The staffing problem with internalisation

How to hire and retain staff is the big question for superannuation funds to solve when it comes to internalisation of investment management, according to a panel.

Speaking at the Australian Superannuation Investment conference, held by the Australian Institute of Superannuation Trustees (AIST) in the Gold Coast, a panel discussed the struggles when hiring investment employees.

There had been a trend in the space recently for super funds to bring their investment in-house as a way to cut down costs compared to external management.

Ken Marshman, chairman of Rest, said: “Retaining staff is the big question of internalisation because funds can get the OK to pay $1 million for an external manager but can you pay that when you bring it in-house or what does that say about the culture of the organisation? This is a major sleeping issue and we have to be careful if we are heading in that direction. This is a big issue”.

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However, Philip Moffitt, board director at Aware Super, disputed this and said the idea that there was a supply shortage for talented staff was a myth. The solution, he said, was to provide a value proposition which would attract staff beyond just the salary.

“Everyone wants to think there is a shortage but that’s not the case. Aware has been hiring a lot of people and it hasn’t been as difficult as we thought.

“Your value proposition has to be very clear, highlight that they can work across asset classes, unlike at a fund manager, and that they can work with the best global managers.”