Fund mergers highlight focus on people

The pace of mergers in the superannuation sector is forecast to rise this year and the biggest challenge of those mergers is how they will merge their people, according to Super Recruiters and transformation specialists Whitewater Transformations.

KPMG estimated this decade would see a 60% fall in the number of funds and estimated that in five years’ time the current 217 Australian Prudential Regulation Authority (APRA) regulated funds would shrink to 138.

Cathy Doyle, chair of SR Network which included SuperRecruiters, SR Consult and SR Research, said mergers were not a matter of one fund group subsuming to another, nor merging two groups of people into one entity.

“[It was] creating a new entity and determining who were the best people for it in terms of capability and culture,” Doyle said.

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“For example, mergers result in two potential chief executives, CFOs [chief financial officers], other C-suites and range of management and teams. How does the new entity decide whom is the best?

“It is no longer appropriate to simply offer redundancies and see who takes it and who remains. The people merging process has to become much smarter, much more transformative.”

Adam Salzer, Whitewater Transformations executive chair, said funds spend a great deal of time working on the strategic pros and cons of their merger and acquisition without adequately identifying how they would bring the two workforces together.

“Rather than favour one of the existing fund structures over the other, the best way forward is to create a third culture, one that is fit-for-purpose to take the merged entity well into the future and best meet members’ future needs,” Salzer said.