The investors backed funds managed by Stirling Mortimer, which were unregulated and invested in the development of overseas property in places such as Spain and Cape Verde.
British financial advisers sold the funds to investors who poured £91m into them, invested mainly via their self-invested personal pensions.
But a series of hits, ranging from fraud by one of Stirling Mortimer’s lawyers to allegations of mis-management and the impact of a downturn in the global property market following the financial crisis, meant investors saw their capital largely disappear.
But unlike in the case of other similar schemes, the compensation body has refused to write down the value of the Stirling Mortimer funds to nil.
So investors have received compensation payouts of only around 20 per cent of the value of their investment, according to lawyers acting on their behalf.
Michael Cotter, solicitor advocate at FSLegal, said some of the group of eight investors he acts for are elderly, and fear they will not live to receive a full compensation payout.
He has now written to the FSCS demanding an update on his clients’ case.
“We strongly request the FSCS clarifies the situation,” Mr Cotter told FTAdviser, “and put to bed these people’s hardships”.
A decision on his clients’ case would have widespread repercussions for all of the other hundreds of Stirling Mortimer investors, he added.
The Serious Fraud Office is currently investigating three Stirling Mortimer funds - the No 4 Cape Verde fund, No 6 Morocco fund and No 7 Cape Verde II fund.
The FSCS decided advisers can be held liable for any losses suffered by customers in relation to those three Stirling Mortimer funds back in 2015.
This means the cost for compensating investors in the funds will ultimately be paid for by financial advisers via levies.
The FSCS has been approached for comment.