The FSA says clear information should always be provided
Delays were suffered in more than 60% of cases as people transferred providers when turning their pension into a retirement income.
The review by city watchdogs found that the complexity of the process and the forms required were the main reasons for the delay.
The Financial Services Authority (FSA) looked at 238 annuity transfer cases.
It also called for clearer information to be given to pension customers about shopping around for annuities.
The FSA said that more than 60% of 55 annuity firms provided clear information but that more could be done.
Shopping around for an annuity can boost pensioners' income but relatively few people take up the option.
The transfer process is complicated, with pension firms, intermediaries and customers all involved.
Sarah Wilson, of the FSA, said people could suffer financially if the transfer was not completed "in a timely way".
"Poor communications from insurers may result in people making poor decisions or failing to take any action to maximise their retirement income," she added.