Woodford fund, bizarre BBC article

MK62

While concerns/flags were certainly raised over this fund prior to suspension, it was only after the suspension that the full story came out though.......

This might be a good read for anyone interested in this subject......
https://www.evidenceinvestor.com/post/link-s-role-in-woodford-fiasco-laid-bare-in-new-book

as is

https://www.ftadviser.com/investments/2024/04/24/catalogue-of-link-s-failings-in-woodford-fund-laid-bare-by-fca/

dunstonh

MK62 said:

While concerns/flags were certainly raised over this fund prior to suspension, it was only after the suspension that the full story came out though.......

This might be a good read for anyone interested in this subject......
https://www.evidenceinvestor.com/post/link-s-role-in-woodford-fiasco-laid-bare-in-new-book

as is

https://www.ftadviser.com/investments/2024/04/24/catalogue-of-link-s-failings-in-woodford-fund-laid-bare-by-fca/

And just for reference (as I mentioned it earlier), the Governance report that said to "sell" Woodford equity income  because of ".....a long tail of illiquid unlisted companies." was dated September 2017. 

MK62

As it's for reference, do you have a link?

dunstonh

MK62 said:

As it's for reference, do you have a link?

The monthly Governance reports are a service provided commercially to IFAs.   You would need an FCA number and around £3800 to get access to it.

Middle_of_the_Road

dunstonh said:

MK62 said:

As it's for reference, do you have a link?

The monthly Governance reports are a service provided commercially to IFAs.   You would need an FCA number and around £3800 to get access to it.

Is this an annual cost, or a one time payment? Either way, I would imagine it's part and parcel of the costs involved in providing this service.

MK62

Hmmm, so why would you expect a DIY investor to be aware of it's content?

As I've stated though, I accept that there were concerns and flags raised over WEIF before it's suspension, but it appears even the FCA were unaware of the full story then....so hardly surprising that many DIY investors were equally unaware of that full story either.
I wouldn't expect DIY investors to be compensated for investment losses incurred when funds are run, managed and overseen properly........but in cases where that appears not to be the case, I would expect there to be some form of consumer protection/ redress, even if it doesn't fully compensate for any losses incurred. If not, we are back to the wild west for financial services.

masonic

MK62 said:

Hmmm, so why would you expect a DIY investor to be aware of it's content?

As I've stated though, I accept that there were concerns and flags raised over WEIF before it's suspension, but it appears even the FCA were unaware of the full story then....so hardly surprising that many DIY investors were equally unaware of that full story either.
I wouldn't expect DIY investors to be compensated for investment losses incurred when funds are run, managed and overseen properly........but in cases where that appears not to be the case, I would expect there to be some form of consumer protection/ redress, even if it doesn't fully compensate for any losses incurred. If not, we are back to the wild west for financial services.

In fairness, I don't think there was any suggestion that this report was available to DIY investors.

ISTR that Woodford boasted about the fact that unlike most funds, his provided a full list of its holdings. Anyone could have gone through that and added up the listed vs unlisted (or shadow listed) stuff. I suspect very few did. However, OEICs are allowed to invest up to 10% of the fund in unlisted securities, and it appears from the material shared earlier, this limit was breached due to a combination of outflows and poor performance. The breach may have been covered by "listing" things in Guernsey, but had that not happened, its hard to see this mess ending any better. Perhaps 10% in unquoted companies should not have been allowed in the first place. If you load up on things that are illiquid and must be limited as a percentage of AUM, and AUM falls sharply, what happens to that percentage?

dunstonh

Middle_of_the_Road said:

dunstonh said:

MK62 said:

As it's for reference, do you have a link?

The monthly Governance reports are a service provided commercially to IFAs.   You would need an FCA number and around £3800 to get access to it.

Is this an annual cost, or a one time payment? Either way, I would imagine it's part and parcel of the costs involved in providing this service.

Its a single user annual licence.   It actually a bit more than that as its a bolt on service for other things.

Hmmm, so why would you expect a DIY investor to be aware of it's content?

I never said they would.  I was referencing it, and you need to note that it took its information from published data from the fund house.   Anyone was free to read that data and make their own mind up. 

As I've stated though, I accept that there were concerns and flags raised over WEIF before it's suspension, but it appears even the FCA were unaware of the full story then....so hardly surprising that many DIY investors were equally unaware of that full story either.

The regulator has pretty much always been behind the curve.   They knew about PPI decades before deciding to intervene.  They knew about unregulated investments but took another decade to intervene.  They knew about mini bonds but didn't want to intervene.

coyrls

dunstonh said:

Middle_of_the_Road said:

dunstonh said:

MK62 said:

As it's for reference, do you have a link?

The monthly Governance reports are a service provided commercially to IFAs.   You would need an FCA number and around £3800 to get access to it.

Is this an annual cost, or a one time payment? Either way, I would imagine it's part and parcel of the costs involved in providing this service.

Its a single user annual licence.   It actually a bit more than that as its a bolt on service for other things.

Hmmm, so why would you expect a DIY investor to be aware of it's content?

I never said they would.  I was referencing it, and you need to note that it took its information from published data from the fund house.   Anyone was free to read that data and make their own mind up. 

As I've stated though, I accept that there were concerns and flags raised over WEIF before it's suspension, but it appears even the FCA were unaware of the full story then....so hardly surprising that many DIY investors were equally unaware of that full story either.

The regulator has pretty much always been behind the curve.   They knew about PPI decades before deciding to intervene.  They knew about unregulated investments but took another decade to intervene.  They knew about mini bonds but didn't want to intervene.

I think this discussion would be more convincing if investors whos IFAs didn't move them out of the Woodford fund were fully compensated because of inappropriate advice but I don't believe that was the case.  It seems perfectly possible to not DIY and to still have lost money through investing in the Woodford fund.

InvesterJones

coyrls said:

dunstonh said:

Middle_of_the_Road said:

dunstonh said:

MK62 said:

As it's for reference, do you have a link?

The monthly Governance reports are a service provided commercially to IFAs.   You would need an FCA number and around £3800 to get access to it.

Is this an annual cost, or a one time payment? Either way, I would imagine it's part and parcel of the costs involved in providing this service.

Its a single user annual licence.   It actually a bit more than that as its a bolt on service for other things.

Hmmm, so why would you expect a DIY investor to be aware of it's content?

I never said they would.  I was referencing it, and you need to note that it took its information from published data from the fund house.   Anyone was free to read that data and make their own mind up. 

As I've stated though, I accept that there were concerns and flags raised over WEIF before it's suspension, but it appears even the FCA were unaware of the full story then....so hardly surprising that many DIY investors were equally unaware of that full story either.

The regulator has pretty much always been behind the curve.   They knew about PPI decades before deciding to intervene.  They knew about unregulated investments but took another decade to intervene.  They knew about mini bonds but didn't want to intervene.

I think this discussion would be more convincing if investors whos IFAs didn't move them out of the Woodford fund were fully compensated because of inappropriate advice but I don't believe that was the case.  It seems perfectly possible to not DIY and to still have lost money through investing in the Woodford fund.

We don't know if it has been the case or not - it'd be between the IFA and the client on a case-by-case basis, rather than a central ruling.