The FCA has fired a significant shot across the bows of Neil Woodford’s prospective new fund management business.
CityAm describes it as a stern warning from Mark Steward, FCA Director of Enforcement.
I would argue that the statement rather than some of the press coverage tells us a bit more about the FCA's view so we include it in full at the end of this review.
It has provoked the Treasury select committee to ask the FCA to provide an end date for the Woodford investigation.
Campaigner Gina Miller has demanded that the FCA hand the inquiry over to an independent judge as reported in the Guardian.
In other news, nearly £50bn of investors’ money is stuck in consistently underperforming funds according to BestInvest’s latest 119 ‘dog’ funds report.
The ignominy of coming top of this particular pops falls to Invesco for the sixth time in a row with Jupiter second, SJP and Schroders joint third.
Consultant Malcolm Kerr suggests that the only platform that has succeeded in disrupting anything is Transact. He remains highly cynical about what might be loosely called roboadvice with Scaleable Capital leaving the UK.
Neil Liversidge, principal of Yorkshire-based West Riding Financial Solutions, who raised concerns about London Capital & Finance in 2015 said he has been "brushed off" by the Treasury Select Committee after he wrote expressing concern that the industry should not be left with the bill.
There is an argument to say that whistle blowers inside and concerned professionals outside these companies need to be listened to more.
Liversidge has responded with typical frankness – “We are sick to the back teeth of paying for the failings of the regulator on the one hand and the recklessness of investors on the other”.
And finally that FCA Woodford statement in full below -
"Mr Woodford’s new business, WCM Partners Ltd, would need to apply for appropriate permissions before commencing any regulated activity in the UK. In taking any decision on whether to authorise a firm, we consider whether it is ready, willing and organised to comply, on a continuing basis, with our requirements and standards. That includes, for example, the sustainability of the firm’s business model and the fitness of its management.
"There are reports that Mr Woodford’s future business proposal may operate out of Jersey. We are in contact with the Jersey Financial Services Commission (JFSC) and agreed with them that we will both share information on any application made in our respective jurisdictions (for both a fund or entity).
"We have previously confirmed that we are investigating the events that led to the suspension of the LF Woodford Equity Income Fund (the “Fund”). The investigation is being appropriately resourced and is progressing, though there has been some impact on accessing certain documents and witnesses during the pandemic.
"It is important to note that any comment about the scope of this ongoing investigation is purely speculation; we have not confirmed who or what we are investigating, though it is public knowledge that there were a significant number of entities in the chain of operation of the Fund. That is important for both legal and practical reasons. In complex investigations, for instance, the scope and subjects often change as further evidence comes to light during the investigation."
"I recognise the time taken to investigate causes frustration among those affected by a firm or fund failure and who are, understandably, looking for answers. They rightly look to us to provide those answers. As a result, it is vital we investigate thoroughly and investigations are not limited at their outset. Instead, we look at what all the evidence tells us before we make conclusions about what, if any, misconduct has taken place and who is responsible, if it has. It is only then that we can assess what, if any, sanction we should put in place. It is important as the decision-makers on investigations that we do not prejudge their conclusion."