For those of us with long experience of this industry, we may be dismayed that the scenarios which arose in the Woodford Fund saga have occurred again. From the Peter Young affair through Arch Cru through to the Woodford issues, the same sort of issues have come up, just in slightly different guises.
May be the Woodford problems were exacerbated by use of the host ACD model and failings by Link – as indeed the FCA's Final Notice to Link seems to infer. So should we expect that most fund managers should mostly have addressed most of the issues which identified in the FCA's Final Notice ?
We suggest that all UK authorised fund managers should at least review their compliance with the fundamental points behind the issues, and also have regard to the potential effect of the Woodford case on the UK fund industry's reputation.
We can now review the conclusions of the FCA's work in respect of the Woodford Fund issues now they have published
- their Final Notice to Link Fund Solutions Limited in respect of the Woodford Equity Income Fund ("WEIF"),
- together with a Warning Notice Statement 24/3 issued in respect of each of Woodford Investment Management Limited ("WIM") and Neil Woodford himself setting out FCA proposals to take action in respect of conduct summarised in that statement.
What are the lessons to be learned? And are any of these new?
In this Briefing Paper, we look at Link's failings which have been identified by the FCA, the alleged failings by Woodford Investment Management and Neil Woodford himself, and offer some suggestions on potential solutions and lessons to be learned.
All fund managers should review the FCA's papers to see what other improvements, if any, they can make to mitigate the risks of similar issues arising.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.