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Mr Miller, who recently co-founded low-cost wealth management firm Spencer-Churchill Miller Private, described total expense ratios (TERs) as "total nonsense" on the grounds they did not incorporate certain investment costs such as dealing charges.

Due to overinflated trading levies, Mr Miller said, total annual costs well exceeded the typical 1.5 per cent annual management charge (AMC) and amounted to "more like 3 per cent".

As a result, he said, asset and wealth management customers, particularly private clients, were getting "a very raw deal".

He said: "To get genuine best-execution dealing, we're putting up capital to deal at 0-0.5 per cent. Most private clients deal at 1 per cent. Isn't it better to charge what you need to charge for, rather than what you can get away with?"

Other practices Mr Miller said should be abolished included charging fixed costs, such as research, as part of a percentage charge on assets under management.

But Mona Patel, head of communications at the IMA, said dealing costs were an inevitable consequence of investing and were charged to the fund, rather than to its end client. Research costs came out of dealing commission, rather than TERs, she added.

She also said the typical AMC from which Mr Miller calculated his total charge was 30 basis points higher than the average AMC on a fund and 34bps higher than the average AMC paid by an investor.

On the wealth management side, David Bennett, chief executive of the Association of Private Client Investment Managers and Stockbrokers, said there was little evidence private clients were switching as a result of getting a poor deal.

"Investors will decide whether, as a sector, our charges are appropriate," he said. "To date, the private client investment industry has been relatively buoyant during one of the most challenging economic environments in living history."

Despite these ripostes, Mr Miller revealed he had donated a proportion of his wealth, which included earnings at previous management firms, to charity, although he maintained his views on fund management and his donations were unconnected.