A Consumer NZ investigation of financial advisers has found the advice being given was "scandalously poor".

The results appear to show that lessons have not been learned from the collapse of finance firms in this country and the global credit crunch.

Consumer NZ sent mystery shoppers to 33 financial advisers, from large institutions with in-house advisers and agents, sharebrokers and nationwide adviser chains to small standalone firms.

An expert panel assessed the quality of advice and information in the 17 plans it received.

Consumer NZ chief executive Sue Chetwin said only three out of 17 advisers produced plans that were rated "good" by the expert panel. The remaining 14 were rated as "disappointing" or were "rejected".

The industry was in serious need of reform, with current proposals "too little, too late", she said.

Issues found by the investigation included poor analysis, unclear costs, advisers portraying themselves as independent when they were not, high costs and bad products.

"We're concerned that skill levels are low and will remain low, unless competency standards are included as part of the adviser authorisation process due to come into force next year," Ms Chetwin said.

Of the 17 plans received, 10 were investment plans and seven were comprehensive pre-retirement plans.

The shoppers looking for pre-retirement plans had, or were likely to soon have, significant mortgages, other debts, bank deposits and other investments.

Most were in Kiwisaver schemes. They were looking for savings and expenditure budgets that would help them meet their short term goals and eventually provide a nest egg. Some also needed advice about insurance, wills and enduring powers of attorney.

Ms Chetwin said often they were told to invest too much in managed funds at a time when it was likely they would also have a large mortgage.

Most of the pre-retirement plans were of little practical help. Costs ranged from nothing to $1200. The average price was $784.

In eight out of the 10 investment plans shoppers were given no meaningful explanation as to why they should take up the recommended investment strategy. In seven out of the 10 plans the panel could not definitively work out the initial and ongoing costs of the advice.

"Shoppers were given conflicting information about service fees - and sometimes there was no information on costs. In half the investment plans, fund-management fees weren't adequately disclosed," Ms Chetwin said.

Too often advisers gave the impression they were knowledgeable about a range of investment products and might recommend any, but in the end shoppers were told to put most of their savings with one provider, and were given no explanation of why that provider was preferred.

Some of the "independent" investment plan advice cost more than $1200. The average cost was $549.

Unbiased advice would not become an industry norm until commissions were banned, Ms Chetwin said.

Higher standards of disclosure were an urgent priority.

It was inappropriate to allow the industry to have too large a say in long-overdue reforms.

"Self regulation clearly has not worked. It appears nothing has been learned from the bad press the financial advice industry has had over the past few years - it is still woefully wanting," Ms Chetwin said.

Consumer was pleased that next year's reforms would see the industry subject to a disputes resolution service.

The investigation involved 11 mystery shoppers, aged from the mid-30s to 80, who visited financial planners in Auckland, Wellington, Christchurch and Bay of Plenty.