M&G Investments has reduced charges on 90% of its funds' share classes and moved to a single-fee model in a bid to simplify its client charges.
From 1 August, UK OEIC investors will be charged an ongoing charge figure (OCF) that includes a single annual charge and "extraordinary expenses". Transaction costs will be charged on top.
M&G is also introducing a discount to funds with over £1bn in assets under management (AUM).
Under the new charging system, a 2 basis points (bps) discount will be applied to funds with over £1bn in AUM, which increases by 2bps for every £1bn in the fund up to those with £6bn in AUM, at which point the cut is capped at 12bps.
Of M&G's current product range, 12 funds benefit from the discounting mechanism; Global Dividend - the A-share class of which will save £3 on a £1,000 investment, while the I-Share class will save 50p.
The other funds affected are Dividend, Recovery, Global Themes, Global Macro Bond, UK Inflation-linked Corporate Bond, Global High Yield, Corporate Bond, Strategic Corporate Bond, Optimal Income, Property Portfolio and Feeder Property Portfolio.
Discounts will remain intact if a fund's assets dip just below a given threshold, with a buffer of £100m.
Meanwhile global head of distribution Jonathan Willcocks told Investment Week the firm is taking a "more aggressive stance" to other funds, which do not have the assets required for the discount mechanism.
For example, The Absolute Return Bond's I-share class's annual charge will reduce from 0.72% to 0.6%, Global Listed Infrastructure will fall from 1.1% to 0.85%, and North American Dividend will fall from 0.91% to 0.7%.
Willcocks said: "We are making our charges much easier for our customers to understand while reducing prices on many of our OEIC funds.
"We have wanted to do this for a while, but we wanted to get our Brexit migration programme finished, which we completed in March, splitting our retail assets into a pool for UK investors and one in Luxembourg for international investors.
"Over the last few years, we have been speaking to clients about our charging structure.
"We recognise pricing pressure and the growing total cost of ownership, but we also heard consistently that they wanted a more simple charging structure. So we replaced the separate charges making up the OCF with a single annual charge, which is lower than the current OCF."
He added that the changes also offer adviser clients greater "predictability" as the cost is fixed.
Head of active portfolios at AJ Bell Ryan Hughes agreed the changes "will make it easier for investors to know how much they will actually pay in fund costs each year".
He added: "Most investors do not know how much audit fees or share class hedging costs, they just want to know how much they will pay for the fund each year."
However, he said M&G's funds "can be quite expensive compared to similar funds and this move does not change that".
Hughes explained: "It still has administration costs higher than the best in the industry, particularly for its larger funds where historically it has not shared the efficiencies of scale with customers.
"Investors also need to remember that the 'one simple fee' isn't quite that, as transaction charges will be levied on top."