Sounds like a poorly taught instructor to me. In a steep turn use back pressure to maintain your alt, using top rudder will simply put you out of balance.
Also as you increase BP just check your angle of bank. The aircraft may tend to roll in further and you'll loose more height which will make you apply more back pressure and the whole thing turns into a spiral descent if left unchecked!
I hope this instructor doesn't teach this same "technique" for Max Rate turns or someones gonna get themselves into a nasty spin and die one day.