Misleading financial advertisements that bury detail in the small print are to be targeted by the City watchdog.

People may have unrealistic expectations about returns on their investments because of such advertising, the Financial Services Authority (FSA) said.

The FSA wants the balance to be redressed between the emphasis given to product benefits and drawbacks.

It aims set up a hotline for people to report on misleading advertisements by the summer.

The FSA is concerned that important information is going unread by consumers because it is in the small print.

While it says the majority of firms abide by the spirit of the law, the regulator wants to raise public awareness of the standards it sets for advertising.

Realistic appraisal

The regulator is consulting on proposals to strengthen the current rules on the way firms use past performance figures in adverts.

It proposes these figures should be presented in a way that links it with the future performance of a product.

The watchdog added that warnings about past performance should be included in the main text of the advert, not buried in the small print.

Adverts for bond funds should include information on both annual income and long-term income, including losses and gains to the capital invested.

"Our proposals on past performance are designed to ensure that such figures are not viewed in isolation but considered alongside other important factors, such as flexibility, charges and investment strategy," said the FSA's consumer director Christine Farnish.

Last year financial services firms spent �1.4bn on advertising and promotions, reaching 38 million consumers by television, 38 million by post and 27 million through newspaper adverts.