Neil Woodford Closed Fund

yipikaye

*Posted this on the Investment section / reposting here as fits voth categories*

With the Neil Woodford Income Fund being closed and investors recieving back a fraction of their money invested.

Is there any avenues open to investors to get back some, or all of their losses back?

There is 10,000's of investors affected by this.

Is there any recourse through the financial ombudsman or FSCS, or possible legal action.

In the aftermath of the scandal various news paper reports have cited law companies taken on cases for victims, but potentially the cost of legal action would be prohibitive?

Any ideas or thoughts would be most welcomed.

Thanks

Aylesbury_Duck

Isn't this a case of only investing what you can afford to lose? There's no guarantee that funds will continually rise in price. I'm not a financial expert but if the fund wasn't frozen, wouldn't its value have plummeted even more as investors rushed to withdraw their money?

From what I understand, Woodford was a bit of a star, people got a bit greedy and expected those stellar returns to continue forever. They didn't.

yipikaye

Isn't this a case of only investing what you can afford to lose?

That would be gambling!

It's quite unprecedented what happened here with Woodford, the problem was he had invested a lot of money in illiquid assets. Most of which went south.

Undervalued

Aylesbury_Duck wrote: »

Isn't this a case of only investing what you can afford to lose? There's no guarantee that funds will continually rise in price. I'm not a financial expert but if the fund wasn't frozen, wouldn't its value have plummeted even more as investors rushed to withdraw their money?

From what I understand, Woodford was a bit of a star, people got a bit greedy and expected those stellar returns to continue forever. They didn't.

yipikaye wrote: »

Isn't this a case of only investing what you can afford to lose?

That would be gambling!

It's quite unprecedented what happened here with Woodford, the problem was he had invested a lot of money in illiquid assets. Most of which went south.

Both of the above point are valid and I have actually been affected myself, although I had drastically reduced my holding when it was still showing a profit.

It would all come down to whether the fund was operated within the rules and I am certainly not expert enough to know.

Even if it wasn't, potentially giving rise to a valid claim, what assets are there to claim from? No doubt it will have been legally separate from his and his companies other assets?

p00hsticks

if you invested via Hargreaves Lansdowne there's a class action lawsuit https://citywire.co.uk/wealth-manager/news/more-than-500-hargreaves-clients-join-woodford-lawsuit/a1289303

born_again

yipikaye wrote: »

*
Is there any recourse through the financial ombudsman or FSCS,
Thanks

Did you check if it was FCA regulated.

FCA had messed up big style (no surprise there) in the handling of the company.

There is plenty of information out there is relation to this case.

Not sure how legal action is going to help get any more money back than is already being paid out.
In fact it might even reduce a chance of people getting more as they will want their £££.

There is only so much money in the pot to go round.

https://www.theguardian.com/business/2020/jan/28/neil-woodford-investors-loss-payouts

Undervalued

born_again wrote: »

Did you check if it was FCA regulated.

FCA had messed up big style (no surprise there) in the handling of the company.

There is plenty of information out there is relation to this case.

Not sure how legal action is going to help get any more money back than is already being paid out.
In fact it might even reduce a chance of people getting more as they will want their £££.

There is only so much money in the pot to go round.

https://www.theguardian.com/business/2020/jan/28/neil-woodford-investors-loss-payouts

Well it would help IF (big if) platforms such as Hargreaves Lansdown have any legal liability as a result of how they promoted this fund to investors. Such claims would be against them and not against the fund itself.

Frankly I doubt it but it will be interesting to see whether the class action mentioned above gets anywhere.

The_Rainmaker

yipikaye wrote: »

It's quite unprecedented what happened here with Woodford, the problem was he had invested a lot of money in illiquid assets. Most of which went south.

Surely your due diligence prior to buying into the fund would have highlighted this?

That is the danger of illiquid assets they can't be sold very quickly or in large volumes without disrupting the market.

Fortunately for some these distressed sales provided a buying opportunity.

Aylesbury_Duck

yipikaye wrote: »

Isn't this a case of only investing what you can afford to lose?

That would be gambling!

It's quite unprecedented what happened here with Woodford, the problem was he had invested a lot of money in illiquid assets. Most of which went south.

But investing in stocks and shares is gambling, albeit comparatively low risk and in a heavily regulated industry with a good track record.

Show me one fund that guarantees your money is safe from losses.