The wait goes on for Woodford investors

For two long years, crucial questions have remained unanswered for more than 300,000 investors who placed their savings in the care of Neil Woodford: who was to blame for his Equity Income fund’s collapse and how much will they eventually lose?

Judging by the limited information provided so far by the Financial Conduct Authority and Link, the fund’s authorised corporate director, the victims will be waiting a good deal longer before they get any closure on one of Britain’s biggest investment scandals.

The most recent update from Link, whose job it was to ensure Woodford complied with rules and that investors were protected, suggests investors will not be repaid — and therefore find out their ultimate losses — until “late 2021” at the earliest. This does little to ease the anxieties of those who stand to lose life-changing amounts, especially savers who have had to delay retirement.

An official verdict on culpability is also some way off. Last week, after much harrying from politicians, the City watchdog finally broke a long silence on its investigation into the failed fund. But those desperate for answers will have been disappointed by FCA chief Nikhil Rathi’s three-page missive.

Treasury select committee chair Mel Stride was certainly underwhelmed, saying “the longer the investigation goes on, the greater the sense of disappointment that will be felt by those who lost out”.

The FCA has form when it comes to dragging its heels on investigating high-profile industry failures. Just ask the investors who lost up to £237m in London Capital & Finance, or those who suffered £104m of losses in the collapsed Connaught Income Fund.

However, these sums are dwarfed by the estimated £1bn that Woodford investors stand to lose by the time the disposal process is completed — whenever that may be.

As my book into the scandal revealed, the regulator was first alerted to concerns over Woodford’s business in 2015, but did not intervene for a further two years.

Whistleblowers claim that aside from being understaffed and overstretched, the watchdog has little interest in rushing cases that show the industry in a bad light.

Rathi’s update last week acknowledged investor frustration, stating that confidentiality had to be maintained for the investigation and any potential subsequent disciplinary process to be “credible and fair”.

Yet for the 300,000 individuals whose money has been trapped in the Woodford Equity Income Fund, the regulator’s glacial response only serves to corrode their faith in the investment industry.

Owen Walker is author of Built On A Lie: The Rise and Fall of Neil Woodford and the Fate of Middle England’s Money