Fury as millionaire fund boss continues to rake in management fees
Fury as millionaire fund boss Neil Woodford, who has stopped savers from making cash withdrawals, continues to rake in £100k a day by charging them management fees
- Neil Woodford suspended trading from Woodford Equity Income Fund this week
- Despite this, his firm is continuing to charge those using fund management fees
- One investor said he should be footing some of the bill charged to savers himself
A millionaire fund manager who locked savers out of their nest eggs is facing demands to hand back nearly £100,000 per day he is raking in from fees.
Neil Woodford told investors they could no longer pull their cash out of his flagship £3.7billion fund in a drastic move to stop a rush to the exit.
His move blocked savers from accessing their money for at least 28 days. But despite this, Mr Woodford’s firm is continuing to charge them management fees.
Yesterday he was urged to hand back the money to dismayed savers ‘as a g esture of support’ in a row that overshadowed a videoed message of apology he released.
And in a move that piled further pressure on the 59-year-old, one major investment platform waived its fees for those using Mr Woodford’s fund – and called on him to do the same.
Neil Woodford (pictured) told investors they could no longer pull their cash out of his flagship £3.7billion fund in a drastic move to stop a rush to the exit
Emma Wall, Hargreaves Lansdown’s head of investment analysis, said: ‘We do not think it is fair to charge our clients a fee while they cannot trade in the fund. This is a frustrating and difficult time for clients and we are doing what we can to support them.
‘We have been in communication with Woodford Investment Management to explain why we think this is the right thing to do and have put pressure on them to do the same.’
The average cost of investing money in Woodford Equity Income is around 0.65 per cent to most investors, or £65 per year on a £10,000 investment.
This means savers hand over about £24million per year in management fees to the fund, or around £93,000 per working day. Mr Woodford, once one of Britain’s most celebrated fund managers, has made a fortune from his career and owns luxurious homes in Devon and the Cotswolds.
The Mail revealed yesterday that the father-of-two has extracted about £63million in dividends and shared profits from his businesses overall since 2015, although some of this was given to charity or reinvested.
The average cost of investing money in Woodford Equity Income (Mr Woodford is pictured) is around 0.65 per cent to most investors, or £65 per year on a £10,000 investment
Yesterday retired medical secretary Joan Hammond, who has thousands of pounds invested in Mr Woodford’s fund through Hargreaves Lansdown, said the entrepreneur should be footing some of the bill charged to savers himself (Mr Woodford is pictured left with employees)
Merryn Somerset Webb, editor of financial publication Moneyweek, tweeted: ‘If this was your fund, and you now had to suspend it, I wonder if you would cut your normal management fees in a small gesture of support for your investors. Seems Woodford isn’t planning to.’
Yesterday retired medical secretary Joan Hammond, who has thousands of pounds invested in Mr Woodford’s fund through Hargreaves Lansdown, said the entrepreneur should be footing some of the bill charged to savers himself.
The 63-year-old, from Forest Gate, east London, added: ‘I think he should say, “This is my fault, I am not going to charge investor fees and I will pay them myself”. If Neil Woodford has any financial integrity left he will, at the very least, suspend fees for those invested in the fund.’
The pensioner, who first invested using Hargreaves in 2009, describes herself as an amateur. ‘In a way I do feel trapped. I am going to have to wait and see what has happened once these 28 days are up,’ she said.
‘I feel so sorry for some investors who would have had their pensions invested in this fund.’
In a video on Tuesday, Mr Woodford said he was ‘extremely sorry’ for freezing withdrawals.
It followed an outflow of hundreds of millions of pounds from Woodford Equity Income as investors became nervous about a series of bad stock picks.
Mr Woodford said: ‘When it is appropriate we will open the fund so that you can buy and sell as normal. As difficult a decision as this is… we felt that this was necessary to protect your interests.’
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