120: Stanford University's Ashby Monk - The Future of the Pension Industry

In this episode, I speak with Ashby Monk, who is Executive & Research Director at Stanford Long-term Investing, a part of Stanford University in California. Ashby has been advising most of the large superannuation funds in Australia on governance, organisational efficiency and knowledge management. He is a regular visitor to our country, and has been here 55 times. We discuss the future of the superannuation industry and the role of innovation. Unsurprisingly, this means that we spend a fair amount of time talking about artificial intelligence and the changes it might bring to the industry. Ashby is of the opinion that it will be transformational, while initial problems such as hallucinations are quickly being dealt with. What does AI mean for the super industry? Well, consultants might be in trouble as AI systems will come to play a critical role in providing alternative views or in red teaming. Asset managers, too, will come to feel the heat, and boards might want to add directors with deep technological knowledge. Enjoy the Show! ________ Follow the Investment Innovation Institute [i3] on Linkedin Subscribe to our Newsletter Explore our library of insights from leading institutional investors at [i3] Insights ________ Overview of Podcast with Asby Monk, Stanford University 03:30 I've never met a pension fund with an R&D unit. 09:00 I've seen Australia as the future of pensions 10:00 People in Australia don't quite know how cool it is, the member first culture 12:00 There is no professional School of Investing in the world; it is an apprenticeship 16:00 The secret sauce for a pension fund is in understanding your own advantages, weakness and goals 20:00 You can have a culture of knowledge sharing or a culture of secrecy and I don't think you need to do much more than to say those words to understand what is implied 22:30 What attracted me to the asset owner industry is that it is a mission-driven culture 26:00 The AI boom…, everybody acknowledges that particularly our industry is going to be transformed 28:00 AI for knowledge management; the hallucinations are starting to go away. We are very close 32:00 Red teaming with AI; ask to replicate what your analysts are doing to see if you get a different view 33:00 Consultants might be in trouble, unless they move fast towards AI 34:00 Anybody who provides advice…, even me, you could probably ask an AI: 'How would Ashby respond to this idea?' 36:00 The big asset managers that we can think of right now, their existence is threatened 37:30 There are about eight Australian super funds that can be world role models 39:00 I often ask: 'Who on your board has technological expertise?' and the answer is often 'none'. 41:00 Deep thoughts to conclude "The 'Investor Identity': The Ultimate Driver of Returns" by Ashby Monk and Dane Rook, 2023 Full Transcription of Episode 120 Wouter Klijn Ashby, welcome to the show. Ashby Monk 02:27 Thank you so much. It's an honour to be here. Truly. I think that if I didn't have my job, I would want your job. Wouter Klijn 02:35 It's pretty fun. Ashby Monk 02:39 Yes, you know, because the investment Innovation Institute almost sounds like my life's work, but you've already got it, so I'll have to find something else. But it's, it's a it's a pleasure to be here, in large part because I think you and I are working on very similar things. Wouter Klijn 02:57 Thank you very much for that. And you also have your own podcast, which has an interesting name of 'Don't get fired'. Why did you choose this title, Ashby Monk 03:05 Don't get fired Podcast, yeah, so that is meant to celebrate the heroic nature of innovation and institutional investment. Oftentimes, I'm sure you're aware the pathway to doing creative things, especially as it relates to the asset owner side of things, that pathway generally flows through a courageous person that is deciding, I'm going to do things differently, and in the process, generally takes career risk. And so the don't get fired podcast is meant to be somewhat funny, but it's also meant to acknowledge, like, we don't have standard pathways of innovation in this industry. You know, I've never met a pension fund with, like, a well formed R and D unit. Oftentimes, it's just a person who is ready to take on a challenge and and I think we do need R and D units, and so the podcast is all about different pathways to innovation. Wouter Klijn 04:06 Yeah, yeah. It's interesting because I think that's my cat. Ashby Monk 04:13 Hello Kitty. That's a perfect that cat wants to talk to us about innovation, Wouter Klijn 04:16 Exactly, but yeah, no, it's, that's, that's interesting because I listened to your last episode with Mark Delaney, and he made a reference to that where, I think, before he joined the superannuation industry and became CIO, now of Australian super, he worked for an insurance company. And he said, he sort of made his remark that at the beginning, ...