to be a challenge.
The differentiation and delineation between the operations and investments team was also a key point of discussion, and how the gap can continue to be bridged from a cultural perspective.
Kaizen Recruitment closed the conference with the session on Elevating Investment Operations: Attracting and Retaining Talent. We shared some insights on the current state of the employment market, the key motivations for candidates to consider a role, and strategies to attract and retain talent in investment operations, especially as funds become more complex and portfolios more diverse, the need for experienced professionals in investment operations continues to grow.
The market for investment operations talent has always been competitive, however with the current demand for private markets experience having increased this has been exacerbated. With the evolution of technology and systems, the demand for data analytics skills has rapidly increased as mentioned, however as many funds also rely on outsourced models, operations professionals need to possess superior stakeholder management, communication and presentation skills to be able to operate in lean teams, help manage external parties and present to senior management.
To continue to meet requirements but also help retain staff, Kaizen suggested upskilling current fund accounting/investment operations teams, enhancing subject matter experts with educational and practical data analytics courses and equipping them with coding and programming skills which will increase employee retention and keep the intellectual property in-house, whilst building investment operations skill sets of the future.
Given the emphasis on the importance of culture to the present workforce Kaizen also shared insights on the importance of a strong EVP backed by insights from our regular market surveys and additionally the importance of diversity in enhancing outcomes but also in helping attract talent given the desire to be part of diverse and inclusive teams. Kaizen shared some insights on diversity in recruitment to also help address a number of audience questions on how diversity is shaping up in the industry.
The industry attendees also sought feedback on its traction with the younger generations and we also suggested that superannuation funds need to increase their exposure and education at the high school and university levels through cadetships/internships/work experience to be noticed by the younger generation. Perhaps universities could add a course into the current commerce or business degrees for investment operations, creating a foundation for the future generation of talent in Australia.
Investing in current teams to upskill them to be the future skill set of investment operations is important, as well as focusing on diversity and inclusivity to foster a culture of new ideas in a safe space.
Ultimately, investment operations rely on people and culture, and it is important to prioritise the attraction and retention of talent to ensure success in the industry.
Kaizen Recruitment specialises in financial services recruitment across funds management, wealth management, superannuation, investment consulting, and insurance. We are based in Melbourne and Sydney. For assistance or further information please telephone our office at (03) 9095 7157 or submit an online form.
