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FSA team investigates past performance ads

The FSA has assembled a specialist team to monitor how past performance is used in investment product advertising, raising fears it may lead to a crackdown.

The move follows concern by the regulator that past performance, a mainstay of many investment houses&#39 ad campaigns, may lead consumers into making decisions on the back of misleading figures.

The FSA has already omitted past performance from the proposed financial product league tables due for launch early next year. It published a report in August arguing investors cannot increase their chances of picking a strong product by looking at past performance.

Spokesman Andy Flem-ing says: “We have a team ofpeople looking at past performance and seeing how current guidelines on what advertisements can and can&#39t say are being applied. As yet, we have no plans to ban the use of past performance.”

Some IFAs welcome the move. Hargreaves Lansdown investment manager Ben Yearsley says: “We are trying to move away from its use and welcome any move which might prevent investment companies from advertising past performance after the fund manager has left, for example. This is a scandal which needs looking at.”

Gartmore head of corporate communications Peter Yandle says: “I think, whether we like it or not, people look to past performance as an indicator so it would be a retrograde step to remove past performance altogether.”

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