1/n A quick clarification on today’s fee-cut debate: A 5 bps fee reduction is not “bad.” It’s also not “meaningful” to long-term investor outcomes. What is meaningful is the structural impact of a dominant player cutting fees to levels that are uneconomic for new entrants and therefore anti-competitive.

2/ The narrative that “cheaper is always better” only holds in a market where:    •   competition functions,    •   entrants can survive,    •   liquidity is robust, and    •   scale doesn’t create systemic externalities. Indexing no longer fits those conditions. Fee compression has become a barrier to entry, not a consumer benefit.

3/ The difference between 22 bps and 17 bps is irrelevant to investor returns over a 40-year horizon. But it is absolutely relevant to whether any firm without $10T in AUM can innovate, experiment, or compete. That’s the distinction lost in “all else equal” compounding math.

4/ When the largest asset manager in history runs funds with negative cash balances, has trillions of dollars of daily mechanical flows, and faces no meaningful regulatory liquidity requirements, the question isn’t: “Are they cheaper?” It’s: “Is this structurally safe?”

5/ A firm of that scale should be treated like a SIFI: required liquidity buffers, stress testing, and transparency around cash management. Instead, industry incentives have converged on a single metric—lowest cost—that reinforces concentration and erodes resilience.

6/ If the only viable business model is “match a trillion-dollar incumbent’s price,” then innovation dies. Not because investors are harmed by fees, but because the market structure no longer allows competition on anything but fees. That’s not capitalism. That’s ossification. And it has led to today’s market where “innovation” is assembling increasingly unthoughtful product that falls under “buyer beware”

7/ So yes—5 bps is trivial for an investor. But it is far from trivial for the system. The problem isn’t “fees.” The problem is the incentive architecture that ties fiduciary duty to price alone in a market where “price” is set by a near-monopoly with “unique” distribution power.

8/8 It’s entirely possible to celebrate lower costs and recognize that the race to zero has crossed the line from “investor benefit” into “competitive moat” and “systemic risk.” Both can be true. Ignoring the structural side because the price moved down is not analysis. It’s applause.