[lead]Reputation should be everything in financial services, particularly in asset management. It is therefore excruciating to read that Neil Woodford plans a comeback before the FCA has completed/published its report into the collapse of his Equity Income Fund.[/lead]

He was quoted in this week’s Sunday Telegraph as saying “…I don’t want to, for the rest of my life, hide away and beat myself up about things that happened the best part of two years ago…” Well, there are two problems with this statement. First, any professional will tell you that two years is no time at all in the investment world. I think he can ‘suffer’ a little longer. Second, some investors in Woodford’s fund, of course, will never get their losses back so that makes moaning about the pain of two years seem even more short-term!

Another aspect of Woodford’s comeback also sits uneasily. His new Jersey-based fund will apparently be aimed predominantly at institutional investors only. Is this an attempt to avoid tougher regulation or simply about an investment approach that is suitable for professional investors only? Either way, there were no such qualms in his previous incarnation and a painful loss is a painful loss whoever suffers it. Just ask Kent County Council.

The real lessons that come out of the Woodford affair will be about oversight and compliance, most pertinently by ensuring products with liquidity constraints are marketed in the right way, to the right audience. More subtly, they will be about the dangers of an alleged unchecked ego and the merits of a team-based approach to fund management over the potentially faster-selling marketing approach of relying too heavily on promoting ‘star’ fund managers. Is this something the FCA is focusing on? Who knows? But what does seem sensible is that Neil Woodford should be barred from managing funds until the FCA has completed its investigation and published its findings. You are innocent until proved guilty and it seems fair to all parties to just delay any relaunch for a while longer to digest the FCA’s conclusions, even in the face of a painful two years to date…