NASDAQ – Hedge funds’ traditional "2 and 20" fee structure is being eroded by demanding investors who want a better deal.

According to a survey by research firm Preqin released Wednesday, the average hedge fund collects 1.63% for management fees and 17.21% on any performance gains. The industry has long been know for the 2% management fees and 20% performance fees it charges.

"Fees which for years have conformed to the industry standard of "2 and 20" are now being driven down as investors become more powerful in the manager/ client relationship," Preqin said in the report.

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