At least 300 clients of the collapsed Coventry financial adviser BBB Network are expected to claim compensation now that the firm has been formally declared in default by the Financial Services Compensation Scheme.
BBB, formerly known as Berkeley Independent Advisers and Berkeley Financial Planning, was a subsidiary of Berkeley Berry Birch, a listed company that went into administration in March.
But it was only yesterday that the FSCS, the statutory fund of last resort for authorised financial services firms, was in a position to declare any of its subsidiaries in default.
To do this the FSCS must have received at least one claim and to satisfy itself that a firm is unable, or likely to be unable, to pay claims against it.
"There are more subsidiaries, but this is the biggest and the only one we have declared in default," a FSCS spokeswoman said.
BBB was not authorised to hold clients' money, so any claims against it will arise from losses caused by bad investment advice, negligent investment management, or fraud.
Under the Financial Services and Markets Act, the FSCS can pay 100 per cent of investment-related claims up to £30,000, then 90 per cent of the next £20,000.
So the most that any individual can receive is £48,000 of losses totalling £50,000 or more.
Loretta Minghella, chief executive of the FSCS, said "It is important for consumers to know that if they have had dealings with this firm and believe they have lost money as a result of negligent advice, they can contact us."
They can phone the scheme on 020-7892-7300.
For investment claims, the FSCS's compensation aims to put investors back into the position where they would have been if they had not invested.