He’s no video star – fury at £3.5bn fund boss’s film

Woodford’s latest social media salvo failed to answer your key concern: why is he STILL charging fees on a closed fund?

IT WAS brief, it was to the point and it was positive (we would expect nothing less). But Neil Woodford’s latest – stilted – appearance on social media to explain the continued suspension of his flagship Equity Income investment fund did little to assuage the anger of many investors trapped in it.

Frustratingly, there was not a dicky bird on the issue that is most vexing investors – and many avid readers of these pages. Namely, his refusal to waive the annual management charge on the £3.5 billion fund while it remains closed, a decision that means Woodford continues to benefit from investors’ pain to the tune of at least £65,000 a day – an updated figure provided by Woodford last week in response to the previously quoted £100,000 a day.

This still means £2,275,000 of fees have been sucked out of the Equity Income fund since its suspension. Fees that trapped investors are paying while Woodford continues to live the high life in his Cotswold mansion that he bought six years ago for £14million – while spending weekends at his six-bedroom retreat in Salcombe, Devon.

The Mail on Sunday believes passionately that Woodford’s refusal to waive these fees is profoundly wrong and damages the reputation of the wider investment industry.

It is why we continue vehemently to campaign on this issue and will do so until either the regulator – the Financial Conduct Authority – intervenes or the ludicrously rich Woodford sees sense.

We have also published our own blueprint (below, right) to reform the investment industry in the wake of the debacle – as well as outlining the steps fund platforms need to take in future to ensure they always put the interests of ordinary customers first. A ban on fees for moving between fund platforms is key to this.

Woodford’s video was the second he has posted since dealings in the fund were abruptly suspended.

This time there was no apology – just an expression of his determination to turn the fund’s fortunes around by skewing the portfolio towards a basket of undervalued (and liquid) companies selected from the FTSE100 and FTSE250 indices – the 350 largest firms listed on the London Stock Exchange.

In the video he said: ‘The assets

that we are going to be taking out of the [Equity Income] portfolio are the assets that have been the best performing part of the portfolio. But that does not mean that the assets we are switching into don’t have the capacity to perform. And I believe they will be able to deliver very good performance.’ The reaction was hardly positive. ‘Talk about being on the back foot and closing the stable door after the horse has bolted,’ one hugely respected director of a leading investment house exclaimed to me after watching the five-minute video on YouTube.

He ended his succinct opinion of the posting with a one word verdict on Woodford – too rude to print but it comprises four letters and begins and ends with the letter ‘t’.

Our call for Woodford to suspend fund charges on Equity Income has received an equally spirited response and overwhelming backing from readers.

Beryl Williams, a retired customer service manager from Stanmore, Middlesex, invested £35,000 in Woodford Equity Income when it launched in June 2014. The 72-yearold was encouraged to do so by a friend who made money from Woodford when he was managing investments for Invesco Perpetual (the firm he left to go it alone). She was also persuaded by the fact that her online broker Hargreaves Lansdown rated the fund so highly.

‘Not only am I prevented from getting my money out of the fund,’ says Beryl, ‘but Woodford continues to deplete the value of my holding by taking his fees. It makes me really angry.’

Beryl is minded to cut her losses and sell when the fund reopens, though that could be months away. The next review on reopening is not scheduled until early August.

Ian Currie, a retired chartered accountant from Portsmouth, sold half his holding in Equity Income two months before the fund was closed. But he still has some £10,000 invested via an Isa.

The 71-year-old says: ‘The whole episode leaves a bad taste in my mouth. The arrogance of Woodford is astonishing. Even if he only reduced the fund charge while it remained suspended, it would at least create some goodwill among investors like myself who cannot get at their investments.’

Barrie Taphouse, a beer trader based in Bristol, is also an investor in Equity Income. He says: ‘Fortunately, I only have a couple of thousand pounds in the fund, but other people I know were relying upon their investment to help see them through retirement.’

Mr Taphouse describes Woodford’s decision to keep charging fees as ‘an absolute disgrace’. He says the regulator should force