Investors to get cheaper funds after watchdog action.

Investors will save £1bn in fees after the City watchdog ordered asset managers to cut the costs of funds.

Investors who are in old versions, or share classes, of funds must be shifted to the cheapest version as soon as possible, following a landmark review of the asset management sector.

The Financial Conduct Authority (FCA) has told asset managers that they must automatically switch investors to cheaper versions of funds.

Research company Fitz Partners said that a third of investor money may be in old share classes of funds. It estimates that investors are paying £1bn a year too much in fees to asset managers, with an average overpayment of half a percent on each fund.

By Laura Suter.

Full story at Yahoo News.