The declaration of default on the Newport firm opens the door to ex-clients with valid claims to seek compensation of up to £85,000 per claim, the FSCS maximum.

The FSCS launched an investigation into Niche in 2023 after the firm stopped trading and went into liquidation in May last year.

So far the FSCS has received 175 claims against Niche, with one claim having been upheld - triggering the default. The compensation body confirmed it had received complaints against Niche linked to the British Steel Pension Scheme (BSPS).

Some 49 claims against the firm have been rejected by the FSCS which said the claims were rejected mainly due to the claims being calculated as producing no financial loss. The remainder of claims are in progress.

According to the FCA register, Niche was registered in September 2007 and authorised from November 2007. It also traded under the name Niche IFA until February 2019 when it began also trading under the name Niche Pension Specialists.

Its executive director and chairman is high profile financial adviser and entrepreneur Ray Adams, a Chartered Financial Planner who was previously an investment adviser at Quilter Wealth between 2005 and 2007 and before that worked at Wesleyan Assurance Society.

In December the FSCS declared six advice and pension firms in default, with an additional two firms under investigation.

Some 40 financial advice firms hit by BSPS claims have so far failed with a further seven under investigation, latest FSCS data shows.

Claims relating to the 40 advice firms are now being handled by the FSCS. Total compensation costs are expected to run into the millions.

Many advisers connected to BSPS failed firms have been banned or fined or both.

BSPS claims arise from members of the British Steel Pension Scheme who were advised by the advice firms to transfer their pensions to another provider. In many cases the advice was poor or misleading, the FCA has said.

The FSCS said earlier this month that it planned to increase its workforce by about 25% by 2025 to cope with a surge in complex cases. The compensation body's headcount will rise from 254 to 321 with the recruitment of 67 new staff.

The FSCS said earlier this month that a rise in complex cases meant it needed more in-house experts to deal with cases that will include SIPPs, investments and pension transfers. Cases in these areas have grown considerably in the past few years.