Financial Services Minister Kelly O'Dwyer believes banking companies will have work to do to regain the public's trust after disturbing revelations at the royal commission.
Regulator ASIC has been investigating AMP, which the inquiry heard had been charging clients for advice they never received and then repeatedly lied to the Australian Securities and Investments Commission.
"Is it any wonder people that would be critical of those companies who have engaged in this sort of behaviour, absolutely not and it is for them to explain how they are going to regain the trust of their customers," Ms O'Dwyer told ABC radio on Thursday.
Former deputy prime minister Barnaby Joyce has admitted he was wrong to argue against a royal commission.
"What I have heard is so far is beyond disturbing," he tweeted.
Asked whether she was also wrong to rally against Labor's proposal for such a commission, Ms O'Dwyer said "it is right that we have a broad inquiry".
"The ALP had argued for a very narrow one," she said.
"We are hearing things that would mean that we have done the right thing in introducing a royal commission and we are looking forward the recommendations."
Treasurer Scott Morrison warned such behaviour as heard by the commission on AMP and looked into by ASIC could attract penalties including jail time.
In a statement ASIC said 'fees for no service' and false or misleading statements had been part of an investigation in which it had received many thousands of documents and resulted in 18 examinations of AMP staff.
