The FCA has launched its probe into authorised corporate directors (ACDs) on the back of the Woodford scandal.

Wealth Manager revealed in November that the body was understood to have paid visits to a number of ACDs as part of the investigation, though it declined to comment at the time.

The FT reported that Smith & Williamson was among the firms to have been paid a visit, a development it revealed at a closed-door meeting hosted by the Investment Association in December.

A senior ACD executive who attended to meeting was quoted as saying ‘The FCA is lifting up the drains and looking at everything.’

Among the concerns expressed by industry observers of the market are how different sector business models work and whether they genuinely support investors’ best interests.

The FCA’s investigation comes after it was severely criticised for its supervision of Link Fund Solutions, following the suspension and subsequent liquidation of the Woodford Equity Income fund under the ACD’s oversight.

To protect themselves from increased scrutiny and any penalties likely to arise from any shortcomings discovered, many ACDs are already taking preliminary steps, for example limiting illiquid holdings in the funds they oversee.

Fund managers have also come under greater pressure to increase liquidity in their portfolios, with some understood to have been threatened with the gating of their funds by worried ACDs.

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