Personal Investing: Outperforming Passive Funds
Distractions in Personal Investing: Passive funds aren't always the best.
A framing fallacy occurs when an argument highlights a weakness without acknowledging the context that renders it irrelevant or outweighs it with strengths. MoneyHub avoided this, but it wasn't generous!
This is exactly what happens when a single negative point overshadows a positive outcome.
While it's important to understand clients’ goals and life context, the ultimate purpose is to actively help them achieve those goals and enrich their lives.
A recent helpful MoneyHub Article had the heading:
"The 10 Biggest Wealth Destroyers in New Zealand (and What Each One Can Cost You).
No. 10 was headed:
"Staying with an underperforming financial adviser - an estimated $7,000+ a year" on a $400,000 portfolio.
The article highlighted the low costs of Index/Passive Funds, which you can buy directly. No advisory Fee!
Supporting MoneyHub’s point is the underperformance of many Fund Managers and adviser portfolios.
The two excellent questions MoneyHub recommends asking an adviser are:
1. What is my all-in cost across every layer, in dollars, and
2. Has my portfolio beaten a comparable index fund (such as a growth or balanced index fund) after all fees over the last five years?
At Strategic Financial Planning, we welcome those questions — because our results answer them.
The article concludes, "If the value is clearly there, that's a good outcome - quality advice on tax, structure and behaviour can be worth well beyond its fee."
Has Strategic Financial Planning outperformed a comparable Index Fund? Yes! Have we added value? Yes!
It is good to celebrate success!
Here is our data: August 2026
This is where Strategic stands out. Our real client portfolios have consistently outperformed the major passive options (Simplicity, Kernel) and even active managers (Fisher).
Performance Comparison (Annualised Returns)
After all fees but before tax, 1m+ portfolios
Client A — Balanced Portfolio
· 3 years: 16.01% vs Simplicity 10.22% → +5.79% per year
· 5 years: 8.12% vs Simplicity 5.62% → +2.50% per year
Client B — Growth Portfolio
· 3 years: 23.14% vs Simplicity 12.81% → +10.33% per year
· 5 years: 12.77% vs Simplicity 7.79% → +4.98% per year
Client C — Balanced Portfolio
· 3 years: 12.77% vs Simplicity 10.22% → +2.55% per year
· 5 years: 9.65% vs Simplicity 5.62% → +4.03% per year
Kernel (for context)
Balanced 3‑year: 12.05%; High Growth 3‑year: 16.35% (No 5‑year data available)
So, the overall annual net fee (tax @30%) is around 1%. Strategic has added value.
Unlike providers of Index solutions who frame everything around low fees, we focus on delivering value that helps clients achieve their goals.
Every investment, every asset class, every piece of advice needs to add value. No single strategy has the complete answer, and no one strategy will always dominate. Life is dynamic. We need to be eclectic. As Keith McCullough, CEO of Hedgeye Research and one of our research streams, puts it:
“Frozen snapshots of something that never stopped moving. That's not vision. That's a photograph of a verb.”
Let’s show the elephant in the room: greener pastures
The Fee Question: Strategic’s 1% vs Passive Fees
MoneyHub’s headline claim: “An underperforming adviser can cost you $7,000+ a year.”
Our data shows the opposite: Strategic’s advice adds between 2.5% and 10.3% per year depending on portfolio type and timeframe.
On a $1m portfolio, that is $25,000 to $103,000 in additional return per year — net of fees.
Thanks to MoneyHub for providing the motivation to share Strategic’s value proposition
