Treasurer Scott Morrison says the revelations about AMP exposed at the banking royal commission are “deeply disturbing” and warned wrongdoers could face jail time.

The royal commission heard on Tuesday that AMP had been charging clients for advice they never received, while its staff had repeatedly lied to the Australian Securities and Investments Commission.

“I am very reassured by the fact that these matters were already being pursued by ASIC and will continue to be pursued by ASIC,” Mr Morrison told reporters in Sydney on Wednesday.

“This type of behaviour can attract penalties which include jail time. That’s how serious these things are.”

In a later statement, ASIC said ‘fees for no service’ and false or misleading statements have been part of an investigation in which it has received many thousands of documents and resulted in 18 examinations of AMP staff.

“ASIC is also ensuring that compensation is paid to impacted AMP clients,” it said.

It said all financial institutions needed to understand the importance of co-operating with the regulator and complying with the law when providing information to ASIC.

“Making false or misleading statements to ASIC can result in civil and criminal sanctions,” it said.

Mr Morrison said the AMP revelations shows the government was right to ensure the commission was a broader inquiry of the financial sector and didn’t just look at the banks as the opposition had wanted.

But Opposition Leader Bill Shorten said it was already clear Prime Minister Malcolm Turnbull owed Australians an apology.

“The royal commission is discovering criminal activity, but if the prime minister had his way there would be no royal commission, and none of this activity would have been discovered or exposed,” Mr Shorten told reporters in Townsville.

He said in only a few weeks the royal commission shows things have to change.

“We cannot continue with Australia’s major financial institutions behaving in the manner that has been exposed already in the royal commission.”

Shadow treasurer Chris Bowen said the government had spent two years saying a royal commission was not necessary before it was “dragged kicking and screaming” into a major backflip.

“It would be truly galling today for those victims of these scandals to see Scott Morrison try to take credit for calling a royal commission,” Mr Bowen said in a statement.

Labor’s finance spokesman Jim Chalmers dismissed the idea the investigation posed a sovereign risk for Australia.

“That term gets bandied around a lot. It’s very rarely appropriate in my view,” Dr Chalmers told reporters in Brisbane.

“If investment in Australia relies on the continuation of some of these horrible practices, then we’ve got a bigger problem.”