Many high street banks and building societies are offering poor advice and recommending inappropriate investments, an undercover investigation from lobby group Which? concludes today.
Researchers, who were all experienced investors aged over 60, found that only five out of 37 advisers in banks and building societies gave what it termed "good advice", while the majority of advisers showed a poor understanding of the risks and made misleading statements.
Which? found that 17 recommended complicated and high-charging investment bonds, with four of the advisers failing to mention that these came with hefty exit fees, sometimes as high as 12%, to release money in the first five years.
Eighteen of the advisers claimed there was no cost for their advice, although banks and building societies make money through commission paid for the products they recommend, Which? says.
The researchers posed as retired savers and told advisers they had a lump sum they were looking to reinvest.
To give good advice, advisers needed to make it clear whose products they could recommend, explain fees and charges and the products and their risk and establish the researcher's attitude to risk, among other requirements.
Richard Lloyd, Which? executive director, says: "Now more than ever, consumers need advice they can trust on what to do with their money.
"It's shocking to see such low standards."
Which? says it is reporting its findings to the Financial Services Authority and urging the regulator to investigate.
It tested six independent financial advisers and found that four gave good advice to researchers.
"Our investigation shows that the high street isn't the best place to go for investment advice," says Lloyd. "If in doubt, consumers should always talk to an independent financial adviser."