In his classic book A Random Walk Down Wall Street, the Princeton economist Burton Malkiel writes: “A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.” Last year, the Wall Street Journal threw darts at a list of shares and pitted the resulting random portfolio against those of the cream of the hedge-fund world. The result? The dartboard beat the professionals by 27 percentage points.

The investment world is no place for geniuses; anyone who claims otherwise is a fool or a charlatan. Yet this does not stop money managers touting themselves as gurus, or deter investors looking for stars to follow. Hearts are often broken as a result, and small fortunes laid waste. The unfolding scandal of Neil Woodford is a perfect example. As a star stock-picker at Invesco, he got written up as the man who made middle England rich. Then in 2014 he struck out alone, and the trouble began.

Mr Woodford had made his name by investing in big, unexciting businesses often overlooked by others: tobacco, say, or big pharmaceutical companies. But running his own shop, he specialised in backing tiny startups working at the cutting edge of biotechnology. This was as different a game as moving from striker at Manchester United to spin bowler for the Kolkata Knight Riders, yet intermediaries such as Hargreaves Lansdown and St James’s Place acted as faithful cheerleaders, and small investors piled in regardless. After a glorious start, his funds began heading south, and investors started piling out again. From over £10bn at its peak in June 2017, Mr Woodford’s Equity Income Fund shrank to less than £3.7bn two years later. Haemorrhaging money, Mr Woodfood froze that fund last June, locking in 300,000 savers. It will be liquidated, and his firm has vacated its Oxford offices.

For the UK’s most renowned fund manager, this is an extraordinary fall from grace. The son of a printer, he received a CBE in 2013 for services to the economy, tootled around in any one of a Porsche, a Ferrari, an Audi, and traded while on horseback. His was a lavish lifestyle built on the savings of small investors, for which he took £60,000 a day in fees. It was revealed last week that he and his business partner took nearly £14m in dividends for the year to March 2019, even as their funds sank into deep trouble. The ugly image is of ordinary households watching their life savings evaporate while those in charge reward themselves handsomely for failure. It seems odd that Mr Woodford and company have not waived their payouts but rather whined about “sustained and negative press coverage”.

Many of the problems were caused by the very assets bought by Mr Woodford: stakes in small companies, sometimes not quoted publicly and thus not easily traded. Such illiquid assets, be they stakes in biotech startups or shopping centres, are simply unsuitable for ordinary investors. The Financial Conduct Authority (whose boss, Andrew Bailey, will soon become head of the Bank of England) appears to have been very slow to worry about Mr Woodford’s portfolio. And platforms such as Hargreaves Lansdown must not be allowed free rein to tout their favoured “star” performers. Dressed up as fund research, it is marketing that earns the intermediaries handsome commission. This debacle shows an active fund-management industry both highly lucrative and hugely dysfunctional, enjoying dozy regulation and sharp salesmanship. Mr Woodford may be coming in for some deserved opprobrium, but the real criticism should be aimed at his entire sector.