The Financial Services Authority, the City’s leading watchdog, is introducing regulations to clamp down on the way investment groups use past performance in ads for their products.
From December, firms will no longer be able to suggest that a fund’s growth in the past is indicative of its future prospects, when the FSA turns the current guideline to this effect into a set of rules.
The possibility of introducing single standard measures for performance, price and risk is also being investigated by the watchdog.
The FSA’s decision follows the report of a task force, which argued that the use of details of past achievements should be more tightly controlled, rather than banned outright.
Unsurprisingly, Fidelity, a leading Isa (individual savings account) provider, decried the move as a “further attack on active fund management,” adding that single standard measures would be “nannyish”.
News source: The Times (London)