There is only individual intelligence, which can act with other individuals. That is, there are only individual investors - actors - whether we're talking about retail or hedge funds or even AI bots. There's no seven million headed investor automagically sharing a brain and its accumulated wisdom. The point being, each investor that is acting on the market, is acting from different conclusions (even off of exactly the same data), with different intent, and with different capability of deduction and discipline and implementation and so on.

Most of the professional investors that manage money for others are not very good at generating returns. They tend to be horrible at taking advantage of the vast market inefficiencies that made Warren Buffett and dozens of other famous examples possible. To make matters much worse, said mediocre professional investors then make their money by skimming off the capital they manage. When that's your scenario, index investing will always make sense. The only time it doesn't, is if you possess numerous rare attributes that make it possible to take advantage of the inefficient market, or if you can find a rare someone to trust your money to that can do so.