Woodford dropped by St James’s Place as manager of £3.5bn of its funds
Neil Woodford has been dropped by St James’s Place as manager of £3.5bn of its funds.
The wealth manager said today it had terminated its mandates with Woodford Investment Management, appointing Columbia Threadneedle and RWC Partners in its place.
A spokesperson for St James’s Place said the firm had “been keeping a close eye on the situation” and that the firm had “spoken to Neil today” to communicate its decision.
Trading in the former star stock picker’s flagship Woodford Equity Income Fund was suspended on Monday following a spike in withdrawals.
Today, the Financial Conduct Authority (FCA) said it was not responsible for the suspension of the fund.
It said the firms responsible for the decision are its authorised corporate director – Link Fund Solutions – and its depositary – Northern Trust Global Services.
“The FCA is notified of decisions to suspend funds; it does not approve them,” it said.
The FCA also responded to the fund’s decision to list some of its assets on the stock exchange in Guernsey.
It said it had been “in discussions” with Link Funds and Guernsey exchange The International Stock Exchange (Tise) “regarding the circumstances around the listing of certain of the fund’s assets on that exchange”.
It said it was not involved in the listing decisions of Tise, which is regulated by the Guernsey Financial Services Commission.
“Where the FCA believes there are circumstances suggesting serious misconduct or non-compliance with the rules it may open an investigation,” it added.
Woodford’s fall from grace has also hit stockbroker Hargreaves Lansdown which had heavily promoted Woodford’s fund to its clients.
Today it said it had decided to waive its platform fee for the fund while dealing is suspended.
Emma Wall, head of investment analysis at Hargreaves Lansdown, said: “We have taken the decision to waive the platform fee on the Woodford Equity Income fund while dealing is suspended, effective immediately. We do not think it is fair to charge our clients a fee while they cannot trade in the fund.
“This is a frustrating and difficult time for clients and we are doing what we can to support them. We have been in communication with Woodford Investment Management to explain why we think this is the right thing to do and have put pressure on them to do the same.”
Hargreaves Lansdown’s share price fell 6.8 per cent today to 1,981p.
On Tuesday night Woodford apologised to investors in a Youtube video.
He said he would use the time that the fund was suspended to reduce its exposure to illiquid and unquoted stocks.
“As difficult a decision as this is, and clearly frustrating for you, our investors, we felt that this was necessary to protect your interests,” he said.