So, here’s the deal.
You give me your money. I charge you an ongoing fee for the privilege of looking after it. And in return, I give you about a one-in-ten chance of doing better than you’d have done buying the index and going to the pub.
Sign here. Initial there. Welcome aboard.
That’s the offer. I’ve cleaned up the wording — it doesn’t usually get said out loud quite like that — but strip the polish off and that’s the proposition. The strange part isn’t that someone’s making it. The strange part is how many advisers have decided this is the bit of the job they want their name on. Their own model. Their own portfolio. Their firm’s logo on the top of the page, sitting above a number they can’t control and didn’t earn.
If that stung a little, good. Stay with me.
A confession before we go on
I’m not throwing stones from a glasshouse I’ve never lived in. I’ve made this exact mistake.
I’ve sat across the table and talked about our investment view. Our positioning. The calls we were making on markets — as though the value I brought to that person’s life turned on whether I’d correctly guessed what the next twelve months held.
I hadn’t. Nobody had. That’s the whole point.
So this isn’t a sermon. It’s a note from someone who believed the pitch, said it with a straight face for years, and only later sat down and did the arithmetic.
The arithmetic
Twice a year, S&P Dow Jones publishes the SPIVA scorecard. It does the unglamorous work of checking whether active funds actually beat the index they measure themselves against. The Australian Year-End 2025 edition landed in March. As usual, it reads less like a report and more like a charge sheet.
Over fifteen years, 87% of Australian Equity General funds underperformed the ASX 200. Global Equity is worse — north of 95% over the same window. These aren’t funds run by amateurs. They’re run by full-time professionals with research teams, Bloomberg terminals, analysts three deep, and a single job: beat the index. Nine in ten of them can’t, and the longer the clock runs the fewer survive.
Now read that back and put yourself in the picture.
You don’t have the research team. You don’t have the terminals. You have a platform, a model-portfolio tool, a few hours between client meetings, and the same market everyone else is looking at. And the proposition you’re quietly making — the one stitched into the logo at the top of that statement — is that you’ll be the exception the professionals can’t manage.
On what evidence?
“But mine’s mostly index funds”
I know. I can hear it from here.
“Phil, my branded portfolio is mostly low-cost ETFs. I’m not pretending to be a stock-picker. It’s diversified, it’s cheap, it’s sensible.”
Fine. It might well be. But hear what the client hears.
The moment your name goes on the top of that portfolio, you’ve made a claim — whatever the contents. You’ve said, in effect, this is mine, I built it, I manage it, this is the thing you’re paying me for. You’ve anchored your value to a number on a page that moves whether you turn up to work or not.
So the day the market has a bad year — and it will — the conversation isn’t “how are we tracking against your life?” It’s “why is your portfolio down?” You built the rod. Don’t be surprised when the client picks it up.
And here’s the part that should bother you more: if it really is just cheap index funds in a nice wrapper, what exactly is the margin for? You’ve taken on the liability, the look, and the implied promise of a fund manager — to deliver something a client could’ve bought for a handful of basis points without you. You’ve kept all the downside of the pitch and quietly skipped the bit where you actually add value.
What you’re actually being sold
The platforms love this trend, and you can see why. A branded portfolio makes your book stickier. It makes you feel like you’ve built something. It dresses beautifully in a credentials deck.
It is also, conveniently, a way to make you feel differentiated without doing the hard thing that actually differentiates you. “I run my own portfolios” sounds like a moat. It isn’t. It’s a trapdoor. Every adviser down the road can build the identical thing on the identical platform by Friday. You haven’t built a moat. You’ve built a commodity and put your face on it.
The genuinely differentiated advisers I know don’t lead with their portfolios. Half the time you have to drag the investment philosophy out of them, because they treat it as plumbing — necessary, well-built, not the point.
What the client is actually paying for
Here’s the bit the swear-by-it crowd will skim past, so I’ll say it plainly.
No client lies awake at night worrying about their tracking error.
They lie awake about whether they can stop working before their body gives out. Whether they’ll be a burden on their kids. Whether the business they’ve poured thirty years into is worth what they think it is. Whether they can say yes to the wedding, the house deposit, the year off, without quietly torching the plan.
That’s the job. Not beating the index — sitting on the same side of the table as someone navigating the most consequential financial decisions of their life, knowing them well enough to tell them the truth, and being the person they call before they call anyone else.
You cannot buy that on a platform. You cannot index it. You cannot replicate it by Friday. It is the one thing in this entire industry that genuinely doesn’t show up in a SPIVA table — because it was never about the returns.
The fee you’ve been too nervous to charge
This is the line the doubters need to read twice.
If you’ve been propping your fee up with investment management — look at the work that goes into the portfolio, look at the rebalancing, look at the research — you’ve been defending the wrong number with the wrong argument. And somewhere in the back of your mind you know it, because the SPIVA data means you’re defending a service you can’t reliably deliver.
The advisers charging well above the average aren’t doing it on the strength of their model portfolios. They’re doing it because they’ve made themselves genuinely, structurally hard to replace in their clients’ lives. They know things about those clients no platform will ever hold. They’ve earned the call before the big decision. That commands a premium — and it’s a premium you can defend in any market, in any year, against any benchmark, because it was never benchmarked in the first place.
You don’t need a better portfolio to justify a higher fee. You need a better proposition. And the good news — if you’re one of the advisers reading this with a slightly uncomfortable feeling — is that the better proposition is the one you’re actually good at. You’ve just been hiding it behind a logo on a statement.
So, the offer still stands
One-in-ten odds. An ongoing fee. Your name on a number you can’t control.
Or the harder, better thing: be the person who can’t be indexed, can’t be replicated, and can’t be replaced — and charge accordingly.
Take the portfolio off the pedestal. Take your name off the returns. Put it where it belongs — on the relationship.
That’s a business worth building. The other one’s just a fund you’re not qualified to run.