By separating all the elements that go into fees and banning commissions, the new rules "will put the power back into the hands of customers," said Shaw, a financial specialist at Which?, a London-based consumer organization.

Greater transparency will trigger more price competition and heightened interest in funds that seek to duplicate the returns of benchmarks such as the FTSE All-Share Index, he said. The average annual fee on U.K. active equity mutual funds -- whose managers try to outperform indexes by selecting which stocks to buy and sell -- is 1.68 percent of assets, versus 61 basis points for equity index funds, according to data from Chicago-based Morningstar Inc. A basis point equals one hundredth of a percentage point.

'Pretty Confident'

"We are pretty confident our business model will play here," Thomas Rampulla, head of Vanguard's European operations, said in a telephone interview from London.

Vanguard became the largest U.S. mutual-fund company on the strength of its index funds and exchange-traded funds. Since the mid-1970s, Vanguard founder Jack Bogle, 83, has been telling investors that most active managers can't beat the market consistently and that low-cost funds that mimic benchmarks instead of trying to beat them will outperform in the long run.

Vanguard funds in the U.S., including those that are actively run, charge an average fee of 16 basis points, compared with 79 basis points for the industry, data from Denver-based Lipper show.

U.S. Experience

Because Vanguard had so much room to grow at home as indexing took hold, the company was slow to move overseas, Chief Executive Officer F. William McNabb said in an April interview at the firm's Valley Forge, Pennsylvania headquarters. The international business will "be an important pillar" in the coming decade, said McNabb.

At New York-based BlackRock, 40 percent of assets were outside the Americas as of Dec. 31, according to data compiled by Bloomberg. At San Mateo, California-based Franklin Resources Inc., non-U.S. assets were 34 percent as of Sept. 30, company data show.

Britain's rule change may create an opening for Vanguard, said Rampulla, who sold products to U.S. financial advisors before moving to London four years ago.