No, a mutual fund with 1-2% MER is not the same as an ETF with 0.25% MER. One of them steals half your money while the other does not.

it would be stupid for a bank to promote and sell investments that purposefully underperform

1. Nobody said purposefully. It doesn’t need to be purposeful for the stats to play out returns are lower for active management.
2. I just explained how there are literally massive financial advantages to them selling these funds.

Believe it or not it is very financially lucrative to drain up to half of people’s retirement funds while disguising it under opaque language they know people won’t understand (like MER, brokerage fees) while “”justifying”” their fees with hopes that they would outperform the market (which they don’t).

Sorry to break it to you but your parents were raised in a world where we had less data on these things. We now know their work over the years drained people of their money and siphoned it up to banks.

They didn’t need to be conscious of it for that to be the effect. That’s simply what happens. And because these are risk adjusted opportunity costs people don’t know better.

Moreover your parents worked in a market when 0.25% MER All in One ETFs didn’t exist. So it’s a moot point.