The Financial Conduct Authority (FCA) has called for British asset managers to introduce radical changes in the industry, to control costs and boost returns for savers.

The regulator also stressed the need for increased competition and higher transparency in the sector, describing them as pivotal factors for a sector relied upon by millions of people. Investors, the FCA said, should be provided with simpler and clearer information on the costs involved, to ensure they can make the best possible decision to satisfy their interests.

Asset management firms have been urged to charge a single "all-in fee" and to keep costs and charges consistent in order to improve competition.

The recommendations come as the City watchdog published the findings of its study into the industry, which is worth approximately £7trn ($9trn) to the British economy.

"The asset management sector is important to the economy, managing the savings of millions of people and in the current low interest environment it's vital we help people earn a return on their savings," said the FCA chief executive, Andrew Bailey.

"We have put together a comprehensive package of reforms that will make competition work better and help both retail and institutional investors to make their money work well for them."

The FCA, which added the sweeping changes will be implemented in stages, has also recommended two independent directors should be appointed to the boards of fund managing firms.

Will Goodhart, chief executive of the Chartered Financial Analyst Society of the UK, welcomed the findings.

"The report gives the UK investment profession a great opportunity to improve the way it works with customers and to move the debate on from costs and charges to focus on the vital role that the sector plays in the economy," he said.

"This is a sensible and positive outcome to an important exercise. We welcome the final report as it will help to protect consumers' interests, drive competition and addresses some of the issues that the sector faces at their root."