Reaction: Woodford IM could be on its last legs

The surprise decision by Link Fund Solutions to wind the fund up was in the best interest of investors, the ACD said. However, Woodford disagreed, as does Darius McDermott, managing director of Chelsea Financial Services.

McDermott said the decision, seemingly taken without consultation with WIM, "does seem a little odd and out of the blue, especially with Brexit possibly just days away".

He added that he did not think it was necessarily the case that investors would get their money back quicker if the fund was wound up than if they waited for the fund to re-open.

He continued: "This action also makes Woodford a forced seller of all stocks - stocks that the market place and short-sellers are all aware of. It may well mean that less money is returned to investors, so the jury is still out on this one.

"My other concern is what happens with Woodford Income Focus and its investors. It's all a mess and, frankly, I don't think this is a good outcome for investors at all."

Ben Yearsley, director at Shore Financial Planning, said the decision "effectively spells the end for Woodford Investment Management", with Adrian Lowcock, head of personal investing at Willis Owen, adding "we have seen the complete demise of the most famous fund manager the UK has seen for years".

Lowcock added: "The lesson investors need to take from this is summed up in the old adage - the market can remain wrong longer than you can remain solvent."

He cautioned on contagion risk to Woodford's other funds - Woodford Income Focus and Woodford Patient Capital.

Yearsley noted WIM does not get paid a fee for running the latter, while the former has seen its assets slump to under £300m. He added that Woodford would "struggle to raise any new money".

Lowcock continued: "The board of Patient Capital Trust need to put the investors first, ahead of their own interests and those of Woodford, and ensure that investors are well protected. Sometimes the best thing is to draw a line on the past and move forward from where you are today."

Analysts at investment company broker Stifel said they believe the news "makes it more likely that the Woodford Patient Capital board will appoint a new manager and the trust will also move to run-off".

On a broader, regulatory point, the commentators called on the Financial Conduct Authority (FCA) to do more to ensure unquoted and illiquid assets cannot be held in open-ended funds.

Ryan Hughes, head of active portfolios at AJ Bell, said: "For the Woodford debacle to have any positive outcome it must now serve as a catalyst for the FCA to speed up its review of illiquid assets held in UCITs funds."

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• Woodford Equity Income
• Neil Woodford