The trade body for asset management firms has complained to the BBC over the portrayal of the fund management industry in its Panorama documentary on Neil Woodford.
Panorama: Can You Trust The Billion Pound Investors?, which aired on BBC 1 last week (October 21), described Mr Woodford as a man who “gambled billions, and lost”.
FTAdviser understands the Investment Association filed the complaint as it felt the show misrepresented the fund management industry.
The show was also damning of the finance industry in general. It called the Woodford debacle a “scandal in the city” and claimed the industry “knew Neil Woodford was in trouble” but “nobody told investors”.
Mr Woodford hit the headlines in June when his flagship Equity Income fund was suspended after a period of sustained outflows, including a £250m redemption from Kent County Council that the portfolio’s liquidity could not meet.
The fund was touted to reopen in December but on October 15 it was announced it would be wound down and the former star manager fired from the fund.
He then walked from his remaining two investment vehicles before confirming he had taken the decision to close Woodford Investment Management later that day.
The debacle means investors who are now trapped in Woodford’s suspended Equity Income and Income Focus funds are expected to lose a hefty portion of their assets.
The Panorama investigation stated fund management was “all about guessing which way the financial wind is blowing” and that the Woodford saga had “undermined trust in the whole system”.
It was also critical of the City-watchdog as it claimed there was little oversight of fund managers, who it said operated “out of sight and out of reach”.
On top of this the show covered the accusations against US fund manager Mark Denning. It claimed he purchased shares for his own gain in companies in which his firm, Capital Group, had already invested.
Mr Denning has denied the accusations, stating he is not the beneficiary of the trust which made the investments. He described the comparisons with Mr Woodford as "grossly inappropriate".
A spokesperson for the Investment Association said: “Fund customers have the right to expect the highest standards from fund managers.
“When things go wrong, we need to understand why. The IA and firms across the industry are committed to an open dialogue with regulators and other stakeholders to ensure that any lessons are learned and that customers can feel wholly confident in long-term investment.”
Steve Carlson, chartered financial planner at Carlson Wealth Management added: “Neil is a conviction investor, and yes he made a few bad calls on individual companies as all fund managers can, but the main problem was that neither he nor the regulator were prepared for the liquidity issues the fund faced when a fund of that size had a large numbers of investors wanted to get their money back.
“Nothing fraudulent about it, but lessons need to be learned to avoid it happening again.”
Alan Steel, chairman of Alan Steel Asset Management, said he was “sick of completely one-sided attacks” on Mr Woodford. But he added: “Anybody who put all their eggs in his basket should have known better.
“Even we, despite our long relationship with him over 30 years, had limited exposure — uncomfortable diversification, it’s called.”
The BBC has been approached for comment and the FCA declined to comment.
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This article has been updated to correct the accusations made against Mr Denning and to reflect his response.
