A friend got taken in by a Ponzi scheme operator several years ago. The guy running it was known for taking his clients out to lavish dinners and events all the time.[0]

After the scam came to light my friend said “if I knew I was paying for those dinners, I would have been fine with Denny’s[1]”

I wanted to tell him “you would have been paying for those dinners even if he wasn’t outright stealing your money,” but that seemed insensitive so I kept my mouth shut.

0 - a local steakhouse had a portrait of this guy drawn on the wall

1 - for any non-Americans, Denny’s is a low cost diner-style restaurant.

He earns his undies. My returns are almost always modestly above index fund returns after his fees, though like last quarter, he’s very upfront when they’re not. He has good advice for pulling back when things are uncertain. I’m happy to delegate that to him.

I’m not saying you’re wrong because I have no idea how to rigorously evaluate the merit of your financial advice. That’s why I have a financial planner instead of going by the most credible sounding comments on the internet.

Not all investing is throwing cash at an index, though. There's other types of investing like direct indexing (to harvest losses), muni bonds, etc.

Paying someone to match your risk profile and financial goals may be worth the fee, which as you pointed out is very measurable. YMMV though.

Most index funds are synthetic. They would not be possible if it was not possible to beat the index quite reliably.

Care to explain? Genuinely interested.

With a synthetic ETF you are not actually buying the titles of the index. There is a swap with a bank that guarantees you the same earnings as the index. Why would a bank do that if they cannot outperform the index?

I'm just a layperson, so I might be wrong in some way that I don't understand

Depends who's pitch deck you're reading. Warren Buffett didn't get rich waiting on index funds.

And for every Warren Buffet, there are a number of equally competent people who have been less lucky and gone broke taking risks.

And, crucially, whose loss has in turn become someone else’s gain. A lot of people had to lose big in order to fill Warren buffet’s coffers.

I think Warren Buffet doesn't just buy stocks. He also influences the direction of the companies he buys.

warren buffet got rich by outperforming early (threw his dice well) and then using that reputation to attract more capital and use his reputation to actually influence markets with his decisions / gain access to privileged information your local active fund manager doesn't