Financial advisers to blame for over-subscription to frozen ING funds

Greenslade said "advisers took what they wanted" from a Morningstar report to try and boost investment in the Regular Income Fund (RIF).

The Morningstar report, prepared in April 2007, suggested around 25% of a defensive portfolio could be invested in RIF, but it did not include an allocation to ING's other CDO fund, the Diversified Yield Fund (DYF).

"The issue is, those advisers who wanted to sell the products, looked at certain aspects and took them in isolation," he said. "Morningstar are being unfairly bagged," as the company raised warnings about the funds in September 2007, six months before the funds were frozen, and advisers had access to the documents, he said.

"There were a number of guidelines around the use of the portfolios and one was that advisers could not be selective on what they chose to use and what they chose not to use within the portfolios."