All existing and new customers invested directly in M&G ISAs and funds will be able to access the cheaper prices by signing up to a new online service, due to launch later this summer.

The lower prices will be available to any direct investor with a combined total of £5,000 invested in M&G funds.

M&G, which is owned by Prudential, has around 190,000 direct investors, of whom around three quarters have portfolios of £5,000 or more.

Traditionally, it has been cheaper for direct investors to buy funds via an intermediary such as an adviser or fund supermarket or platform.

M&G said qualifying customers who sign up to the new service will see ongoing charges for a typical M&G equity fund, such as the M&G Dividend fund, fall from 1.66% to 1.16%. Ongoing charges for a typical fixed income fund, such as the M&G Corporate Bond, run by renowned manager Richard Woolnough, will fall by 0.25% to 0.91%.

That means a direct investor with £2,500 in each of these two funds, who chooses to move to the new online service, will see the total annual charges fall by £18.75, M&G said.

M&G also said it would stop charging all investors for external research from 1 January 2017. This follows a similar move by Woodford Investment Management, announced in April.

Charges for external research are relatively low. An investor with £5,000 in a typical equity fund pays less than £2 a year.

Michael McLintock, chief executive of M&G Investments, said: “The lower fund charges available through our new online service will help our customers’ savings work as hard as possible, whether that’s to provide an income in retirement today, or grow capital for the future.”

The M&G actions suggest the firm is moving in a different direction to some of its competitors, which have scaled back their direct-to consumer propositions in recent months.

In April, Legg Mason announced it was withdrawing its ISA product and transferring £65m of ISA business to Hargreaves Lansdown.

Last year, JP Morgan Asset Management stopped offering direct equities and rival funds and transferred £370m of business to Hargreaves.