One of the questions we regularly discuss with advisers and within the Investment Committee is what actually drives long-term investor outcomes.
There is certainly no shortage of forecasts, predictions and market commentary. Some of it is insightful, much of it is entertaining, but in our experience successful investing is rarely about identifying the next market move.
Instead, it tends to come back to consistently getting a handful of important decisions right.
For most clients, those decisions are made through a partnership between the client, their adviser and the investment process supporting that advice.
The adviser helps define objectives, understand risk and build a financial plan. The Investment Committee provides research, manager selection, portfolio construction and governance. The client’s role is equally important, staying disciplined and following the plan during both good markets and bad.
When those three elements work together, the chances of achieving strong long-term outcomes improve significantly.
In our view, four factors matter most:
- Strategic asset allocation
- Manager selection
- Cost management
- Investor behaviour
A recent reduction in portfolio costs across the Aspen model range provides a timely example of how one of those factors, cost management, can benefit investors.
Costs matter, but only in the right context
Investment costs are one of the few things we can directly influence.
Every dollar paid in fees is a dollar that is no longer invested and compounding for the future. That doesn’t mean investing should become a race to the bottom. The objective is not to find the cheapest investment solution available. It is to ensure investors receive value for the fees they pay.
That’s why we regularly review manager fees, portfolio implementation costs and overall portfolio efficiency.
Over the past year, that process has resulted in meaningful reductions across the Aspen portfolios.
| Model | October 2025 | August 2026 | Reduction |
| Aspen Moderate | 0.769% | 0.579% | 24.7% |
| Aspen Balanced | 0.771% | 0.521% | 32.4% |
| Aspen Growth | 0.763% | 0.486% | 36.3% |
| Aspen Balanced Index | 0.361% | 0.331% | 8.3% |
| Aspen Growth Index | 0.351% | 0.298% | 15.1% |
| Aspen Sustainable Balanced | 0.838% | 0.622% | 25.8% |
| Aspen Sustainable Growth | 0.851% | 0.616% | 27.6% |
Take the Aspen Growth Model as an example. Total ongoing costs have fallen from 0.763% per annum to 0.486% per annum.
For an investor with $500,000 invested, that’s approximately $1,385 remaining in their portfolio each year rather than being paid away in fees.
Importantly, the fee reduction is not the story.
The story is that ongoing reviews, manager negotiations and disciplined portfolio oversight can create benefits for investors over time.
Start with asset allocation
Before selecting a manager or implementing a portfolio, the most important decision is usually determining the right asset allocation.
This is where advisers play a critical role.
Every client has different goals, time horizons, income requirements and attitudes towards risk. Advisers help translate those factors into an appropriate investment strategy.
For advisers using managed account portfolios, such as the Aspen models, they are able to leverage the research, governance and portfolio construction work of the Investment Committee. That doesn’t replace advice. Rather, it allows advisers to spend more time focusing on strategy, client outcomes and financial planning.
We continue to believe that strategic asset allocation remains the single most important investment decision made on behalf of clients.
In simple terms, getting the balance between growth and defensive assets right will generally have a greater influence on long-term outcomes than attempting to predict short-term market movements.
That doesn’t mean tactical positioning has no role. However, experience has taught us that modest, considered adjustments are often more effective than large portfolio shifts driven by near-term market views.
Markets have a habit of surprising everyone.
Manager selection still matters
Once the strategic allocation is established, attention turns to implementation.
This is where manager selection becomes important.
Every manager within a portfolio should be there for a reason and continue earning their place.
That means regularly reviewing existing managers, assessing new opportunities and challenging assumptions.
Performance is important, but it is only one part of the equation. Governance, process, portfolio fit, risk management, stability and cost all play a role.
One of the less obvious benefits of this process is that it helps maintain competitive tension. Managers know they are continually being assessed against alternatives, which ultimately benefits investors.
Looking beyond headline fees
One of the more interesting pieces of work undertaken recently was a review of 399 managed account portfolios.
The findings reinforced something we have long believed.
The average model manager fee across the peer universe was 25.7 basis points. The average total portfolio cost was 95.6 basis points.
Perhaps most interestingly, the relationship between model manager fees and total portfolio costs was surprisingly weak.
In practical terms, a portfolio with a lower headline fee was often not the lowest-cost solution once all underlying costs were considered.
This is why we spend considerably more time looking at total investor costs than individual fee lines.
Investors don’t experience a model manager fee in isolation. They experience the total cost of implementing an investment strategy.
The value of advice and disciplined behaviour
The final factor is investor behaviour.
Ironically, it is often the most important and the one over which investment managers have the least influence.
Some of the best investor outcomes I have seen over the years have not come from identifying a particularly clever investment.
They have come from investors who stayed committed to a sensible plan.
For many people that means continuing to contribute to superannuation, investing regularly, managing debt sensibly and avoiding emotional decisions during market volatility.
For retirees, it often means spending sustainably and maintaining confidence in the plan during periods of uncertainty.
This is where good advice becomes invaluable.
When markets become unsettled, advisers provide context and perspective. They help clients focus on what matters and avoid reacting to every headline.
In many respects, advisers bring all of these elements together. Asset allocation, manager selection, cost management and investor behaviour only create value when they form part of a well-considered financial plan.
Final thoughts
The recent fee reductions are a positive outcome for investors, but they are really just one example of a broader investment philosophy being applied over time.
Focus on the big decisions.
Build portfolios around sensible long-term asset allocations.
Select quality managers.
Manage costs thoughtfully.
Stay disciplined when markets become volatile.
And work closely with your adviser to ensure your investment strategy remains aligned with your long-term goals.
In our experience, those decisions are far more likely to drive successful outcomes than any market prediction ever will.
Marshall Brentnall
Chief Investment Officer
Chair, Principal Edge Investment Committee
