“They didn’t appreciate the advice that was maybe suitable before the crisis was not suitable during or after the crisis and they never changed the model portfolios as a result.”
Ms Melis said in some cases advisers were not aware clients had recently divorced or suffered a bereavement and their investment needs had therefore changed.
She added: “If you ask me, I think this is extremely pertinent today.”
Mr Brown at Bovill said the issue of resilience would be “critical” for advice companies in the wake of the pandemic.
He said: “Rather presciently, the Prudential Regulation Authority and FCA had already started a conversation on the subject before the Covid-19 crisis hit, and it is expected that they will return to the subject, with vigour, in light of the past six months.
“In advance of regulator action, firms should capture the learning from the current situation and consider how they can use it to better serve customers in the future.”
The issue of financial resilience among the companies it regulates also remains a hugely important factor for the regulator, and one it has shown to be eager to police amid the coronavirus crisis with the use of mandatory surveys sent to advisers.
Just last month Alex Roy, head of consumer distribution policy at the FCA, told FTAdviser’s Financial Advice Forum that ensuring companies remained financially stable remained a priority for the City watchdog.
It came as Mr Roy also confirmed the FCA was set to delay more work in response to the pandemic, after the regulator warned earlier this year it could be “months” before it managed to address its priorities.
John Coley, head of risk consulting in EMEA at Norton Rose Fulbright, said the pandemic had prompted businesses to rethink operational resilience with an increased emphasis on enhanced governance and oversight.
Mr Coley said: “Firms may see an increase in information requests from regulators so they will need to demonstrate that they have dynamic and robust systems and controls to mitigate changing and, in some cases, increasing compliance risks.
“With extended forbearance being offered to various segments of the market in some cases, it is not yet clear what the longer-term impacts may be.”
In April, the FCA relaxed its rules requiring advisers to inform a client if their portfolio drops by 10 per cent or more compared to its valuation at the beginning of the quarterly reporting period.
The flexible approach to the requirements under the Markets in Financial Instruments Directive II is in place until October and was welcomed by an industry striving to keep clients calm amid some of the biggest market falls seen in modern times.