Having reviewed 164 mortgage sales between June 2011 and March 2013, FCA found that only two sales were up to the required standards.
FCA said in a statement: "Two reviews of sales from 2012 found that in over half the cases the suitability of the advice was not clear from the file or call recording."
The regulatory body observed that the companies did not consider customer’s budget prior to selling home loans.
They also failed to give suitable advice to customers over selection of mortgage term, thereby putting customers at risk.
FCA enforcement and financial crime director Tracey McDermott said: "Poor advice could cost someone their home so it’s vital that the advice process is fit for purpose.
"Both firms failed to ensure that their customers were getting the best advice for them.
"We made our concerns clear to the firms in November 2011 but it was almost a year later before the firms started to take proper steps to put things right. Where we raise concerns with firms we expect them to take effective action to resolve them without delay. This simply failed to happen in this case."
Meanwhile, the firms have decided to contact around 30,000 consumers, who received mortgage advice during that period, to listen to their concerns and resolve them.
Image: RBS sold £13.9bn worth of mortgages in 2012. Photo: courtesy of David Edgar.
