That was definitely the first time I have been accused of being too kind to financial planners. On the whole I agree with Adam Schwab’s point about my column in The Age and the SMH that index funds, also known as passive investments, generally do better than actively managed funds that cost more to run, and that investors are usually better off not trying to pick which of the managed funds will perform best and putting their money into an index fund.

To that I would add exchange trade funds (ETFs), which do the same thing but are listed on the stock exchange like company shares, and also many listed investment companies like Argo Investments and Australian Foundation.

But to suggest that ordinary investors should never go to a financial adviser and should just whack their money in is going too far. Good advisers do more than flog managed funds: they’ll advise on a saving plan, discuss risk tolerance and asset allocation and advise on tax structures and retirement RBLs. It’s true that an accountant could handle many of the tax related issues, which is why I think financial planners should get paid like accountants – by the hour.

In my view the best outcome would be a network of decent investment advisers who people can trust – that is, uncorrupted by sales commissions. But I agree with Adam Schwab that the only viable alternative to that is no advice at all.