11th Jun 2019 13:04
(Alliance News) - Reacting to the fallout from Neil Woodford, the head of the Financial Conduct Authority said he will "look again" at how fund supermarkets create "best buy" lists, the Financial Times reported Tuesday.
The meltdown from Neil Woodford's flagship equity funds freezing redemptions continued after Andrew Bailey, speaking on BBC Radio 4's Today programme, said the FCA will ensure fund supermarkets "have been abiding by the principles" that demand they be impartial, thorough and timely when creating best-buy lists of favoured funds, which retail investors rely heavily on when choosing which funds to buy and sell.
FTSE 100-listed Hargreaves Lansdown PLC creates these lists and had LF Woodford Equity Income Fund and Woodford Income Focus Fund on its Wealth 50 list. The two funds were removed last Monday following the news Woodford was stopping investors from taking back their money.
According to the FT, Hargreaves Lansdown customers accounted for about GBP2 billion of Woodford's GBP10.6 billion assets under management at the end of March.
Bailey said: "We look at how funds construct these best-buy tables, and the principles are they that should be impartial, do it thoroughly and they should make sure it's done promptly in the sense that they should be up-to-date. We will look at these again to ensure that they and indeed and others - it's not just a point about Hargreaves Lansdown - have abided by those principles."
The FCA has already examined best-buy lists but decided in March not to set new rules, the FT said.
In his interview Tuesday morning, Bailey also added pressure on Woodford to waive his management fees. Earlier in the week UK Treasury select committee Chair Nicky Morgan demanded Woodford waive his management fees whilst the suspension remained in place.
According to Morgan, Woodford receives about GBP100,000 per day in fees.
https://www.ft.com/content/fe2741b6-8c33-11e9-a24d-b42f641eca37
Shares in Hargreaves Lansdown were down 0.7% Tuesday at 1,899.50 pence each.
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