It’s quite shameful that the fund management industry has been largely mute on the destruction to investors’ wealth caused by one of its former stars, Neil Woodford.
Apart from a couple of notable exceptions – fund manager Alan Miller at SCM Direct and straight-talking Brian Dennehy at FundExpert – their silence is damning.
It suggests a club scared to criticise its own members for fear of the spotlight being shone too brightly on an industry that sometimes struggles to justify the generous fees it charges investors. To its great discredit, the Investment Association – the industry’s trade body – has been silent in its condemnation of Woodford. Shameful.
Making a comeback: Neil Woodford is seeking to return to fund management
So it was refreshing to hear Helena Morrissey, former chief executive of Newton Investment Management, break ranks and speak out passionately against Woodford last week as he sought to return to fund management – less than two years after the suspension of investment fund Woodford Equity Income and the beginning of the end of his investment empire.
Doubly refreshing given Baroness Morrissey is a non-executive director of St. James’s Place Wealth Management, a company that entrusted Woodford to run £3.5billion of assets on its behalf up until just after Equity Income’s doors were shut in June 2019.
‘I just cannot understand or contemplate him coming back,’ she said in the wake of Woodford’s announcement of his new investment business called WCM Partners. ‘Hundreds of thousands of investors lost billions,’ she added, referring to the losses Equity Income investors have suffered as a result of the fund’s break-up.
‘It’s soul destroying. It gives the industry a bad image.’ Most cut ting of all: ‘I find the whole thing extraordinary. I am religious and I believe in redemption, but he should not be returning to the same thing he just did.’
I trust Morrissey’s words have been picked up on the radar of the Financial Conduct Authority as it continues to dilly-dally over what to do with Woodford.
Maybe she should be drafted in to advise on its investigation into the events leading up to the demise of Equity Income that is moving at a hedgehog-like pace. At the very least, Morrissey would breathe life into a probe that has gone nowhere in 20 months – and seems an age away from completion.
Financial fraud is now part and parcel of our everyday lives. At every turn, it seems scammers are attempting to rob us of our cash – whether over the phone, by text or online.
I report on how fraudsters deceived Jean Timmins into investing £30,300 by cloning the details of an authorised company and convincing her that she was dealing with a legitimate firm.
In recent weeks, we’ve also reported on how criminals persuaded a former City lawyer to move £241,000 out of her bank account and that of her elderly mother’s because of suspected fraudulent activity – as well as a gentleman who used dating app Tinder to convince an online acquaintance to invest in bitcoin via a cloned website. In both of these instances, the victims have not received their money back.
Although the Payment Systems Regulator is now considering ways to beef up the protection available to victims of certain types of financial fraud, the banks surely need to be doing more than they currently are. Jean Timmins’ case supports this argument.
Santander originally rejected her request for a refund on the grounds that she had not taken sufficient care to ensure she was not being scammed. Yet, what care did it take? It queried the two payments she made to the fraudsters, but that appears to be all it did.
Why didn’t it run any checks? Why didn’t it speak to the regulator to see if the company she was dealing with was legitimate? Surely it should be doing far more to prevent its customers from being victims of fraud.
Also, it is deeply troubling that Santander overturned its original decision to refuse Jean a refund only when this newspaper got involved. This suggests that the bank is far too quick to attach blame to customers.
The battle against financial fraud requires banks, customers and the regulator ALL to play their part in fighting the common enemy.
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