Designated investment business

This sub-scheme covers investment claims, for example, claims relating to financial advisers and investment firms.


FSCS is triggered when a firm authorised to advise on or arrange investments goes out of business, and is considered by FSCS to be unable, or likely to be unable, to pay claims made against it. This will generally be because the firm has stopped trading and has insufficient assets to meet claims, or is insolvent.

Once we are satisfied that a firm is unable, or likely to be unable, to pay claims against it, we declare the firm in default - this is the technical term we use for the firm failing. A declaration of default opens the way for the firm's customers to make a claim for compensation to us.

You can search our list of failed firms to see if a firm has already been declared in default by FSCS.


To qualify for compensation investors need to be eligible under our rules, which are made by the FCA and the PRA. We have a duty to our levy payers to ensure that we only pay compensation for eligible claims.

For investment claims FSCS provides protection, for example:

  • For loss arising from bad investment advice, poor investment management or misrepresentation.
  • When an authorised investment firm goes out of business and cannot return investments or money.

Investments covered include: stocks and shares; unit trusts; futures and options; personal pension plans; and long-term investments such as mortgage endowments.

FSCS conducts a full review of each claim to make sure it is eligible for compensation. For example, for negligence claims we will establish whether bad advice has been given and calculate whether the consumer has made a financial loss. If the advice is not found to have been unsuitable, or if no loss has been suffered, no compensation can be paid.

This work involves liaison with third parties, such as product providers and formerly authorised firms, to enable us to look at client files and other information relevant to determining whether a claim is eligible for compensation.

We also follow guidance provided by the regulator where applicable, for example in considering pensions review and mortgage endowment claims, and we liaise with the FOS on their approach to handling claims.

See our compensation limits