Corporate regulator ASIC has again come under fire from politicians and consumer advocates over its regulation of financial planners.

Members of a parliamentary joint committee have criticised the Australian Securities & Investments Commission for not permanently banning a Victorian financial planner who sold his clients forestry investments that failed.

ASIC deputy chairman Peter Kell was grilled by Senator John Williams over why WA financial planner Stuart Jamieson was banned by the Financial Planning Association, whereas ASIC was still conducting an inquiry.

Senator Williams said ASIC was undertaking too many investigations, which were taking too long.

"This is the problem, Mr Kell, you have too many ongoing investigations," Senator Williams told the committee.

"One organisation can ban them in four weeks and report it to the detectives, and yours seem forever ongoing."

In June, ASIC was found wanting by a Senate inquiry and accused of ignoring whistleblower warnings about a financial planning scandal at the Commonwealth Bank.

ASIC chairman Greg Medcraft told Friday's hearing that ASIC had sought specialist advice on managing the expectations of whistleblowers and would assign one officer to deal with each whistleblower through the process.

"We encourage whistleblowers," he told the committee.

Mr Medcraft said ASIC would soon release a strategic outlook that would set out key market risks, and how ASIC would tackle the problems.

"ASIC is particularly conscious of the community expectation that we take strong and swift action where the law is broken and investor funds are at risk," he said in his opening statement to the committee.

Labor senator Deborah O'Neill, asked why ASIC had only banned Victorian financial adviser, Peter Holt, for three years instead of banning him permanently.

She said Mr Holt's firm was the biggest seller of collapsed agribusiness schemes run by Great Southern and Timbercorp that left investors billions of dollars out of pocket.

ASIC said Mr Holt was banned for giving inappropriate advice to clients.

Liberal MP Tony Smith asked the ASIC officials what financial advisers would have to do to get a life ban.

Mr Medcraft said banned financial advisers had the right to appeal to the Administrative Appeals Tribunal and ASIC took that into account when considering the length of any ban.

"It's a right [to have a financial planning licence], it's not a privilege, and often what we see is when the AAT looks at this thing, they also look at the person's right to earn a living and do this business and they balance that with the consumer detriment," he told the committee.

ASIC says it lacks resources to closely monitor financial planners

Mr Kell said ASIC was unable to stop Mr Holt working as an accountant.

Senator Williams was unhappy with the situation.

"He's supposed to be bankrupt but still driving a big Mercedes, still operates his business and is in partnership and still lives in his sprawling home," he said.

"It's very concerning isn't it?"

ASIC says it has just 20 officers to monitor 50,000 financial planners.

Budget cuts and efficiency drives have seen 200 staff go this year, leaving about 1,550 staff. Another 100 people will lose their jobs next year.

Consumer advocate Denise Brailey said ASIC's performance had not been good enough, and said it should be stripped of its consumer protection role.

"Quite frankly, ASIC has done such an abysmal job that a royal commission into the whole sector is definitely, urgently required," she told the ABC in an interview.

"We believe that all consumer protection should be taken out of the hands of ASIC."

ASIC has also revealed that Greg Medcraft spent nearly $83,000 in the first half of the year attending meetings of IOSCO, the international securities regulator, of which he is the chairman.