Investments 

Platforms reassure advisers over Woodford fund suspension

Platforms reassure advisers over Woodford fund suspension

Advisers and discretionary fund managers (DFMs) are still able to get a valuation for the suspended Woodford Equity Income fund, platforms have confirmed.

Discretionary fund managers will also be able to trade other holdings in the DFM portfolios, despite one of the holdings being suspended.

The £3.7bn Woodford Equity Income fund was gated yesterday evening (May 3), meaning investors cannot take their cash out or buy more units of the fund. 

The suspension came following a sustained period of under performance and investors pulling £9m a month from the fund every working day in May. 

It raised concerns investors may be stuck as platforms could block trading on the entire portfolio if a fund is suspended.

But a representative of Quilter said clients of the Old Mutual Wealth platform will see an uninterrupted service.

He said: "Customers can still manage their portfolios whether themselves, via an adviser model portfolio or a discretionary portfolio.

"Transactions will happen proportionally across non-suspended assets. Valuations are still available."

Similarly, a representative of Aegon said: "Advisers and customers can still trade all other funds. Valuations will show for the Woodford assets."  

A representative of Standard Life said: "We have well established robust processes so the impact on customers, advisers and discretionary fund managers using our platforms is minimal.

"We ensure that other trading can continue unhindered. This means that sales to fund withdrawals or income and portfolio rebalancing continue as normal even when within the same portfolio as the suspended fund.

"We also continue to provide values on the fund based on the last published pricing."

The suspension of dealing in the Woodford Equity Income could last up to 28 days, according to Hargreaves Lansdown.

The platform removed the fund from its Wealth 50 buy list following the dealing suspension. 

But shares of Hargreaves Lansdown are 5 per cent lower today, as market participants fear a backlash from clients over the platform's decision to keep Mr Woodford's mandate on its buy list for so long, despite the poor performance and liquidity concerns. 

Shares in the Woodford Patient Capital investment trust are 8 per cent lower this afternoon (4 June) as investors fear that the effect could spill over.

About 75 per cent of the holdings in Woodford Patient Capital are also held in the Woodford Equity Income fund, so investors worry that the sale of shares by the Equity Income fund will cause the prices to fall, and this will hurt the performance of the investment trust.  

david.thorpe@ft.com

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