The financial advisor could be confounding clients with exotic investment terms that maybe even the advisor doesn’t really understand. Now more than ever, advisors need to be educators, and sometimes they need to educate themselves before they can educate their clients.

That’s what some officials of major money managers and industry observers said at a panel hosted by Charles Schwab on Wednesday at Russell Investments in Manhattan. The panel debated and defined some index investing terms.

Why the confusion?

There’s more than one way to weight an index or define the kind of investing that uses these indexes. So index investing, one of the most popular trends in the advisory industry, at the same time has also become difficult for the average investor. The problem is investment pros throw around terms that attract investors but also leave them unsure.

Take the terms “strategic” or “smart beta.”

“Whether we like it or not, I think the industry has gravitated to the term ‘smart beta,’” says Anthony Davidow, vice president, beta and asset allocation strategist at the Schwab Center for Financial Research.

Yet that has become a confusing term not only for investors but for some investment pros.

Still, it is well worth the effort to clear it up, panelists said. They said that strategic beta, if properly understood, defined and implemented, can produce superior performance, possibly adding another 2 percent a year in returns over the long term.

What is smart or strategic beta? Here’s where the fun began.

“Strategic beta -- often called smart beta -- often refers to a group of indexes and investment products that track them,” according to the Morningstar Strategic Beta Guide.

“The majority of these indexes aim to enhance returns to minimize risk relative to traditional market-capitalization-weighted benchmarks. Others try to address well-known drawbacks of standard benchmarks, such as the overweighting of debt-laden issuers to market-weighted fixed-income benchmarks,” according to Morningstar

Still, Ben Johnson, Morningstar’s director of passive funds research who presided over the panel, said “smart” and “strategic beta” actually mean the same thing. However, he prefers to use the term “strategic.” He argued that “smart beta” is a loaded term.

Strategic beta, Johnson adds, “is the melding of active and passive investing styles; it is the combination of a bet against the market is some form. But we’re doing it in a way that uses the basic elements of index funds.”

Strategic beta, he adds, is a mix of active and passive styles in which one obtains the best of both.

Whatever it is -- active or passive -- there’s no doubt that many investors are wondering about many of these terms.

Indeed, there’s nothing simple about this for the average investor, who is still trying to figure it out and needs an advisor’s help.

Luciano Siracusano, chief investment strategist at WisdomTree, doesn’t agree with Morningstar officials that smart beta is a loaded term.

“So, put simply,” in the booklet Wisdom Tree and Smart Data, “the difference between beta and smart beta may be the idea that smart data seeks to provide an exposure with the potential to outperform the market -- or generate better risk-adjusted returns than the market -- rather than merely measure the performance of all investable stocks in an equity market.”

These are the kinds of debates that apparently mystify many investors.

For example, 67 percent of investors “don’t know anything about smart beta,” said Schwab’s Davidow, but 72 percent want to understand what the term means.

Investors and advisors are interested in this strategy of taking elements of both an active and passive style. Nevertheless, there’s a lot of work to be done, most panelists agreed.

“We’ve got past the strategy of saying, ‘Do they work?’ Now we have to get to the point of people asking, ‘How do they work?’” Davidow said.