In new written evidence submitted to the Treasury select committee, Moore claims to have repeatedly called for a review of corporate bond fund selling practices in 2004 after seeing a boom in sales.
He says his call for a review was ignored by Jo Dawson, who ran the HBOS salesforce at the time, until the FSA specifically required the bank to look into corporate bond sales.
Moore said: “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 mat-ured and the margin that HBOS made on CBFs was very much higher than on deposit accounts. This obviously increased the incentive to sell them.”
Moore also said he raised concerns over the potential misselling of payment protection insurance at HBOS.
Worldwide Financial Planning IFA Nick McBreen says: “I have had recent experience of clients that have been moved from deposit accounts into corporate bond funds by bank advisers and were told the products were low risk. People are under the illusion that you can just compare the yield with an interest rate but it is not that simple and you have to consider the fact that charges are deducted from capital, not income.”
HBOS could not provide figures for the number of depositors switched into corporate bond funds over the period.