A frequently asked question from senior leaders at asset managers: across our front, middle and back offices, how many professionals do we need? We have answers.
Many of you will have recently received your annual Investment Benchmarking Full-Time Equivalent (FTE) report. We get regular feedback that the FTE report contains many of CEM’s most valuable and actionable insights.
Staffing is the largest driver of internal investment costs, and many expenses beyond compensation, from technology to governance infrastructure, ultimately scale with headcount. A meaningful conversation about efficiency starts with understanding how staffing aligns with how an organization invests.
At its core, the FTE report benchmarks staffing against funds with comparable investment models and implementation approaches. Rather than focusing on dollars, which vary widely across geographies, it focuses on the number of people, which is comparable globally.
Having run this analysis over fifteen years, we have learned that the majority of differences in staffing levels across funds are explainable. Asset mix, scale, and implementation decisions account for most of what we observe. For many organizations, this provides helpful context: headcount that may feel high internally is often much closer to benchmark once these structural drivers are taken into account.
Where the FTE report becomes especially valuable is in how those findings are used. For pension fund administrators and institutional advisors, this perspective has direct operational relevance. We see three frequent applications:
- Strategic discussions where our rules of thumb (e.g., private market assets require 4 times the number of FTE as same style public market assets) are helpful.
- Identifying areas based on deeply examining the 19 functions surveyed.
- Forecasting future talent needs by running what-if analyses in our FTE Calculator.
This emphasis on FTE also reflects a broader principle that underpins our work: high-quality, comparable data is essential for informed decision-making and accountability.
That same principle sits behind our Global Reporting Principles (GRP). Now in the second year of GRP scoring for Defined Benefit Investment Benchmarking subscribers, we are seeing encouraging momentum, with improvements across cost, performance, and timeliness. Timeliness, in particular, has improved, though gaps in underlying fee transparency continue to limit comparability.
As part of our commitment to raising data standards, submissions more than nine months after year-end will no longer receive a timeliness score beginning next year. It is encouraging to see leaders such as the New Zealand Super Fund publishing their GRP scores publicly. We believe this kind of transparency strengthens outcomes across the industry.
Before closing this letter, we would like to share:
Thanks, as always, for reading.
Rashay Jethalal
CEO, CEM Benchmarking
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