Virgin Money is set to cut the fee on its controversially priced £2.7bn FTSE All-Share Tracker fund which has been heavily criticised by buyers for some time, reports suggest.
Telegraph Money reports that the fund's 1% fee will be reduced to 0.6% from Friday 25 January.
Though the fee is still high compared to many FTSE trackers out in the market, it does include the cost of the ISA wrapper, which means investors save money on any additional brokerage fees.
The lang cat's Mark Polson said although investors should not have to pay more than 0.5%, including brokerage fees, for a UK tracker fund, the reduction in cost was still a "great move".
In comparison, the cheapest UK tracker fund on the market, the iShares UK Equity Index fund, has a management fee of just 0.06%.
A key reason for the change of pricing is considered to be the fact that the management of Virgin Money's funds is being taken over by Aberdeen Asset Management, which has entered into a joint venture with Virgin Money's new owner, CYBG.
Polson told Telegraph Money: "Aberdeen Standard has a reputation to maintain and the potential for running what is a very simple product at a full 1% probably sits uncomfortably with that business."
The paper also reports that the fees on the Money and Bond Gilt, Pension Growth and Pension Bond and Gilt funds run by the firm will see the same reduction, though the charges on the Climate Change and Multi-Asset funds will remain at 1.3% and 1%, respectively.
A spokesperson at Virgin Money said: "We review pricing on a regular basis, and if there are any changes we will communicate those to customers at the appropriate time."
The move now leaves the Halifax UK FTSE All Share Index Tracker as one of the last remaining UK tracker funds charging a 1% fee.
European Fund and Asset Management Association
Will join IA sectors Q1 2020
Inflows of $99.1bn in Q1
TER of 0.40%