Super funds deliver consistent long-term returns through structured process. The mechanics of that process are not proprietary, and they translate into the mid-market more directly than most advice firms assume.
The Chant West median growth fund returned 9.3% for the 2025 calendar year (net of investment fees and tax, before administration fees). That came on top of 11.4% in 2024 and 9.9% in 2023. Three years stacked, almost 35% growth, for the average member of a balanced or growth super fund who did nothing other than stay invested. The long-run figure tells a quieter story. Since compulsory super began in 1992, the median growth fund has returned 8% a year, against an inflation rate of 2.7%, for a real return of 5.3%, comfortably above the typical CPI+3.5% objective.
Many advice firms running their own model portfolios cannot point to an equivalent track record, not necessarily because performance has been worse, but because the measurement framework to know hasn’t been built. There is no Chant West for advice firm portfolios. No public benchmark, no standardised reporting, no long-run dataset. Many firms cannot produce, on request, a documented performance history of their model portfolios measured against a stated objective over rolling periods, with attribution showing what drove returns, what detracted, and whether the outcome came from the strategy the IC approved or from market beta that could have been accessed more cheaply. That gap is itself a governance finding.
There is a tendency in advice industry commentary to treat institutional investors as a different species. Bigger budgets, bigger teams, access to managers that retail platforms cannot get to. Some of that is real. The bigger story is that super fund investment offices use a structured process for SAA, manager selection, and implementation, and they apply it with discipline that is more about governance than insight. The components of that process are not proprietary. They translate into a 5 to 50 adviser firm with surprisingly little adaptation. The reason advice firms have not adopted them is not capability. It is that no one has packaged them for the mid-market in a way that fits a typical advice business.
What follows is the playbook, in three parts.
Strategic asset allocation is the largest contributor to portfolio outcomes over time. As Investment Magazine reported in July 2025, drawing on Chant West’s research, a fund’s strategic asset allocation remains the primary determinant of long-term performance. For a typical growth fund that means roughly 31% international shares, 25% Australian shares, and a defensive sleeve including unlisted property, infrastructure, fixed interest, and cash. The exact numbers vary by fund. The discipline is the same.
What institutional investors actually do is treat SAA as a continuous process. The default cadence is an annual review with formal capital market assumptions, refreshed expected returns, refreshed correlations, and a reconsideration of the portfolio’s ability to meet its CPI+ objective across a forward-looking range of scenarios. The review is documented. The assumptions are written down. The decision is minuted, and the SAA itself sits inside an investment governance framework that defines the IC’s authority to vary it.
Most advice firms that run model portfolios do something different. They set an SAA at inception, often informed by a research house’s strategic guidance or a platform’s default settings, and they revisit it when something obvious forces the question. Markets fall. A client complains. A new economic regime appears in the headlines creating distractions. The review is reactive rather than scheduled, the inputs are not formally refreshed, and the change, when it happens, is rarely captured in a way that would survive a regulator looking at the file.
The translation for a firm is not to recreate a super fund’s investment office. It is to schedule the SAA review (annually is standard, semi-annually for firms that want to be more responsive), document the capital market assumptions used, record the rationale for any change, and ensure the IC minutes show the analysis. None of this is expensive. It is, however, structurally different to how most firms operate.
Institutional manager research starts where research house ratings end. A Recommended or Highly Recommended rating tells the IC the fund has cleared a baseline set of operational and process tests. It does not tell the IC whether the manager is the right fit for the mandate the IC is trying to fill, whether the fee load is justified relative to alternatives, or whether the manager’s edge has eroded since the rating was last updated.
The institutional process layers on three things that advice firms typically skip. First, mandate fit: a clear articulation of what role this manager is playing in the portfolio, and what outcome would prompt a replacement. Second, operational due diligence beyond the research house: a direct read of the manager’s investment process, key person risk, capacity constraints, and conflicts. Third, performance attribution: whether the returns the manager has delivered are coming from the source the IC was paying for, or from incidental beta exposure that could have been bought more cheaply elsewhere.
None of these layers requires institutional scale to apply. They require a framework. A 50-adviser firm can adopt a simplified version: a one-page mandate sheet for each manager on the APL, a documented annual review against that mandate, a basic attribution analysis from the platform or the manager’s factsheet, and an explicit replacement trigger. What it cannot do is replicate this work across 30 managers, four asset classes, and a global universe of available products on its own. That is where the consultant relationship earns its fee at the institutional level, and where it can be ported to the mid-market.
The third part of the institutional playbook is the one that gets the least attention in advice industry commentary, and it is the one where the gap between intention and reality tends to be largest. Implementation is the question of whether the portfolio the client actually holds matches the portfolio the IC has approved. For super funds the answer is yes by construction. The fund is the portfolio. For advice firms running individually managed client portfolios, the answer is often no, and the reasons are mundane: legacy holdings the client refuses to sell, tax considerations on rebalancing, platform constraints on available products, advice authorisation gaps that delay implementation of a model change.
The institutional discipline is to close that gap by design. Funds use unitised structures and pooled implementation, which means a strategy change at the IC level flows through to every member portfolios far more quickly than in individually managed structures. Advice firms have access to similar architecture through managed accounts (SMA and MDA), but the take-up has been uneven. Some firms run them at scale. Others run model portfolios that exist as recommendations rather than instruments, with the result that the average client portfolio drifts measurably from the model over time.
The forward question for the IC is not whether managed accounts are appropriate for every client. It is whether the firm has a clear view, by client segment, of how implementation will happen. A model portfolio that is not implemented consistently is a research output, not an investment service.
The institutional playbook is not a one-quarter project. The components are interlocking, and a firm that bolts on a quarterly SAA review without addressing manager research or implementation will end up with better minutes and the same drift. The realistic 12-month sequence for an advice firm starts with the function of the IC itself: who sits on it, how often it meets, what authority it has to vary the portfolio, and how decisions are recorded. From that foundation an SAA framework, a manager research process, and an implementation review can be built in turn.
For most firms this work cannot be done from internal resources alone, for the reasons set out in our article on the governance gap. The institutional answer to capacity constraint is to retain a consultant who provides the framework, the analysis, and the second pair of eyes, while the IC retains the decisions and the accountability. That model has supported the long-term performance of Australian super funds for several decades. The firms that adopt it through 2026 will not just be reducing their regulatory exposure. They will be running portfolios on the same structural basis as the funds whose returns set the benchmark their clients compare them to
Sources:
James Tomkins is a Senior Asset Consultant at Vertex Investment Services, a specialist asset consulting partner for advice firms and licensees.
