The Financial Services Authority wants to stop the past performance of an investment fund being the main message of an ad. It also calls for details of charges to figure more prominently.
The IPA says the FSA is deluding itself if it thinks investors care about anything other than a fund's performance. It says investment fund charges vary little - often by no more than a quarter of 1 per cent - and are not the reason people choose one product over another.
Mark Lund, the chairman of the IPA's watchdog group, which monitors advertising controls, said: "These proposals give us serious cause for concern and the promotion of a lot of investment products would be affected by them."
IPA executives say it is nonsense for the FSA to compare claims about past performance of investment funds with car makers' speed claims.
In April, the FSA unveiled plans for beefing up the rules that govern the retail financial services sector, which spent £1.4 billion on advertising and promotion last year.