Financial Conduct Authority  

FCA criticised for mulling retail assets ringfence

If DFMs and wealth managers were included in the ‘institutional’ bracket, however, this would not change the situation for all the retail clients who invest via advisers and DFMs.

Andrew Hardy, portfolio manager at MGIM, agreed, adding the FCA’s suggestion “entirely missed the point”.

He said: “Separating retail and institutional investors may have helped somewhat in hindsight, but considered on an industry-wide basis, such a change may cause more problems than it solves. 

“Furthermore, the lines are often blurred between institutional and retail investors, which would make such separation hard to implement in practice.”

This was not the first time the FCA has floated the idea of separating retail and institutional investors’ money.

The regulator proposed the split in February 2017 following the aftermath of the 2016 EU referendum when a raft of property funds suspended redemptions.

At the time it suggested to either prevent retail and institutional investors’ monies being in the same fund or segregating the two sectors at a share class level.

Since the Equity Income fund's suspension Mr Woodford has walked from his remaining two investment vehicles and taken the decision to close Woodford Investment Management. FTAdviser took a look at the moment things turned sour for the former-star fund manager.

The FCA declined to comment.

imogen.tew@ft.com

What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.