Dealing with CMC tactics
It seems that claims management companies are suffering the type of forensic scrutiny that advisers have been asking for since the Ministry of Justice found itself unable to deal with their antics.
I trust the Financial Conduct Authority will also look at the pushing practice whereby a [subject access] request for the client’s file is used as a means of searching out matters to complain about.
Similarly, the FCA needs to look at tactics such as newspaper advertising for complaints from people invested with certain, now defunct, insurers and the vile process of suggesting that any investment that has fallen in value is indicative of mis-selling.
Highclere Financial Services
I do not gloat that Mr Woodford has been forced to suspend withdrawals from his leading unit trust.
While we never had any exposure to it, for other reasons, we do have some limited exposure to some of the direct stocks that he owns too and those have been sold off in sympathy as holders anticipate these will be the sorts of shares that the funds will need to realise to meet the requests for redemptions, thus making the outcome even poorer for his holders.
It must be very stressful for the fund managers and especially so when they are forced to sell things that really they do not want to sell too – at this moment in time.
There comes a point, however, when if a company’s share price hits such a low level that the whole company becomes a worthwhile target for a predator or indeed for the company itself to ‘do something about it’.
It would help Mr Woodford if some good news arose, though sadly with the ongoing procrastination over Brexit, UK-centric shares have fewer followers as prospective investors sit on the sidelines waiting till they perceive they know how the future is looking so they can make better informed decisions.
As for us, as independent discretionary investment managers too, we may well now add Woodford Patient Capital Trust shares to clients’ holdings.
The discount to the underlying net asset value is now extreme and the trust does not suffer the same pressure as those wanting their money out but who have to sell their shares to another buyer.
Perhaps Mr Woodford should look to convert his Equity Income fund into an investment trust to take on all the underlying investments – that would also create an instant uplift in value as those major shareholdings would not have to be dumped on the market after all and there would be an instant recovery from this point.
Woodford Investment Management is presently quite small in the run of things compared to some other popular investment managers and index funds.