Eighty-six per cent of investors consider past performance as the most important factor when selecting an investment, says a Mori poll for Framlington.
The FSA believes past performance provides little bearing on future returns and is reviewing the use of retrospective data, with a view to limiting or banning its use in investment ads.
Investors also cited the reputation of the investment house and the individual fund manager as well as low charges as other important factors when choosing a fund.
Newspapers are investors' top source of information when selecting Isas, stocks and shares, Peps and unit trusts. But IFAs were more popular than tied agents, banks, building societies and the internet.
IFAs were the most important source of information for investors buying investment trusts, with 32 per cent of investors saying they went to an IFA and 22 per cent turning to the media.