An FSA panel of experts examining past performance in advertising is expected to reject an outright ban but call for further consultation on standardising the presentation performance in ads.
The report, due out this week, is expected to include harsh criticism of current practices.
The panel's minority consumer representatives are believed to have pushed for a ban. The report makes clear that past performance should not be relied on solely when selecting funds.
It may also seek to establish discrete periods against which performance can be measured and which could be included in ads. It is expected to voice concerns about the use of retrospective calculations of how a fund would have performed before it was set up and the use of performance figures over more than five years.
The report is expected to include consumer research which shows the public continue to rely on past performance in fund selection, but the panel is known to be concerned investors are relying on it too much.
Fund managers are privately expressing concerns that the panel may not distinguish sufficiently between absolute and relative performance in their work. There are also worries that the panel's recommendations may restrict fund managers seeking to establish the past performance record of recently recruited fund managers in their ads.
The report does not bind the regulator to any action. Fund managers are privately hoping it may reopen the debate on the inclusion of some measure of past performance in the FSA's comparative tables.