The head of the banking royal commission has slammed a Commonwealth Bank executive for failing to answer questions about the bank's practice of charging customers fees but not providing financial advice.

Commissioner Kenneth Hayne warned Marianne Perkovic, the head of the CBA's private bank, at least three times to answer questions from senior counsel assisting the commission Michael Hodge, QC as the hearing focused on misconduct involving financial institutions charging fees for financial advice not received.

"You will get on better if you listen to counsel's question — if you have to stop and think about the question do it — but listen to counsel's question and answer what you're asked," the commissioner said.

Mr Hayne also took issue with Ms Perkovic's non-answer regarding why it took the CBA two years to inform the corporate regulator, the Australian Securities & Investments Commission (ASIC), about the failure to provide an annual review to financial advice clients of Commonwealth Financial Planning who were paying for ongoing services (OGS).

"I'm trying to, yes, I'm trying to, um, sorry, I'm just trying to explain to you, in this two-year period before we actually identified that we actually had a problem with OGS, as to what we were solving for with the information that was in front of us in a broader context of the business," she said in response to a question from Mr Hodge.

"Ms Perkovic, I do not regard that as answering counsel's question. Please ask the question again," Mr Hayne said.

"I want you to listen to it and I want you to answer it directly as you can."

Michael Hodge QC became frustrated with Marianne Pervokic's repeated obfuscations in her answers regarding the memo. ( AAP: Julian Smith )

Internal memo outlined host of issues

The commission heard about an internal memo from April 2012, which outlined a series of problems including a failure to provide financial advice services to some clients, including 257 customers who were still paying fees even though they didn't have a financial planner.

The memo outlined a string of problems including inadequate controls in place to monitor and supervise financial advice clients.

Mr Hodge became frustrated with Ms Pervokic's repeated obfuscations in her answers regarding the memo.

"Do you really say that you didn't understand that there was a problem?" Mr Hodge asked.

"The memo was telling me that I needed to investigate," Ms Perkovic replied.

The commission was also told the CBA was warned, in an independent report, of the risk of major regulatory action because of its practice of overcharging and undercharging financial advice clients two years before the CBA reported the matter to the corporate regulator.

A July 2012 report by accounting firm Deloitte found CBA did not have the systems and monitoring in place to ensure clients were getting financial services they had paid for, clients were habitually charged services that were not provided and there were ad hoc systems in place to store data that could only be checked manually.

Sorry, this video has expired Michael Hodge QC asked Ms Perkovic about a damning memo that was left for two years before being reported to ASIC. ( ABC News )

Mr Hodge continued to mercilessly grill Ms Perkovic about the report.

"Is the explanation you want to offer as to why it took CBA more than two years to notify ASIC of its ongoing service fee problems that CBA's systems were so hopeless that it had no idea what was going on in its business?" he asked.

In a long-winded answer, Ms Pervokic agreed there were no systems and inadequate supervision and monitoring to pick up problems with financial advice.

Mr Hodge persisted: "But the answer to my question is 'yes' isn't it?" Mr Hodge said.

"Yes," Ms Perkovic agreed.

The report found 1,050 clients were overcharged at least $700,000 for advice they did not receive because their financial planners had left the business before 2012.

But the report noted 5,000 clients could have either been undercharged or overcharged to the tune of $4.3 million.

Ms Perkovic agreed with Mr Hayne that she did not doubt the findings of the Deloitte report.

The Deloitte report was presented to the CBA board in August 2012, two years before ASIC was told in July 2014 of the failure to provide services for fees paid.