The chair of the Treasury Committee, Nicky Morgan, has said she expects the asset management sector to face more oversight after Neil Woodford’s flagship fund was suspended earlier this month.
Morgan said that her committee would get behind increased scrutiny from the Financial Conduct Authority in the wake of the scandal.
Woodford froze his £3.7bn flagship fund earlier this month, leaving investors unable to take their money out.
“Given what has happened in the last weeks, I would expect the scrutiny to increase, and the committee would certainly support the FCA if it was to do so,” Morgan told a group of investors this morning.
The MP also reiterated her calls for Woodford to drop his management fees while the fund is suspended.
“Is it fair to market an open fund to retail customers, but then no longer allow them to withdraw their money?” she asked.
“And yet they keep on charging the fee at the same rate, regardless.”
Morgan said that a decade after the financial crisis, the sector must put customers first.
“The reputation of the financial services industry … was dragged through the gutter after the financial crisis,” she said. To regain trust the industry “needs not only to be on the side of the consumer, it must be seen to be.”
The Woodford scandal “further erodes trust” in the sector, she added.