Industry fund legalsuper has reduced fees to 90 per cent of its total assets under management (AUM) after refining its manager line-up.

The fees now range from 0.01 per cent to 0.04 per cent of AUM, depending on the investment option the member has selected.

The $1.1 billion fund also recently introduced a $1000 cap on administration fees for members with balances over $350,000.

"Legalsuper is pleased to be able to respond to the federal government's stated expectation that super funds reduce their fees to members," legalsuper chief executive Andrew Proebstl said.

This change proves that smaller funds still have the bargaining power to negotiate lower investment fees, according to Proebstl.

"A recent legalsuper examination of fees charged by ten large industry and retail super funds, together managing more than $280 billion, showed that the average investment fee for these funds' default investment option was 0.75 per cent, 0.11 per cent higher than the fee for legalsuper's default investment option of 0.64 per cent," Proebstl said.

Following from this, Proebstl said funds should not make the decision to merge on the basis of fees alone.

He said cost was an influencing factor in the recent merger between legalsuper, the Victorian Bar Superannuation Fund and Blake Dawson Partners' Superannuation Fund, but having access to an expanded range of services also contributed to the decision.

"Legalsuper's strong investment performance and demonstrated success at keeping fees low ... demonstrates there will always be a role in the super industry for boutique funds that better understand the particular needs of their target market," Proebstl said.