The idea that the buy side is less sophisticated than the sell side (or the new breed of participant the HFTs) is plain false. Their whole value proposition (how they justify that 2 & 20 they charge) is that they are sophisticated players in the market that can deal with these complexities. For instance, I've written HFT software for a buy side firm.
To put this into prospective, there are single buy side firms that are bigger than the entire HFT market making industry.
2 & 20 is exclusively the preserve of hedge funds, an entirely different animal to large-scale institutional asset managers who make up the bulk of the buy side.
There's no arguing with the sophistication of the portfolio management side of institutional AM's - these are smart, well-compensated people with excellent tools and first-class support from their own companies and the street's research. Once you get to the buy side trading desk - the people responsible for implementing the decisions of the PMs, and the people who are dealing with this rapidly-changing, fragmented market - things become different.
To put this into prospective, there are single buy side firms that are bigger than the entire HFT market making industry.