The review focused on six major banks and building societies and assessed the quality of advice given to customers looking to invest a lump-sum.
The FSA found that 75 per cent of advice given was good but in 11 per cent of shops the customer was given unsuitable advice and in 15 per cent of branches the adviser did not seek enough evidence to ensure the sale was suitable.
Other problems were advisers recommending the wrong level of risk, recommending products which did not suit the customers' needs or products for a different length of time to how long the customer wanted to hold the investment.
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The FSA said, in response to the finding, firms had agreed to take action which included retraining advisers, making changes to the advice process and undertaking past business reviews.
However, one unnamed firm has been referred for enforcement action by the FSA.
Clive Adamson, director of supervision at the FSA, said: "Mystery shopping allows us to understand what customers experience when they purchase financial products. This review shows that customers are not consistently getting the quality of advice on their investments that they should expect when visiting an adviser in a bank or building society.
"Whilst we are disappointed by the results of the review, we are encouraged by the actions that firms involved have taken to rectify the situation for their customers."
He said the Financial Conduct Authority, which will come into effect in April, would be conducting more of these exercises as part of its "intrusive approach" to regulation.
Responding to the findings, a spokesperson for the British Bankers' Association, said: "We welcome this review which shows that the majority of clients received good advice from their banks, but clearly more can be done. Any examples of advisers failing to gather enough information on their customers and not recommending the right products are unacceptable. This review will help all banks to focus on retraining staff and changing processes to improve standards for customers in the future."
It pointed out the review was carried out prior to the RDR being implemented and that it expected to see a "real improvement" in the next review.

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