Collapsed IFA RJ Temple looks set to be one of the biggest burdens that the Financial Services Compensation Scheme has faced since the failure of Independent Insurance two years ago.
General insurance broker Independent cost the FSCS £78.8m in 2002 and generated thousands of complaints from its policyholders.
RJ Temple was forced to fold in July, owing more than £1.5m to its creditors. The firm's advisers were sold on to Lighthouse but its liabilities were passed back to the FSCS.
RJ Temple was one of the biggest sellers of structured products in the UK and at its peak had a client base of more than 250,000.
The FSCS has received 100 complaints related to RJ Temple so far, referred on from the Financial Ombudsman Service, and expects a further 550 to 600 complaints through Temple liquidators KPMG.
This would bring the total of complaints to a higher level than received in the early stages of the Independent wind-up.
It will declare the firm in default by the end of the month opening the floodgates for more former clients to register complaints.
Simpsons of Brighton partner Andrew Merricks says: “I think there is a big problem still to come for the FSCS because many of these products are still to mature, particularly those related to Eurostoxx.”