Neil Woodford has chosen a notably significant week to unveil his plans for a revival in the investment world. The former UK fund manager, known for the dramatic collapse of his investment boutique in 2019, announced a new venture an investment strategy platform referred to as W4.0 on Holy Monday.

Woodford's previous tenure in finance was marred by controversies, particularly when regulators scrutinized his approach to managing liquidity risks, labeling his understanding as defective. As he seeks redemption in the public eye, it remains to be seen whether he will garner forgiveness from former investors and critics alike. Regardless, his pitch for a service offering followable investment strategies designed by Neil Woodford, that you can act on through your existing account raises several concerns that deserve scrutiny.

The foundation of W4.0 is built on the concept of providing customers with the flexibility to adjust their investments and execute trades through their own brokerage accounts. This approach attempts to separate W4.0 from what regulators formally define as copy trading, yet the fundamental appeal remains unchanged. For many amateur investors, the allure lies in the perception of receiving professional guidance, allowing them to retain a sense of control over their investments rather than solely relying on passive index trackers.

There is a clear market demand for such strategies. For example, EToro, a leading platform in the copy trading arena, has experienced remarkable growth, expanding from approximately half a million accounts in 2019 to over 3 million by 2024. However, just because a concept gains popularity does not inherently validate its prudence. EToro reports that only about 35 percent of its popular investors accounts that everyday users can choose to emulate outperformed the S&P 500 in 2024. Achieving consistent success is a considerable challenge, with EToro's top trader only having surpassed the US index in two of the past five years.

Woodford aims to establish himself as a more mature alternative to the often reckless and impulsive strategies seen in the realm of copy trading. Nonetheless, such practices can inadvertently encourage users to make bold, speculative trades or to engage in frequent transactions. This raises the question: why would someone pay a monthly subscription for a portfolio that mirrors those of other users or remains static for long durations?

One of the most contentious assertions made on W4.0s introductory web post is the claim that the financial products most people are offered still look a lot like they did 30 years ago: rigid, opaque, and expensive. While it is valid that many retail investment options still operate within traditional frameworks even exchange-traded funds (ETFs) might be seen as a modern iteration of age-old investment vehicles the rise of ETFs and index trackers has undeniably provided consumers with much more diverse and economical investment choices than in previous decades.

Evidence suggests that investors are quite satisfied with the evolution of investment products. According to data from the Investment Association, the proportion of retail assets under management in index-tracking funds surged from 11 percent in 2015 to an impressive 25 percent in 2024.

On a recent podcast, Woodford expressed his frustrations over never having the chance to rectify his performance following the extensive period of losses that led to his boutique's downfall. However, even if W4.0 were to achieve success, it is unlikely that it would reverse the prevailing trend away from the star manager culture that Woodford once embodied. The investment landscape is shifting, and more subdued funds are steadily gaining traction.

For more insights, you can reach out to the author, Nicholas Megaw, at nicholas.megaw@ft.com.