Woodford, who launched his own business recently having quit Invesco Perpetual after more than two decades at the group, said fund managers often claim to be actively managing a fund, when in reality they are following the herd.

As such, he said fees on some active funds are too high in a world where investors can instead buy tracker funds for a much lower cost.

In an interview with the BBC’s Today programme, he said: “The industry has overcharged in many aspects. It’s quite clear, in the banking industry and my own industry, that too often, the industry has been charging active fees for index performance or worse.

“Retail clients in particular are waking up to the high charges that we’ve seen in the industry and I think, with some support from the regulator, we’re going to see those charges come down.”

Woodford said many managers are restrained by the increasing focus on short-term gains, meaning they can feel pressure to invest in a fairly rigid way in order to match peers, or else fear for their jobs.

“Fund managers are constrained by the fear that if they were to underperform the index for a three, six or 12-month period, their careers would be in jeopardy,” he said.

Woodford’s new business – Woodford Investment Management – enjoys the benefit of launching into the new “clean fee” world where bundled pricing is no longer an issue.

His CF Woodford Equity Income fund launched with a variety of share classes to cater for various distribution channels, but retail investors can access his fund for 0.75 per cent.

Many investors remain in his former Invesco funds where clients paid up to 1.5 per centannually, with a chunk going to advisers in the form of trail commission.