The Financial Services Compensation Scheme (FSCS) is to compensate 2,000 customers of a failed mini bond firm.

London-based Independent Portfolio Managers Limited (IPM) has become the latest firm to fail after it was declared in default on 3 December.

The news came after a long-running dispute between IPM and its customers, which saw investors lose millions from the failure of two mini bonds that the firm had promoted.

FSCS says many of the customers still have outstanding complaints with IPM and the Financial Ombudsman Service.

Jimmy Barber, chief operating officer at FSCS, said: “We estimate that potentially 2,000 UK customers may be affected by the failure of IPM.

“However, the value of potential negligence claims is still unknown.

“We encourage all former IPM customers who think they might be entitled to compensation to make a claim on our website right away.”