The investment watchdog is investigating the financial advice arm of National Australian Bank after the bank confessed to making secret compensation payments.
NAB Wealth admitted last week it had quietly paid as much as $15 million to 750 customers during the past five years because their advice "didn't get it right the first time".
Australian Securities and Investments Commission chairman Greg Medcraft said information gathering from NAB has began and the bank has promised whatever co-operation is needed.
Mr Medcraft told a Senate estimates hearing that ASIC has set up a specialist wealth project to focus on the large advice entities.
These include the big four banks - NAB, ANZ, Commonwealth Bank and Westpac - along with Macquarie and AMP.
Mr Medcraft said he has warned for sometime that the financial advice industry is a high risk sector.
He said ASIC has highlighted the poor quality of advice and problems created by the conflicts of interest and poor culture at a number of Senate inquiries.
"Standards need to be significantly lifted if trust and confidence is to be restored for Australians," Mr Medcraft said.
"Clearly the time for action by those that can make a change is there."
ASIC will have a financial advisers register set up in March.
Nationals senator John Williams said the registry will be a mockery if an adviser gets sacked from one business and goes down the road and sets up in another firm.
ASIC deputy chairman Peter Kell disagreed, saying the registry will help considerably to track advisers if they move through the industry.
"It is going to be much easier for us to find out where they have gone and whether subsequent action is required," he said.
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