Companies contemplating using past financial performance figures to entice investors will have to make sure the information isn’t misleading, or they’ll be dealing with the Australian Securities and Investments Commission (ASIC). New guidelines will help improve the quality and transparency available to retail investors, says ASIC Executive Director of Consumer Protection Peter Kell.

“Our message to industry is that if you’re going to use past performance information in your advertising, you must do it responsibly and without being misleading,” he said. “An undue emphasis on past returns can lead to consumers having unrealistic expectations and making poor investment decisions.”

Included in the changes is a requirement for companies using past performance figures having to include a five-year return figure – and no fine print.

ASIC says returns should be calculated after all ongoing fees have been deducted and “simulated” past performance figures should only be used in very limited cases.