Somewhat predictably a group of MPs have this week called on FCA chief executive Andrew Bailey to resign over the £236m London Capital and Finance mini-bond mess.

This week has not been a good week for fund manager Neil Woodford.

Whether his eponymous fund management business Woodford Investment Management will survive I do not know. I do know Neil Woodford is a very talented fund manager. He was three years ago and he still is today even if one of his funds has hit the buffers.

The harsh fact is that no fund manager can outperform all the time; they all have bad patches. All Financial Planners know this. Explaining this fact to clients is a different story.

I’m not going to dwell on what blunders were made, whether some investment providers - such as Hargreaves Lansdown - were tenacious cheerleaders for Woodford despite the recent evidence and whether some investors were wise to get out immediately and crystallise their losses. Only time will tell.

As those will longer memories than me (and yes there are a few) will know, fund managers can run out of luck and a run on a fund can be a precursor to oblivion. I suspect Mr Woodford will fight tenaciously to keep his firm going and he will have plenty of support. I hope he survives but that will be down to investors.

What I’m more interested in is what all this says about fund management and stock pickers.

About a decade of so ago I remember meeting up with the head of a large UK wealth management firm in central London. The chap I met was a huge fan of Neil Woodford, then at Invesco Perpetual, and put him only slightly lower than God in the pecking order. When I questioned whether this unbridled enthusiasm for one fund manager was such a good thing he was appalled. His words were something along the lines of “just look at his track record.”

SJP terminates Woodford mandate after fund suspension

As experienced planners know, there are of course dangers with ‘star’ fund managers and the cult of personality, however strong that personality is.

Readers with longer teeth will remember a firm called ‘New Star’ - also quite fancied by HL - and its demise.

In hindsight Mr Woodford may have regretted naming his own firm after his own surname. There’s just no place to hide even though investment decisions would not have been made exclusively by him. He is not the only person working at the firm.

I’ve often thought that some planners approach to investing, based on principles of heavy weighting towards passive, low cost funds, broad portfolio spreads, detailed fundamental research and balanced global asset allocation is a dull but worthy approach. Some have eschewed the more flamboyant world of active management.

I’m beginning to think this may not be just the right approach but perhaps the only approach to successful investing. All the rest is betting. Just the odds are different.

Personally I think there is still a major role for active management but it must be only a part of a bigger portfolio. Investors who have put only 1% or less of their portfolio with Woodford may not be too concerned by this week’s problems. For those will half their life savings in Woodford it may be a different story.

I wonder which sort of investor got advice first?

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Kevin O’Donnell is editor of Financial Planning Today and a financial journalist with over 30 years of experience.  

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A new report out today suggests that 6 million people would seek financial advice if it were cheaper.

I often smile when I read about ‘the next big thing’ in financial services -it’s a sure sign that the so-called experts have no idea.