The Financial Services Compensation Scheme has opened an investigation into Surrey adviser firm Independently East Ltd (FRN488046) after the firm entered compulsory liquidation earlier this week.

The Official Receiver was appointed as liquidator of the firm following an application made by the FCA.

The liquidations comes after the firm failed to pay a £70,000 award to a client.

In a statement, the FSCS said the firm was being probed and the FSCS was accepting claims but these would not be passed to the claims team until the compensation body is certain the claims are eligible under its rules.

The FSCS said: “Although we're accepting claims against Independently East Ltd, they will not be immediately passed to our claims processing teams for assessment. We need to first establish whether the claims are eligible under our rules. We're currently investigating this and it may take some time."

The FSCS said as part of its investigation it will be working closely with the FCA and the Official Receiver.  

The FCA intervened earlier this week to order the compulsory liquidation of the IFA firm after placing restrictions on the firm earlier this year.

In February the FCA restricted business at the firm after it failed to pay a £70,000 Ombudsman award to a client.

The Official Receiver was appointed this week as liquidator of the firm which is based in Walton-on-Thames in Surrey but was originally based in Kingston, Surrey.

The Official Receiver will wind up IEL for the benefit of its creditors and will be writing to creditors shortly to explain what that means and how to make a claim.

The FCA said it acted due to the failure of IEL to pay the Ombudsman award, concern about a lack of resources at IEL and failure of the firm to engage with the FCA in an “open and co-operative” way.

It said there was evidence that at least some of a client’s money, which should have been paid into a bond, was instead transferred into a personal account of a director. 

The FCA had placed a number of restrictions on the firm, including freezing its bank accounts and cancelling its permissions to carry out regulated activities.

Explaining its decision to order the compulsory liquidation of the firm, the FCA said: ”Following the issuing of the First Supervisory Notice to the firm on 13 February 2023, we remained concerned that the firm was not able to meet its debts as they fell due.”