The All-Party Parliamentary Group (APPG) on Investment Fraud and Fairer Financial Services has once again pressed the Treasury Committee to scrutinise the Financial Conduct Authority’s (FCA) management of the Woodford debacle which you can read about here https://claimmyloss.co.uk/woodford-equity-income-fund/.

In the somewhat blunt letter to Meg Hillier, the committee’s chair, the APPG highlighted its latest findings from the second part of its supplementary report on the FCA.

The report raises pointed questions about the sluggish pace of the FCA’s investigation into the Woodford affair. It also probes why the regulator didn’t swiftly and decisively respond to early warning signs flagged by reliable sources as far back as 2015, when the crisis was still in its infancy. The APPG further pondered the extent to which the FCA’s approach has dented the UK financial sector’s growth potential by eroding public trust.

“The Woodford mess isn’t just a one-off, it’s a glaring signal of deeper cracks in the UK’s financial framework,” the report asserts. “It’s laid bare problems with fund liquidity, safeguards for investors, and the FCA’s approach to investigations and enforcement. This saga has become a symbol of entrenched flaws that still plague the sector.”

Push for Change

The APPG notes that investors, policymakers, and other stakeholders are clamouring for a regulatory system that’s more open, nimble, proactive, and answerable. Among the proposed fixes are splitting the FCA into distinct entities, one for consumer protection and another for market oversight in a bid to beef up its accountability to Parliament and Consumes, ensuring regulators put investors first, and overhauling the system to restore faith in UK finance and head off future disasters.

The echoes of this scandal are still rattling around, acting as both a grim warning and a rallying cry for root-and-branch reform,” the APPG argues. “Only by tackling these underlying issues can the UK reclaim its standing as a titan of global finance and deliver the consumer protections Parliament has promised and people rightly expect.”

Fallout for Everyday Investors

Victims of the Woodford collapse shared with the APPG that their faith in both the UK financial sector and the FCA has been shattered. Many feel the regulator has fallen short of its duty to shield consumers, branding it as “toothless, unreliable, and more inclined to prop up the finance industry than hold it to account.”

The report reveals a chilling effect: some respondents have shunned UK financial products entirely, shifting their money to the US or Europe, or opting for foreign investment vehicles. Others have abandoned funds altogether, retreating to the safety of savings accounts. One person admitted feeling stuck, lacking the know-how or resources to invest abroad yet now diversifying obsessively out of caution. Another confessed to losing all confidence in investing, unsure who to turn to for advice.

An FCA spokesperson responded: “We’ve made it plain that the settlement scheme’s redress was for management failings, not investment losses. This went through a thorough, court-backed process with all the details laid out so investors could choose their next step. We urged people to consider the scheme as the fastest, most effective way to get a better result than other routes might offer. The £230 million payout far outstripped the firm’s assets, and over 90% of voting investors backed it.”

Our Thoughts

It is hard to believe given the amount of measure the FCA has taken to tighten up regulation that a situation like this has occurred.

We recently drafted an additional overview of Woodford’s situation to help affected consumers identify how they may be able to make claims for any shortfalls and losses of growth they have suffered as a result of being introduced to Woodford which can be read here.

Many of these will lead to claims against financial advisers, some via the Financial Ombudsman Service (FOS) or where adviser firms have failed, claims may need to be brought via the Financial Services Compensation Scheme (FSCS).

For consumers who lack the time or inclination to manage a claim themselves, Claim My Loss from HT Legal provide a no-win no-fee service for managing claims against regulated financial advisers, pension providers and fund managers like Woodford.

Start your claim online today or for further information book a free consultation with one of our Investment Claim Experts today.