Like a pair of airlines competing furiously to fill seats, fund titans Vanguard Group and Fidelity have essentially slashed fees on their popular index funds recently. This high-profile price war only underlines a broader trend: After years of rising along with assets, mutual fund fees across the industry have come under pressure.

Last August, Fidelity fired the first shot, temporarily cutting fees on five of its index funds to 0.10% of assets—well below the level most Vanguard investors pay for similar funds. An executive for the low-cost fund specialist dismissed Fidelity's move as a marketing ploy; Fidelity fired back by making the cuts permanent in March.

On April 21, Vanguard returned the volley, announcing it would open its super-low-cost Admiral shares, which carry fees as low as 0.9%, to many more investors by lowering the account minimums from $250,000—or $150,000 in a Vanguard account for at least three years to $100,000 starting in May. 

For investors in Vanguard's signature S&P 500 index fund, Admiral status means a drop in fees from 0.18% to 0.9%. Industry-wide, the average S&P index fund charges 1.43%, according to Lipper.

Planners should expect fund fees to continue retreating, says Geoffrey Bobroff, mutual fund consultant and president of East Greenwich, R.I.-based Bobroff Consulting. "We've seen the tilt in the fee trendline change, and probably for good. In the 1990s, during the bull market, the line tilted upward. But with increased scrutiny from the SEC and [New York Attorney General Elliot] Spitzer, as well as new disclosure requirements, that line is now tilting downward."

The industry has taken regulatory heat for not passing on economies of scale to investors. Total mutual fund assets grew from $1 trillion to $8 trillion between 1990 and today. Yet the total expense ratio actually rose during that period, from 0.94% to 0.96%, according to Morningstar.

The question for financial planners: How will this trend reverberate across fund distribution channels?

According to Bobroff, financial advisers shouldn't feel the pinch. "Lower fund fees will make the fees advisers charge on top less painful and easier to take for clients," he says.

Nor does he foresee a fee fire sale inspiring clients to migrate en masse to choosing their own no-load funds. "First of all, people still aren't focused on fees, despite the bear market and the best efforts of the media and the regulators," he says.  Secondly, the steep downturn that followed the 1990s bull market only heightened investors' urge to seek advice—including advice on which mutual funds to choose.