The Financial Services Compensation Scheme has received 37 claims against an advice principal declared in default last month and is expecting further claims against a related firm, which defaulted last week.
The industry-funded lifeboat scheme declared advice firm NJ Associates Financial Services Limited in default on January 24 and revealed it has to date paid out £28,000 in compensation.
Earlier last week (February 11) related advice firm N.J. Associates defaulted also.
The two companies share key personnel and N.J. Associates previously acted as principal for advice company Pension Calculator Limited, which was embroiled in the debacle surrounding failed discretionary fund management firm Organic Investment Management.
The claims against NJ Associates Financial Services Limited and N.J. Associates with the FSCS involve self-invested personal pension complaints and those linked to mortgage endowments.
According to a statement of affairs published on Companies House in December, the FSCS is listed as a creditor for NJ Associates Financial Services for the amount of £219,000.
The lifeboat scheme has received 16 applications for compensation against N.J. Associates, but with the firm having only been declared in default last week an FSCS spokesperson said it was too early to determine how much compensation could be paid.
Organic Investment Management was told to cease all regulated activity by the Financial Conduct Authority in December last year amid concerns about illiquid and potentially high-risk investments in its model portfolios.
The company brought in administrators shortly after and the FSCS has already paid out more than £100,000 in compensation related to another advice firm which placed client capital with the failed discretionary fund manager.
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