The boss of Britain’s City watchdog has joined calls for under-pressure investment guru Neil Woodford to waive management fees for his suspended fund.
Andrew Bailey, chief executive of the Financial Conduct Authority (FCA), said Mr Woodford should “consider his position” on charging fees.
It comes after Nicky Morgan, MP and chairwoman of the Treasury Select Committee, urged Woodford Investment Management to waive fees on its equity income fund, which blocked investors from taking their money out last week.
The City heavyweight suspended the fund “to protect investors’ interests” after they withdrew around £560 million from it over the previous four weeks.
Mr Bailey told BBC Radio 4’s Today programme: “I agree with what Nicky Morgan said – I think he should consider very seriously, I think she used the word ‘gesture’ – use what word you like, he should consider his position.
“However, from our point of view, we need him to manage these assets more than ever because his job now is to get this fund back into a position where there can be orderly trading.
“So he has his work cut out now.”
The frozen Woodford Equity Income Fund is the company’s largest, with a reported value of £3.7 billion, but this is down heavily on the £6.8 billion recorded a year ago.
Last Wednesday, it emerged that the FCA was demanding answers from Mr Woodford and his brokers over their decision to invest so heavily in unlisted companies based offshore in Guernsey.
There was no suggestion of wrongdoing at Woodford Investment Management, the watchdog said, but officials want to understand the chain of events leading to the suspension.
But there have also been questions over why the FCA failed to step in earlier, with former City minister Lord Myners claiming the watchdog missed “clear warning signs”.
Ms Morgan also said on Monday she had written to Mr Bailey to ask for more information on the suspension and its supervisory contact with the Woodford fund.
Over the weekend, Hargreaves Lansdown chief executive Chris Hill apologised to investors after the company’s clients found their money trapped in Mr Woodford’s funds.
Hargreaves Lansdown has seen its shares steeply decline over the past week amid continued pressure on Mr Woodford’s fund, with the stock down another 2% on Tuesday.