A landmark fine levied against one of the UK’s biggest fund managers last week has sent shock waves through the City, where insiders say the penalty indicates regulators are finally taking a tough line after a series of scandals that have shone a spotlight on the industry.

The fund management sector has come in for heavy criticism following the implosion at Woodford Investment Management and other high-profile fund collapses. There are also longstanding concerns about “closet tracking”, where managers charge fees for actively managing investments while offering performance similar to a broad index.