In some cases system errors were to blame but the inquiry heard AMP did not tell ASIC about the deliberate decision to keep charging the fees. Regan, who found problems of governance and oversight when he became head of AMP's advice businesses in January 2017, apologised for the issues.
"On behalf of AMP I apologise unreservedly for the failings in respect of advice and service delivery to our customers and for the regulatory breaches," he said in a statement to the inquiry.
AMP and the nation's big four banks have paid almost A$219 million ($231m) in compensation to more than 310,000 financial advice customers charged fees for no service. The problem, the banking royal commission heard, had occurred since 2009.
Senior counsel assisting the commission Michael Hodge QC said there was a significant delay in notifying the regulator about the issue and AMP made a number of false or misleading statements to the Australian Securities and Investments Commission about it.
AMP's group executive for advice Jack Regan accepted that was the case.
The inquiry heard AMP made a deliberate decision to continue charging fees to a group of "orphan" clients for three months when they went into a central pool, despite them receiving no advice services and legal advice that it was unlawful.
"It's not a surprise that it's not lawful," Regan told the royal commission on Monday.
Hodge asked: "It's just obvious isn't it that you can't charge somebody for 90 days for providing services that you're not going to provide, you agree with that?" Mr Regan replied: "That's correct."
Hodge also questioned if AMP in fact accepted it had made regulatory breaches, given its submissions to the commission only referred to possible misconduct. AMP has repaid A$3.69m to 14,000 clients who were charged the fees while in the central pool.
The Commonwealth Bank will also be grilled about its fee for no service issues involving its subsidiaries Commonwealth Financial Planning and Count Financial Planning.
Senior counsel assisting the commission Rowena Orr QC said often clients received no service or did not receive the service they were entitled to, yet ongoing fees continued to be deducted from their investments.
Commonwealth Financial Planning and another CBA subsidiary BW Financial Advice are paying A$88.6m in compensation to 31,500 customers who did not receive an annual review as part of their financial advice service package.
CBA CEO Matt Comyn apologised to customers on Friday, saying it was unacceptable
The Commonwealth Bank has paid A$117.8m in compensation over fees for no service, the bulk of the total amount forked out by the big four banks and AMP.
ASIC deputy chair Peter Kell said eight financial services entities had reported breaches to the regulator over fees for no service.
"I think it's clear from our experience that the firms in question prioritised fee revenue from their advice businesses over the provision of services to the clients," Kell told the royal commission.
Overall Australians have received more than A$380m in compensation over the past decade after suffering financial loss as a result of poor financial advice.
Kell said 90 per cent of financial advice for establishing self-managed superannuation funds did not comply with duties to act in consumers' best interests.
