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It’s two months since Neil Woodford shut his flagship investment fund – and fury is growing

Tomorrow marks eight long weeks since investment manager Neil Woodford was abruptly forced to suspend dealings in his £3.4billion flagship fund Equity Income, triggering concerns among thousands of investors for the future of their nest eggs.

At the same time, the fund’s suspension will be extended for at least another 28 days. 

This will compound fears that investors’ money will be trapped until the end of the year at the earliest as Woodford desperately attempts to reduce the portfolio’s emphasis on illiquid, unquoted stocks – holdings that meant he was unable to free up sufficient cash when big investors came asking for their money back in late May.

For the high jump? Keen horserider, Neil Woodford, is still charging £65,000 a day in fees

The fund’s performance plunged and concerns rose over the quality of the stocks underpinning Equity Income – forcing its suspension.

Some experts now believe the fund might not reopen and will at some stage be dismantled and dismembered, leaving investors with acute financial losses.

Despite this alarming state of affairs, Woodford and his Oxford-based business Woodford Investment Management continue to make money from the busted fund – at a daily rate of £65,000. 

That’s £3,640,000 in management fees since the fund closed its doors.

Some describe this as reward for failure and are outraged that the fees are depleting further the value of investors’ holdings in the fund. 

On Friday, Woodford’s external public relations adviser told Wealth that management charges would continue to be taken from the fund. Mr Woodford is not for turning. Stubborn as a mule.

Blueprint for fairer funds, platforms – and a better industry 


– Bar any fund from using income in its title if it does not provide an income higher than that produced by the stock market in which it is investing.

– Reduce annual management charges, especially on multi-billion pound funds, to give investors a bigger slice of gains.

– Make 0.5 per cent a year the norm for charges, not the exception. Investment trusts do it. So should funds.

– Introduce tiered charges across the fund management industry, so the overall percentage charge falls the bigger a fund gets.

– All funds and trusts should publish an overall charge figure that can be directly compared across groups. They must be allowed no wriggle room for manipulation of figures.

– The regulator should clamp down further on the unquoted holdings of mainstream investment funds. Ideally, these should only be held by stock market-listed investment trusts.

– All funds should publish full details of their holdings so that investors can see what companies they are investing in.


– Ban all exit fees.

– Give investors detailed notes on why a fund is deemed a best buy – not just glib marketing words.

– Tell investors if a platform is receiving any payment for including a fund on its best-buy list.

– Include investment trusts in best-buy lists – Hargreaves Lansdown does not.

– Disclose the holdings that any platform director has in funds the platform puts in a best-buy list – and disclose any personal buying or selling.

Neil Woodford

– Waive the fee on Equity Income, backdating it to when fund dealings were suspended.

Hargreaves Lansdown

– Waive exit fees for anyone wishing to move their money to another platform as a result of the Woodford debacle.

Woodford has also so far managed to escape any form of regulatory censure. He has also not had to explain in person the fund’s closure to either investors or the all-powerful Treasury Select Committee that often holds City miscreants to account and makes them squirm when put under scrutiny.

Apart from meeting with selected sycophantic financial advisers who peddled his funds – and continue to believe he can walk on water – Woodford has so far remained locked away in his Oxford bunker, hoping that the furore surrounding his ailing fund will quieten down. 

Well, Mr Woodford, Wealth has news for you. The anger of investors has not died down. Far from it. The longer the fund remains suspended, the more agitated they are becoming. 

Scores of investors continue to contact Wealth every day, urging us to continue our campaign to get you (yes, you Mr Woodford) to waive the fees on Equity Income. 

In a nutshell, Mr Woodford, you have nowhere to run. 

They have also welcomed our wider campaign for reform of the investment funds industry that urges all investment managers and fund brokers such as Hargreaves Lansdown to give investors a fairer deal.

Controversy: Investors in Neil Woodford's flagship fund are still angry

Controversy: Investors in Neil Woodford’s flagship fund are still angry

Wealth believes fund charges need to come down and funds should be better labelled (at the time of its suspension, Woodford Equity Income was not an income-orientated vehicle).

We also believe the likes of Hargreaves – that recommended Equity Income as a best-buy right up until its suspension – should be required to justify all their recommendations. Such fund platforms should also remove all exit charges, enabling investors to switch provider without fuss or financial penalty.

Jeff Barrett, a 71-year-old retired police officer from Bournemouth who also spent some of his working life as a financial adviser, has an investment of £10,000 trapped in Woodford Equity Income. He says Woodford’s decision to continue levying fees cannot be justified.

‘Woodford was the Pep Guardiola of investment management,’ he says. ‘I bought Equity Income when it launched in 2014 on the back of the money Woodford had made for me when he was successful running funds in his previous job at Invesco Perpetual.

‘But the investment has proved a big disappointment and he now has no right to continue to denude it as he attempts to clear up the mess he has created.’

He adds: ‘Woodford thinks he is the swaggering John Wayne of the investment world, but he’s lost his lustre and it’s time for someone – the regulator maybe – to pull him off his horse.’

John’s wife, Myra, also had a £10,000 investment in the fund but sold it two months ago as concerns over the quality of Woodford’s portfolio bubbled to the surface. ‘I had a sixth sense that something wasn’t quite right,’ she says.

Some experts believe the fund may not reopen & will at some stage be dismant dismembered

Some experts believe the fund might not reopen and will at some stage be dismantled 

‘Of course, I’m glad to be out but I do feel terribly sorry for those people who have money trapped in the fund and are desperate to get at it.’ 

Caroline Drummer, a 50-year-old lawyer from Edinburgh, is kicking herself for not getting her £20,000 investment out of the fund before it closed.

She believes ‘absolutely’ that the fees on Equity Income should be waived.

She says: ‘The rules may support Woodford’s decision to continue charging fees but he’s put himself in a dangerous place by being so bloody minded. He’s lost the moral argument and I’m not sure he now has much of a future in investment management.’

Caroline, who has worked extensively in the wealth management industry, also questions whether the fund’s trustees, Northern Trust, did enough to safeguard investors’ interests as Woodford moved Equity Income into more illiquid or rarely traded stocks.

Mike Rhodes, who worked in local government before retiring, redeemed his £10,000 stake in Equity Income last year, getting out without losing any money. But he is still annoyed that Woodford is charging fees.

Mike, who now does voluntary work for a hospice in Exeter near to where he lives, says: ‘It wouldn’t hurt Woodford to turn the fees tap off. After all, it’s not as if such a move would force him to use his local food bank.’

In the last financial accounts for Woodford Investment Management, Woodford received a large slice of a dividend payment worth more than £36 million.

Chris Hall, a 71-year-old retired electrical engineer from Pinner in Middlesex, feels the same. Although he does not hold Equity Income directly, he has money invested in funds managed by Hargreaves Lansdown that do.

He says: ‘Woodford should not be charging investors management fees for digging himself out of a hole he is responsible for creating. The whole system seems to be weighted in favour of fund managers like Woodford, not the investors who pay their wages.’

It is not just investors who believe Woodford should do the decent thing and waive fees on Equity Income. Peter Sleep is a senior investment manager with Seven Investment Management and has had doubts about the fund – especially its illiquid holdings – for the past two years.

He believes there is ‘little chance’ of Equity Income reopening and says Woodford should not be levying ‘full fat fees’ – especially given a slice of the fund (nearly 19 per cent, he estimates) is now sitting in cash.

He adds: ‘I can put cash on deposit for free as a saver. It seems unreasonable to charge a fee for doing so on behalf of trapped investors.’

Should Woodford be allowed to charge a management fee on his Equity Income Fund? Email 

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