BlackRock Inc, the world's biggest asset manager, said on Wednesday it would cut prices across its growing U.S. iShares Core exchange-traded funds to help wealth advisors transition to a new rule governing retirement products.

The rule, announced by the U.S. Department of Labor in April and effective next year, sets a so-called fiduciary standard for financial brokers who sell retirement products, requiring them to put clients' best interests ahead of their own bottom line. The language in the new rule is tougher than an existing rule that only requires brokers to ensure products are "suitable."

BlackRock said it would lower the expense management ratio for 15 U.S. iShares Core ETFs within its iShares business by 2 to 5 basis points.

The management fee for its flagship iShares Core S&P 500 ETF will fall to 4 basis points from the current 7 bps.

"Now, with the Department of Labor fiduciary rule coming into force, financial advisors are sharpening their focus on the quality and cost-efficiency of funds," BlackRock said in a statement.

Fidelity Investments, which had dominated the U.S. mutual fund industry until the dot-com bubble burst in the early 2000s, had lowered expenses on 27 index mutual funds and ETFs in June.

As part of its announced fee reductions, BlackRock has run a print advertisement boasting that the iShares Core ETFs are now cheaper than comparable ETFs from Vanguard.

This is just the latest salvo in the ongoing price war—othewise known as the race to the bottom—between ETF providers who’ve been nudging down their fees in recent years in an attempt to grab market share. 
 
How low can they go? 
 
The answer: Probably even lower, particularly for passive funds that track the most commonly followed indexes. 
 
But while everyone loves a bargain, there’s more to ETF buying than simply gravitating toward the cheapest-priced option. In a research note pertaining to BlackRock's announcment, Todd Rosenbluth, director of ETF and mutual fund research at CFRA, said that while he expects more fee reductions from other fund providers, investors and advisors should “look beyond one data point in making decisions.”

This article was provided by Reuters. Jeff Schlegel contributed to this article.