The Financial Services Compensation Scheme has confirmed that it is preparing for the voluntary liquidation of Active Wealth (UK) Ltd, one of the nine advisory firms involved in British Steel Pension Scheme pension transfers.

The firm is in creditors’ voluntary liquidation, says the FSCS which is now “preparing” to declare the firm in default. If, and once, the firm is declared in default it is expected that the FSCS will deal with any claims.

The investor compensation body says it is working closely with the Financial Conduct Authority to “understand” the firm’s position.

According to the FCA register, the firm is run by Darren Antony Reynolds from an address in Gipsy Lane, Willenhall, West Midlands. The firm was registered from September 2014. The FCA says that while the firm is now in liquidation it remains authorised. It has stopped taking on new business but it has to continue to meet the FCA's standards in dealing with customers, the register states.

If a default is declared it will mean the firm is unable to pay claims for compensation made against it. This will then pave the way for customers of the firm to make a claim to the FSCS whose funding mostly comes from levies on industry firms.

Mark Neale, FSCS’s chief executive, said: “We are working as quickly as possible to provide some certainty for customers. We are preparing to start considering claims as soon as we receive them and will provide further updates on our website as more information becomes available.”

The FSCS has urged customers of the firm who believe they may have a claim to submit an application using the FSCS’s online claims service.

This week the influential Work & Pensions Committee urged the FCA to ban contingent fees on DB transfers following the BSPS pension transfer fiasco. The Work and Pensions Committee issued a report saying that, "another major mis-selling scandal is already erupting" on defined benefit pension transfers.