Advisers representing National Westminster and Barclays banks, the insurance giants Legal & General and Allied Dunbar, and the Woolwich Building Society are among those criticised for giving poor advice.
The Consumers' Association sent researchers to 30 banks, building societies, insurance company representatives and independent financial advisers. The researchers said they had lost their job and had received a pounds 25,000 lump sum. They had a credit-card debt approaching pounds 1,000 and pounds 1,500 in savings. They had no job lined up and wanted to keep their capital safe.
According to the association's magazine Which? the best advice would be to put the money into a savings account until the job situation was clear.
But advisers were quick to recommend bonds carrying large commission but exposing the consumer to possible losses.
'Of 28 advisers who made firm recommendations, no fewer than 19 recommended investment bonds or personal equity plans (PEPs).' PEPs also earn commission for advisers.
'Some of the advisers' statements were factually wrong, or misleading, such as assertions that investment bonds are tax- free and risk-free.'
A representative of NatWest in Hastings was among those who recommended bonds, along with representatives of the insurers Aegon, General Portfolio and Royal Life. Barclays in Northampton recommended a PEP, as did a Legal & General agent, NatWest in Hastings, and Woolwich Building Society in Northampton. Independent advisers were also criticised.
Although NatWest's Hastings representative was criticised, another adviser from the bank in Cardiff was praised for good advice. Overall, only one-third of advisers gave reasonable or good advice, the association said.
The Office of Fair Trading is to hold public hearings in the autumn as part of its review of the Consumer Credit Act, which controls the marketing of loans up to pounds 15,000. The hearings will be in London on 27 and 28 October and Leeds on 2 November.