This week saw Link pull the plug on the Woodford Equity Income Fund (WEIF), leading to the investment manager’s exit from its other vehicles.

WEIF investors don’t know how much of the 85p current valuation will be returned to them in 2020. The Patient Capital Investment Trust is trading at 33p on the 2015 launch price of £1. WEIF investors should therefore prepare for disappointment.

Hargreaves Lansdown revealed that it had over 5% of its own-brand multi-manager funds in WEIF – around £500m. Flak has been directed at investment platforms that were promoting Woodford, with Hargreaves Lansdown bearing the brunt. Trading has remained brisk with AUA hitting £100bn and 35,000 new customers since the summer, but the reputational damage can be seen through the share price.

HL is a surefooted and dominant market leader in a rapidly expanding sector by way of the digitalisation of investing and the trends around increasing self-reliance. The platform has typically been ahead of major market trends, whether that has been D2C fund investing or self-directed pensions.

The current trend is away from unfettered open architecture access to thousands of funds, towards investment ‘solutions’. Again, Hargreaves Lansdown was ahead of the curve on this, with the launches of its own multi-manager funds. However, the Woodford debacle has dented its reputation in this area.

The mission of HL and others to broaden access to investing has been impeded by the Woodford affair. It has introduced all sorts of anxieties to individuals beyond thinking about bog standard investment returns. How much does the end-investor need to know about liquidity, OEIC rules and ACDs? If funds can blow up unexpectedly, what about platforms or wealth management groups?

It begs the question; how much do you need to know about the wider industry to make investment decisions for yourself or others? To what extent should this be the job of the regulator?

The banking industry may never regain the faith it lost a decade ago. The investing industry must respond effectively to this mini crisis or potential investors will remain on the side-lines.