Chelsea Financial Services is to reduce its fee from 0.5% to 0.4%, but the broker firm has said it is prepared to pay more for long term returns.
From 6 April, the Cofunds platform fee - which Chelsea uses - will fall from 0.25% to 0.2%, while the firm has promised 'additional savings' for investors with more than £250,000 invested with Chelsea.
'We are not slashing prices just to play the volume game; we want the best possible outcome for our clients,' the company said.
'So while Chelsea will always try to keep costs as low as we can for our services, the platform we use and the funds we rate, it won't stop us selecting a fund that is perhaps more expensive than it's peers if we think long-term returns will prove to be much better.'
Managing director Darius McDermott added: 'There is always someone who will do a job cheaper, but that doesn't mean they'll do it better. It pays to read the small print that comes with some of the so-called low-cost deals which have been announced in the past few weeks. With Chelsea, there are no additional charges, just simple, predictable pricing.'
Cofunds and Chelsea fees will be taken separately from each investor, and will use a tiered structure.
For up to 250,000 invested, Cofunds' platform fee will be reduced from 0.25% to 0.20% and Chelsea's fee reduced from 0.50% to 0.40%, making a total reduction in annual fees of 0.15%.
For investments up to £500,000, this total reduction in annual fees goes up to 0.2%, and for £500,000- £1 million invested brings a reduction of 0.25%.
Investors who pay in £1 million- £2 million will receive a 0.35% reduction and more than £2 million a 0.6% reduction.
These fees are charged by bands, rather than for the overall portfolio, so for the first £250,000 invested you will pay 0.6%, and then anything paid in after that will sees fees reduced as each level is breached.