St. James's Place has dropped Woodford Investment Management from the running of a suite of its funds, replacing it with Columbia Threadneedle and RWC Partners.
SJP had been a supporter of the underperforming fund manager and had said, as recently as last week, it would stick by Woodford. However, in a notification to the stockmarket on Wednesday, St James's Place announced it had terminated its mandate with WIM. The mandate comprises £3.5bn worth of assets under management in its UK High Income Unit Trust, UK Equity (Life and Pension), Income Distribution (Life) and SJPI UK High Income funds.
Meanwhile Hargreaves Lansdown has announced it will waive its platform fee while the fund's dealing is suspended and has called on Mr Woodford to do the same.
Under new management, these funds will remain as segregated mandates and St. James's Place will retain responsibility for asset custody and security"
The £3.7bn Woodford Equity Income fund was suspended on Monday and means investors cannot sell the fund and take their cash out. They can not invest in the fund either.
The St James's Place UK High Income fund is down 17% over the last 24 months. Although the fund sits outside the Investment Association sectors, that performance would place it in the lower reaches of the UK All Companies sector.
In a statement, St James's Place said: "While the St James's Place funds managed by WIM were separate mandates and not part of the Equity Income fund suspended earlier this week, the St. James's Place Investment Committee believes these changes will ensure its clients' investments continue to be managed effectively.
"Under new management, these funds will remain as segregated mandates and St. James's Place will retain responsibility for asset custody and security.
"There will be no impact on the investment objective for these funds. The funds' investment criteria will retain a strong liquidity profile, and remain focused on income, with a weighting to FTSE 350 stocks."
The Financial Conduct Authority (FCA) has also confirmed it is "in discussions" with Woodford Investment Management's authorised corporate director Link Fund Solutions and Geurnsey's stock exchange over the embattled investment firm's decision to list illiquid holdings there.
In a statement to investors, fund manager Neil Woodford apologised for the suspension of the Woodford Equity Income fund to redemptions, saying the move was made in the interest of investors and would provide him with the "time and space" to execute his strategy.