JEFF PRESTRIGE: Regulator dozes as Neil Woodford woes strike home
JEFF PRESTRIGE: Financial Conduct Authority dozes off as Neil Woodford woes strike home
While much has been written about the disgrace of investment giant Neil Woodford, the financial angst it has caused thousands of investors has done little to wake the regulator from its slumber.
The Financial Conduct Authority, it seems, is sleeping like a hibernating dormouse, oblivious to the need to take swift action against those who played a significant role in the demise of the multi-billion pound woodford Equity fund. Income and asset manager Woodford Investment Management. So far, 16 months have passed since the suspension of Equity Income, but the regulator has held no one responsible.
No Woodford megalomaniac investment; not the Fund Supervisor Link (about as useless as the FCA in protecting the interests of investors); and not those (Hargreaves Lansdown) who promoted Woodford like he had an investment halo sitting six inches above his head.
Asleep at work: 16 months have passed since Neil Woodford’s stock income was suspended
An unacceptable situation, especially since since 2016, the regulator has granted its staff bonuses of more than 125 million pounds sterling.
To do what ? Be part of an organization that has done little to protect investors from financial scandals such as Woodford and failed mini-bond issuer London Capital & Finance? Talk about selfishness. Rewards for failure.
No wonder the boss of the regulator, Nikhil Rathi, promised to remove them after conceding that they had “not been effective in stimulating individual or collective performance”. Too fair. No wonder the president of the regulator since April 2018 is stepping down a year earlier.
The harm that the Woodford debacle has caused investors was highlighted a few days ago by research conducted by the Association of Investment Companies (AIC). His finding that 86 percent of Woodford’s investors suffered financially from the Equity Income suspension is hardly revealing. The findings on general welfare and investor confidence in the investment industry are much more striking.
Some 53 percent of those polled say they have been emotionally affected by the worrying turn of events in Woodford, while 77 percent say their confidence in investment managers has declined.
Quite disturbing. But of course, the regulator will ignore the research results and push back AIC’s reasonable demand for stricter rules on the type of assets in which funds set up in the same way as Woodford Equity Income can invest.
Regulatory hibernation is the order of the day and night.
Is the increase in contactless payment really a good thing?
I’m not sure that increasing the contactless payment limit to £ 100 on Friday – without the need to enter a PIN – is a good thing.
It will surely be seized by fraudsters who will now be able to spend up to £ 300 accumulated on a stolen card before being forced to enter a PIN code.
For now, I will be asking my bank and credit card provider to keep my contactless limit at £ 45 – most banks and card issuers have already indicated that they will allow customers to set theirs. Indeed, my bank always asks me to enter a PIN code when I buy a black filter alarm clock for £ 1.25 at Pret A Manger on my way to work.
Annoying? Every once in a while, yes, but I’d rather do business with an organization that takes my financial security seriously than sit idly by and allow fraudsters access to my hard-earned money.