WASHINGTON (CNN) - The Securities and Exchange Commission said Monday it has discovered that pension consultants -- who advise companies on pensions and 401(k) plans -- have serious conflicts of interest and may be giving out biased advice.

The SEC said its survey indicates that consultants who call themselves independent are often selling to both sides -- convincing companies to buy the services of money managers while selling software and consulting services to those same money managers.

Pension consultants are commonly employed by companies to help choose services and money management firms to manage their pension plans, including both traditional defined benefit plans and newer, defined contribution plans like 401(k)s.

The SEC surveyed only 24 firms out of about 1,700 firms offering pension consulting, but said the study proves a need for significant improvement in disclosure by pension consultants. Several of the firms surveyed were among the largest pension consultants.

Lori Richards, director of Compliance Inspections and Examinations at the SEC, said the agency was dismayed to learn that many pension consultants are not aware that under law, they have a fiduciary responsibility to their pension plan clients.

That responsibility means that pension plans should be aware that the pension consultants are often selling their services to the same money managers they are recommending to manage pension plans.

The result, says Richards, is that the pension plans are unaware of the potential conflicts of interest that may exist.

According to Richards, "They sell themselves as being objective or unbiased and independent. Those are important words and they have meaning, and they have meaning to the clients who are deciding to hire the pension consultant, so if a pension consultant says that it is any one of those things: independent, objective, unbiased, it must make sure that it is so."

In a report released Monday, the SEC disclosed that among the firms they surveyed, more than half of the pension consultants or their affiliates provided products and services to clients they advised about pensions as well as money managers and mutual funds on an ongoing basis.

The SEC found that a majority of the pension consultants have affiliations with money managers.

The SEC concluded that some of the relationships may exist as a way for money managers to "curry favor with the pension consultant" and thus get business from the pension plans that the consultants are advising. The pension plans were frequently unaware of such relationships.

The SEC would not say that it found specific examples of law breaking, but says it has referred several cases to the enforcement division of the SEC.

Richards says that proper disclosure by pension consultants to the pension plans they are advising will go a long way toward curing the conflicts of interest that the SEC investigation has uncovered so far.

Richards went on to say that many of the companies had not properly retained documents and e-mail related to their relationships with clients and money managers.

The SEC has also launched investigations against major stockbrokers in recent months. For more, click here.

-- from CNN Business News Senior Producer Scott Spoerry