View more on these topics

HBOS whistleblower warned on switches from cash to corporate bonds

HBOS whistleblower Paul Moore has revealed he had concerns that retail savers may have been pushed into corporate bond funds without understanding the additional risk.

In new written evidence submitted to the Treasury select committee late last week, Moore claims to have repeatedly called for a review of corporate bond fund selling practices in 2004 after a boom in sales.

He says that his call for a review was ignored by Jo Dawson, who ran the sales force, until the FSA specifically required the bank to look into corporate bond sales.

Dawson was later appointed as Moore’s replacement when he was later sacked.

Moore says: “As the yields went down on standard deposit accounts, many customers were switched into corporate bond funds and [the Group Regulatory Risk department] and I were not confident that customers who were switched out of deposit accounts into CBFs would really understand the additional risks they were taking on and we wanted to ensure they did.

“What was clear was that the advisers were strongly targeted to sell CBFs to deposit account customers whose deposits matured and the margin HBOS made on CBFs was very much higher than on deposit accounts.”

He adds: “This obviously increased the incentive to sell them.”

Moore also said he raised concerns over the potential misselling of payment protection insurance at HBOS.

He also said it might be in the public interest for a detailed inquiry into the banking crisis to take place outside the Treasury select committee.


Hugh Doxat-Pratt

Alpha Financial Consultants director Hugh Doxat-Pratt is feeling upbeat about the future, having just been awarded certified and chartered financial planner status.


Case study: administration — managing group life schemes

Our client leads the global market in high-tech electronics manufacturing and digital media. The trustees of the company’s final salary pension scheme insure death-in-service lump sum and dependants’ pension death benefits for active employees, as well as dependants’ pension benefits for deferred members (those who have left service).


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm