The Woodford scandal isn’t history

A major feature in the Financial Times by Chris Newlands headlined ‘I am still extremely angry’: the Woodford collapse continues to confound investors laid bare the deep, enduring scars left by the 2019 collapse of the Woodford Equity Income Fund (WEIF).

The article captured the profound sense of betrayal felt by over 300,000 ordinary savers. Yet, despite being the UK’s leading individual investor organisation campaigning on this catastrophe from day one, ShareSoc was absent from the piece.

It is disappointing that the mainstream financial press frequently overlooks the relentless, grassroots work done by individual investor representatives; nevertheless, the article provides an important opportunity to reflect on the findings of the report, highlight what the media missed, and reaffirm our campaign priorities.

What the FT article got right

Newlands correctly identified that the fallout from Neil Woodford’s downfall remains raw, unresolved, and profoundly damaging to the UK’s financial ecosystem:

• Staggering consumer losses vs. executive enrichment: some 350,000 investors suffered an estimated collective harm of over £1bn (£2bn if you include the returns they could have earned since 2019 by investing in the MSCI Global index), forcing retirees to cut back on essentials, delay retirement, and alter life plans. Neil Woodford and his business partner Craig Newman extracted £111.5m in dividends from Woodford Investment Management between 2014 and 2019. Even as the fund was suspended, the firm continued charging an estimated £100,000 per day in management fees.
• Anaemic regulatory action: the FCA’s proposed £5.9m personal fine against Woodford and £40m against his collapsed firm are currently contested in the Upper Tribunal. Any resulting fine collected goes to the Treasury rather than victims. A penalty tied up in years of appeals against an entity unable to pay is performative, not punitive.
• Inadequate compensation: the FCA hailed the £230m Link Fund Solutions (LFSL) scheme of arrangement as a victory, yet it forced trapped investors to accept pennies on the pound while effectively granting LFSL a liability shield.
• Erosion of confidence: at a time when the government is desperate to revive retail participation in UK capital markets, investors have pulled over £120bn from actively managed equity funds since 2022. As multiple commentators noted, the scandal demonstrated to an entire generation that when systemic failures occur, institutions protect themselves while individual investors carry the can.

What the FT missed: the relentless work of ShareSoc and others

While the FT highlighted voices calling for an inquiry, it omitted the organisation that has coordinated investor representation, challenged regulatory whitewashing, and consistently demanded accountability: ShareSoc.

Here is what ShareSoc has done — and continues to do — on behalf of Woodford investors:

Mobilised and supported trapped investors: From the moment LFSL gated the fund in June 2019, ShareSoc established a dedicated Woodford Campaign. We provided individual investors with independent updates, analytical webinars, and clear guidance amidst a sea of PR spin from LFSL, Hargreaves Lansdown, and the regulator.

Exposed the flawed LFSL scheme of arrangement: When the FCA and LFSL presented a take-it-or-leave-it settlement, ShareSoc forensically evaluated the proposal. We exposed the severe compromises built into the scheme, warned investors about the total waiver of legal claims, and raised serious governance questions over why the Authorised Corporate Director (ACD) was shielded from fuller restitution.

Held the FCA to account: ShareSoc has consistently challenged the FCA’s regulatory lethargy. It took the regulator nearly five years to publish its findings. Crucial warning signs were ignored — such as the blatant use of the Guernsey stock exchange to circumvent UCITS illiquid asset limits. Former FCA chief Andrew Bailey was promoted to Governor of the Bank of England without ever facing an independent, public cross-examination about oversight failures on his watch.

Advocated for structural ACD reform: We have repeatedly commented on the fundamental conflict of interest within the UK fund host system: an ACD is paid by the fund manager it is supposed to police. True investor protection cannot exist until independent governance with teeth is mandated across all retail fund boards.

Pressed (and continue to press) for an independent Public Inquiry: Alongside parliamentary allies, ShareSoc has continuously campaigned for a statutory, independent public inquiry. The Woodford scandal was not an example of ordinary investment risk; it was a systemic failure of liquidity management, fund governance and regulatory supervision.

The real cost: why Woodford matters to all UK investors

The Woodford debacle cannot simply be swept under the carpet as an unfortunate chapter of the past.

Ministers and regulators cannot expect the public to invest their hard-earned savings into UK equities while white-collar recklessness goes largely unpunished and regulatory bodies act as comfortable buffers for the financial services industry. Investors lose faith not because markets go down, but because rules are not enforced. When restrictions against holding unquoted, illiquid securities in daily-dealing retail funds are bent without intervention, trust evaporates.

ShareSoc will not let this issue fade.

What we need next

• A formal Treasury Select Committee inquiry: Parliament must scrutinise the actions of Woodford Investment Management, FCA, LFSL, and the major distribution platforms that heavily promoted the fund right up to the brink of collapse.
• ACD regime overhaul: The host ACD model must be restructured to eliminate conflicts of interest and ensure true fiduciary duty to underlying unit holders.
• Meaningful personal accountability: Regulatory enforcement must act as a credible deterrent. Meaningful penalties, executive clawbacks, and direct restitution must be the norm when regulations are breached and investors are harmed.
• Prompt enforcement: Seven years have passed since Woodford collapsed. This is far too long.
• The RGL claim against Hargreaves Lansdown (which ShareSoc endorses) continues to progress through the legal system. We hope RGL wins as this will provide additional compensation for claimants.

If you were affected by the Woodford collapse, or if you believe in fair, transparent, and properly regulated financial markets, your voice is essential. ShareSoc will continue to fight for the rights of individual investors until real lessons are not just acknowledged but embedded into the law.

For more information regarding ShareSoc’s Woodford campaign, please click here. To join ShareSoc, allowing us to continue to campaign on behalf of individual investors, please click here.