Woodford Equity Income Fund is facing calls to waive its management fees after customers were stopped from withdrawing their investments.
Earlier this month, well-known stockpicker Neil Woodford suspended his main investment fund after a growing number of investors looked to withdraw their funds. The move was designed to protect other investors’ interests, he said.
In addition to backlash from customers who want their money back, Woodford is facing criticism for still collecting management fees while the fund is suspended. MP Nicky Morgan called him out for taking “a huge amount of money” – reported to be in the region of £100,000 per day.
Now, the head of the Financial Conduct Authority, Andrew Bailey said Mr Woodford “should consider his position” on the management fees.
Speaking to the BBC, Mr Bailey said “we need him to manage these assets now more than ever”.
“His job now is to get this fund back into a position where there can be orderly trading, so he has his work cut out now,” Mr Bailey added.
Mr Woodford is yet to provide an indication on how long the suspension will remain in place, but the FCA boss said investors would be able to get their money back “when the fund is put back into a condition when it can operate in an orderly fashion without disorderly sales”.
Although he was calling for management fees to be waived while the suspension is in place, Mr Bailey does support the decision to implement the suspension in the first place.
He said: “The worst thing, in my view, for investors would be if there had to be a disorderly fire sale of assets, which of course would destroy value for them, so in our view, suspension is what we regard as a sensible safety valve.”