London-based independent Lloyd’s broker Lonsdale Insurance Brokers Limited (FRN: 308425) has been declared in default by the Financial Services Compensation Scheme after being involved in the Blackmore mini-bond scandal, which saw investors lose £46m.
The FSCS, the industry-funded consumer safety net, said it has received 34 claims against the firm relating to investments advice, one which has been upheld triggering the default declaration last week.
The decision opens the door to ex-clients who have lost money to claim up to £85,000 per successful claim as the firm is unable to pay compensation itself.
Lonsdale placed commercial business, such as property and casualty, surety bonds, warranties and reinsurance, with insurance carriers on behalf of its clients.
The firm was first registered with the FCA in 2005, changing its name to Kerry London City Limited in 2006 and to Kerry Lonsdale Limited in 2007. In 2008 it reverted to the name Lonsdale Insurance Brokers Limited.
In more recent times the business got into trouble over a Capital Guarantee Scheme connected to investments in Blackmore Bond Plc.
Blackmore Bond was set up to invest money into UK property developments with the proceeds supposedly paying back the investors. Blackmore offered up to 10% per year in interest payments.
It was claimed the mini-bond was marketed to ordinary people although by law it should only have been offered to sophisticated investors.
In total Blackmore Bond took £46m from around 2,800 investors into 11 separate property developments. Around £9.3m was spent by Blackmore on marketing and management fees.
The bond collapsed in 2020 amid allegations of suspect sales tactics and inappropriate payments.
The Blackmore collapse led to the directors of Lonsdale concluding that it was insolvent, and insolvency practitioners Neil Bennett and Alex Cadwallader from Leonard Curtis were appointed as joint liquidators in July 2024.
In March 2025 the FSCS said it was aware of claims against Lonsdale that related to the Blackmore Bond Capital Guarantee Scheme.
In November it said it was open to claims for Lonsdale only involving the purchase of series 1 of the bonds issued by Blackmore Bond plc.
The FSCS said: “We understand claims are likely to relate to Lonsdale arranging the Capital Guarantee Scheme for series 1 bondholders. We lack evidence connecting Lonsdale to other tranches of the bonds and have been informed there was no connection. We're therefore unlikely to be able to uphold claims for Lonsdale from investors who invested in series 2 to 6 of the bonds.”
The FSCS is the industry-funded safety net which compensates consumers who have lost money when regulated financial services firms fail.