It’s just a guess, but we imagine there are not that many fund managers who the general public have heard of. With the exception of Neil Woodford – and those who had not heard of him before have certainly heard of him now after weeks of media coverage on his fund’s struggles.

There are many talking points to work through in the wake of it all but what’s caught the public’s interest the most is the fact that funds cannot be withdrawn and the under-performance of the Woodford Flagship Fund has shocked many investors who thought they were backing a winner.

1. Read the small print

Some of the coverage after the event centred on people finding they could not withdraw their investments from the fund. That’s because they have been invested and not all of those investments were liquid. Once the press got wind of a potential run on the fund, Mr Woodford shut the fund to further withdrawals as he felt buyers would offer an artificially low price. The FCA is looking into the legality of this move at the time of writing.

2. Don’t put all your eggs in one basket

One danger of self-selecting funds is the temptation to go for ones with the best marketing or chase a star fund manager. Platforms like Hargreaves Lansdown who produce top fund lists guide their users towards the funds they believe will offer a return but there’s no sense checking on whether someone is overinvested in a particular fund or not.

Diversification according to someone’s risk appetite and capacity for loss is central to good investment planning and those who go it alone are unlikely to have the time or the nous to identify whether funds are aligned to their unique situation and whether they are sufficiently diversified.

3. Past performance is certainly not a guide to future returns

It’s the investment risk warning that’s all over investments but the cult of the fund manager can cause people to ignore it. In its first full year Woodford’s flagship fund returned 16% but overall the fund has returned just 0.36% since its launch, which is a long way from Neil Woodford’s returns when he was at Invesco. £1,000 invested there when he started was worth £23,000 by the time he left.

The nature of investments makes them unpredictable – if they were truly predictable, we would all be much better off. That’s why spreading risk is a sensible approach to investments. It doesn’t guarantee returns but it means if one fails it will have less of an effect on an overall position.

4. There’s nobody else to blame

If you invest directly and it doesn’t go well, there may be no recourse. In some cases an investment into Woodford may have been unsuitable. The BBC interviewed one private investor who commented “when you are aged 76, you don’t want to lose £3,600, when you are not going to get it back. You don’t have time like a 30-year-old.” When taking investment advice from a financial adviser an investor’s risk profile will be taken into account – particularly their ability to take risks with their investments, including factors such as the investor’s age.