FCA fines and bans Neil Woodford
The fund manager’s flagship UK equity income strategy had £3.6 billion in assets when it was suspended in 2019.
5th August 2025 13:40
by Sam Benstead from interactive investor
The Financial Conduct Authority (FCA) has banned Neil Woodford (pictured) from managing money for retail investors, as well as holding senior manager roles.
The City watchdog also fined the former fund manager £5.9 million, and hit his investment firm, Woodford Investment Management, with a £40 million fine.
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Woodford ran the Woodford Equity Income fund until 2019, when it was suspended following outflows that it was unable to meet, partly due to the build up of hard-to-sell unlisted investments.
At the time, the UK equity fund had £3.6 billion of assets, having peaked at just over £10 billion in 2017.
Since then, the fund’s assets have been sold off, with about £2.6 billion in total returned to around 300,000 investors.
The FCA concluded that between July 2018 and June 2019 Woodford Investment Management and Woodford himself made “unreasonable and inappropriate investment decisions”, such as disproportionately selling more liquid investments and buying less liquid ones over this period.
“This meant that at the time of suspension only 8% of the investments held by Woodford Equity Income could be sold within seven days. Under rules in place at the time, investors should have been able to access their funds within four days,” the FCA noted.
Therefore, the FCA found that Woodford did not react appropriately as the fund’s value declined.
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The FCA added: “Mr Woodford held a defective and unreasonably narrow understanding of his responsibilities. Despite his senior role, he did not accept that he had a responsibility to oversee the management of the fund’s liquidity, including in interviews conducted by the FCA.
“He also failed to provide proper oversight of Woodford Investment Management’s relationship with Link Fund Solutions, Woodford Equity Income’s authorised corporate director, including after Link raised concerns about the fund’s liquidity.”
Overall, the FCA concluded that Woodford and Woodford Investment Management’s failings led to a significantly increased risk of the fund being suspended.
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The FCA said Neil Woodford and Woodford Investment Management had referred its decision notices to the Upper Tribunal where each will present their case. The FCA added: “Any findings in the Decision Notices are therefore provisional and reflect the FCA’s belief as to what occurred and how it considers their behaviour should be characterised.”
The FCA previously secured a £230 million redress scheme for those investors stuck in the fund when it was suspended. The redress scheme was proposed by Link Fund Solutions.
Woodford Investment Management said it "strongly disagreed" with the FCA's decision and intended to challenge it, arguing that it did not "reflect a balanced assessment of evidence."
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