Nearly half of people who have consulted a financial adviser were unaware they were paying for the service, according to City watchdogs.
A survey of more than 2,000 people for the Financial Services Authority found that 49 per cent of those who had received advice were unaware they faced a potentially hefty fee through commission payments to their adviser after buying a financial product.
Just under a third (29 per cent) of UK consumers surveyed understood that they would pay a fee for financial advice, while a third (33 per cent) who do not currently receive financial advice thought that it came free.
The survey was carried out a matter of days before the practice of charging customers through commission is due to be outlawed under the regulator's Retail Distribution Review (RDR) in what will be the most far-reaching reform to the way financial services are sold in a generation. It comes into force on 1 January.
Under the reforms financial sales people will have to agree a fee in advance with their clients after a fact-finding process, although consumers will be able to pay over time through any financial product they buy for the advice they receive if they cannot afford a high upfront charge.
Watchdogs hope the change will eliminate a widespread misconception that "advice" comes free and encourage consumers to shop around for better prices.
The FSA said: "In response to the survey's finding the FSA has put the record straight by pointing out that advice has never been free. Consumers have always paid for the advice they receive, but they often didn't understand the mechanism through which they paid for it."
Watchdogs have been concerned that advisers have in the past used payments through commission to steer customers to products which paid them the most, rather than what was in the best interests of clients.
It has been feared that the policy of chasing sales and paying "advisers" through commission linked to those sales has played a role in a string of scandals, including the mis-selling of personal pensions, endowment mortgages and split capital investment trusts by financial advisers.
Industry reaction to the changes has been mixed. Phil Loney, chief executive of the mutual insurer Royal London, said he welcomed RDR but added: "I am worried that under the current legislative framework it is difficult for the consumer to get access to financial advice."
Financial advisers will be banned at the end of the year from gaining commission from sales of investments but the bar doesn't apply to insurance.