The Financial Conduct Authority (FCA) has today published new guidance to help asset managers better communicate how they invest consumers money.
The rules will require fund managers to outline why they use particular benchmarks, and if they don't, explain to investors how they should assess their performance.
Managers that use benchmarks will have to reference them constantly across documents under the guidance, which also sets out how to describe objectives and policies to investors.
This comes after the FCA found weak price competition in the UK's asset management industry, leading to lower returns for savers, pensioners and other investors.
Executive director of strategy and competition, Christopher Woolard, said the regulator was working to protect those least able to actively engage with their investments.
"Today's remedies build on those we've already introduced and will make it easier for investors to choose the best fund for them and help them achieve their investment objectives."
UK asset managers oversee more than £1trn for individual investors, and approximately £3trn on behalf of pension funds and other institutional investors
The new guidance requires those that present a fund's past performance to do so against all its benchmarks, using them as a constrain on portfolio construction or as a performance target.
They will also need to ensure that, where a performance fee is specified in the prospectus, it must be calculated based on the scheme's performance after the deduction of all other fees.
This comes after reforms were confirmed at the end of last year by the Competition and Markets Authority (CMA) to boost competition in the UK's £1.6trn pension market.
Trustees will have to run a competitive tender with at least three firms before choosing a fiduciary manager under the new rules, and provide clients with clear fee information.
John Wotton, chair of a CMA investigation into the market, said the reforms would help ensure pension scheme trustees are getting value for money for members.
"Some lack the information they need to compare providers and so could be sticking with their existing fiduciary manager when there are better options available," he said.
"It's therefore imperative we make these changes so that the sector works better for those it is meant to support - pension scheme members."