The compensation body has received seven claims against the firm so far.

The first claim has been upheld, triggering the default announcement. The remaining six claims are still in progress.

All claims are related to investment advice, including claims in relation to bonds and collective investment schemes.

Cavendish is one of eight linked businesses that the FCA has already said they believe to be a risk to consumers.

The other firms identified as connected by the FCA are Marvell Enterprises Ltd, Cottesmore Associate Ltd, Grosvenor Associates Ltd, Renaissance Advisory Ltd, Falcon Financial Solutions Ltd, Thestral Financial Services Ltd and Semantic Business Services Ltd.

The FSCS said consumers invested funds into ISAs, convertible bonds and loan notes issued by Cavendish.

The investments were made directly through Cavendish Incorporated, through its former appointed representative Cottesmore Associates Ltd and through Marvell Enterprises.

However, none of the companies was authorised by the FCA to provide regulated advice on investments.

In general, a business does not have to be regulated by the FCA to raise funds by issuing shares or debt securities (such as bonds or loan notes). However, any regulated activity carried out by a regulated firm in relation to bonds may give rise to a claim that the FSCS can consider.

Customers have alleged that Cavendish and/or Cottesmore gave unsuitable advice in connection with the investments.

The FSCS said it will now investigate claims against Cavendish and will investigate whether these claims are eligible for compensation under its rules.

As part of its investigations, the FSCS will be considering if Cavendish can meet claims made against it.