AMP has conceded it failed to properly educate its financial advisers that they needed to actually provide services in exchange for the fees they charged.

Australia's largest wealth manager's policies and procedures were previously not appropriate and fit for purpose, its acting CEO Mike Wilkins said.

They have been tightened up as AMP deals with the fallout of a fees-for-no-service scandal that led to the departure of its CEO and chair in April.

Mr Wilkins faced questions at the banking royal commission over why AMP would have to tell its advisers that if they charged a fee for a service, they had to provide the service.

"It would be a normal expectation that people would understand that," he said.

AMP switched from commissions to fees for service in 2010.

Asked how a culture can develop within an advice business where anybody thinks it is okay to charge money for a service and not provide it, Mr Wilkins did not have an answer.

But, drawing on his 30 years' experience in financial services, Mr Wilkins did have a view on what has gone wrong in AMP in terms of its culture and the ability of its employees to know what is right and wrong.

"I think part of the issue has been the lack of clarity around what is acceptable, the lack of consequences that come from inappropriate behaviour, but that has been compounded by an underinvestment AMP has made in its risk and compliance and governance systems, which we're attempting to address now."

Mr Wilkins said AMP, like the industry, underestimated the scale of its fees-for-no-service issue when it was discovered in 2016.

AMP has estimated it will cost $778 million to complete the remediation program for clients given inappropriate advice or charged fees for no service.

It expects to pay $440 million to clients, mostly for fees for no service, but is still reviewing the files of more than 217,000 customers.

Mr Wilkins will briefly appear again in the royal commission witness box on Wednesday before ANZ CEO Shayne Elliott gives evidence.