The Cost of Progress, and What Comes Next: A Discussion with Prerna Mathews, Mackenzie Investments

 

There is a book on my shelf that I return to often. John Bogle's Enough is not a long book, and it is not a complicated one. But it changed how I think about this industry and, honestly, why I decided to build my own practice.

Bogle's central argument is almost disarmingly simple: costs compound against you the same way returns compound for you. Every dollar that leaves your portfolio is a dollar that never compounds. Over a career of saving and investing, that arithmetic is brutal.

He was demonstrably right, and the success of passive investing and the influence it has had on money management proves it so.

But there is a second argument in Enough that gets far less attention. Chapter 2 is titled "Too Much Speculation, Not Enough Investment." Bogle's worry was not just that investors were being overcharged. It was that financial innovation, left unchecked, produces complexity most people cannot navigate, and that complexity quietly turns investing into speculation without anyone quite noticing.

In the effort to fix one problem, another has emerged. Thoughtful guidance, at a fairer price than in Bogle's day, may be more needed than ever.

I wanted to explore these ideas with someone who has been at the centre of this transformation.

Prerna Mathews helped build Vanguard Canada's Exchange Traded Fund (ETF) business and now leads product innovation at Mackenzie Investments. She also serves as Vice Chair of the Canadian ETF Association. She has watched the Canadian investment cost story unfold from essentially every angle, as someone inside the low-cost revolution and now as someone building the next generation of products.

I asked her to help me think through something I genuinely believe: that the cost transparency battle in Canada has largely been won, and that CRM3 (Total Cost Reporting), now in effect, is the completion of a chapter rather than the opening of a new one. The industry deserves real credit for how far it has come. The ban on deferred sales charges. Client Relationship Model reforms. The ETF explosion that forced every product to compete on value. These were meaningful changes for investors, and they happened.

Prerna put it plainly: "I don't think we get our due respect for all the work we've done as an industry collectively."

For investors, that work has translated into something tangible: more choice, lower costs, and for the first time, a genuinely clear picture of what everything actually costs. If you have never had that clarity before, CRM3 is the moment it arrives.

The same product innovation that drove costs down and gave investors genuine choice also produced something Bogle warned about. As Prerna noted, and I thought this took real candour coming from someone who builds products for a living, "there can also be too much." Products that reset daily. Levered strategies built for traders, not long-term investors. Things that went to a net asset value of zero because the people holding them did not understand what they had bought.

"It's going to hurt for some, unfortunately."

That is not an indictment of the industry. It is an honest observation about what happens when choice outpaces understanding, and it points directly to what I think the next conversation has to be about.

More education. Not more disclosure.

The advisor's job, in a world where getting basic market exposure costs almost nothing, is not primarily product selection. It is helping clients understand what they own, why they own it, and what it is supposed to do for them over time. That is a harder job than it sounds. It is also a more valuable one.

We also talked about where the real transparency gaps still exist: liquid alternatives, private assets, the regulatory divergence emerging between Canada and the United States as products get approved south of the border that would never pass a Canadian regulator. There is meaningful work still to be done, just not on the cost disclosure front where so much energy has already been spent.

The full conversation is worth your time. Prerna is sharp, candid, and willing to say things that are not always easy to say from inside the industry. I walked away genuinely energized.

Watch or listen below.

 

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Prerna mentioned one book worth adding to your list: Capital Returns by Edward Chancellor. An underrated read on market cycles and what drives divergent behaviour across sectors. Highly recommend.