Investors could be shelling out up to 20 times more than the cheapest option on tracker funds, analysis from AJ Bell has found.
An investor with a £100,000 portfolio could get a £9,000 boost over 10 years from switching to the lowest cost trackers, the firm said.
AJ Bell's head of investment analysis, Laith Khalaf, said the difference between returns from comparable tracker funds are largely dictated by fees.
Tracker funds are passive investments which track the performance of a particular index by holding all the companies in it.
He said it is worth investors moving to a new provider if they find their fees are too high.
The analysis found that an investor in the most expensive UK stock market tracker would pay £106 in management fees every year, but they could cut this to as little as £5 in the cheapest tracker fund.
Khalaf added: “It might come as a surprise, but not all tracker funds are created equal.
"There can be a big gulf in charges, and over time this can produce a seriously large dent in your nest egg if you happen to be invested in a higher cost tracker.
“At the moment, platform providers can identify customers who hold higher cost tracker funds, but can’t contact them to point this out as this could constitute personal financial advice.
"The regulator is currently reviewing the dividing line between advice and guidance, and this is an example of how relaxing the rules could help investors to make better, more informed decisions.”
tara.o'connor@ft.com
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