Retail or not-for-profit – no longer an us or them

Thursday 22nd May 2014

Penny Pryor talks to two professionals who have made the switch to the ‘other side’ of the industry, whether that be not-for-profit or retail, and discovers that maybe the differences aren’t that great after all.

Traditionally the divide between the retail and not-for-profit sides of financial services has been wide, with battlelines drawn squarely down the middle.

But as the financial services industry continues to grow in Australia, not withstanding the rather large blip of the global financial crisis, these lines are being blurred and its not uncommon for someone to shift from one side to the other and vice versa.

Whereas once ideological leanings, or better remuneration prospects, were what prompted a person to be in one camp over the other, the differences in both these issues are gradually being eroded.

The motivation

Jeff Rogers

Jeff Rogers (above) was head of investment at not-for-profit Victorian Funds Management Corporation (VFMC) until 2006. Since then he has been head of investments and chief investment officer at retail firm ipac Securities. He says he doesn’t have allegiance to one side of the industry over the other, but rather he follows the challenges.

“To make any place interesting and worth working at …you need clarity of mission as to what you’re trying to do and then having the right governance internally wrapped around that,” he says.

“Provided those things are clear, you get on with the job and sometimes the challenges create some interesting work.”

Since he joined ipac Securities it was bought by AMP through its purchase of AXA Asia Pacific Holdings. So he now falls under the broader AMP umbrella.

John Pearce (below) was chief executive officer and general manager investments for Colonial First State from 2002 to 2007. He then moved to Singapore were he was general manager of investments for insurance company Ping An, before deciding to come back to Australia and taking up the chief investment role at not-for-profit UniSuper in 2009.

John Pearce

His current role also coincided with the fund’s decision to take much of its investment management in-house, which Pearce now oversees.

“I started my career in trading and investments and its getting back to an investment role,” he says.

At an industry fund decisions are much more singularly motivated.

“It’s either good for the members or it’s not,” he says.

At a retail operation he felt the impact of a much larger number of stakeholders, often with competing interests.

The responsibilities

Rogers believes that because retail financial services companies do have a variety of stakeholders, and often a variety of service offerings, investment professionals need to be able to deal with more segmented issues.

“That broader set of problems can also lead to some interesting challenges and solutions,” he says.

The role can also sometimes be more client facing than it would be in a not-for-profit.

“You’re engaging more at the front end … [building] what they really want as opposed to what you may want to build for them.”

Pearce says that he’s perfectly happy not having any other motivation outside of the member’s best interest, which enables him to focus on the best investment outcomes.

The remuneration

Pearce does admit that he misses the money on the retail side of the industry but Rogers says the gap between salaries on both sides is narrowing.

“I don't think there is a major difference between the major funds and the retail funds, in reality, unless you are a star fund manager,” he says.

He bases this on the data that industry funds now release about the salaries of their senior staff and management.

“I expect there has been a shift up over the last five or six years,” he says.

But when it comes down to it, it’s not really about the money for either professional.

“Having a clear mission and something that you feel is valuable [is important]. I personally think the question of salary is secondary,” Rogers says.

And Pearce says: “I’m enjoying this job too much.”

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