Just 47% of recommended defined benefit (DB) pension scheme transfers made since 2015 in the UK were suitable, according to research by the Financial Conduct Authority (FCA).
After reviewing 88 DB transfers over the last two years where advice was given to transfer, it remained unclear if 36% were appropriate, and was concluded that 17% were unsuitable.
This was found to be in stark contrast to the wider advisory market where 90% of pensions accumulation advice, and 91% of retirement income advice was deemed suitable.
"The starting point for anyone with a DB pension should be to assume it is best left as it is," Hargreaves Lansdown senior pension analyst, Nathan Long, said.
"These types of pension transfer are very complicated and require very specialist advice. If you want to investigate a transfer further seek out an experienced adviser."
The research shows that there were approximately 80,000 DB transfers that took place in the last year, with those exceeding £30,000 requiring advice.
It was found that many firms had designed processes and procedures that resulted in transfers where the suitability of advice could not be established.
This included companies failing to obtain enough information about clients' needs and personal circumstances, and not considering their objectives.
It was also found that some firms had not made adequate assessments of the risks clients were willing and able to take, while some failed to make appropriate comparisons between the DB and receiving schemes.
"These findings highlight the importance of the FCA's work around clarifying what is expected of those who advise on DB transfers," Pinsent Masons head of pensions, Carolyn Saunders, said.
"IFAs are at the sharp end of the recent explosion in transfer activity but others can also play a role in reducing the risk of unsuitable transfers by doing what they can to make sure that scheme members understand the value and importance of financial advice."
Since the start of 2016, 32 firms have chosen to stop providing advice or have decided to limit their pension transfer activity as a result of FCA assessments.