Richard James, chief executive of NZ Funds, said his firm anticipated that the revenue it generated for each dollar it managed would have to come down over time.

He said the costs of investing were too high. “Across the spectrum, they are going to need to come down over time, driven by the historically low risk-free rate and lower future return expectations.”

Increasing global competition and technology disintermediation would also play a part, he said.  “What fund managers can charge in fees isn’t really the issue – if people want to they can charge fees in lots of different ways. What level of fees can managers justify in terms of their value contribution, that’s the question.”

Christopher Douglas, director of manager research ratings, Asia-Pacific, for Morningstar, said a challenge for New Zealand fund managers was the size of the market.

That made it hard to compete on price with international players, because of the fixed costs, he said.

"Hopefully more competition with new players and improved technology will change this It’s not something advisers disclose and varies tremendously.

"From what we have seen, all fees are under pressure, globally, whether it be investments, advice, or administrative/platform fees. Regulators are closely scrutinising costs and putting a spotlight on them, which leads to greater transparency and as a result clients and advisers seeking out a fair deal. That being said, one thing we have learnt is that most are reluctant to reduce their costs, and it can only come about when there is broad competition and a disruptive influence."

James agreed New Zealand was a smaller market, with the same regulatory burden and client expectations as bigger jurisdictions.

"But that dynamic exists in lots of industries. The fixed cost of operating in New Zealand relative to the size of the local market is high. That's a factor but not an excuse."