The firm was ordered to cease all marketing activity in relation to its ISA and bond by the FCA in December.

LCF was the issuer of mini-bonds which were used for the purposes of making loans to corporate borrowers to provide those borrowers with capital for further investment.

The issuing of mini-bonds does not normally involve the carrying on of an FCA regulated activity so bondholders are unlikely to be able to claim from the FSCS.

LCF did not need to be authorised by the FCA to issue the mini-bonds but did need to be authorised to issue the promotion of them.

Investors in LCF’s mini-bonds were retail clients who were UK taxpayers and who fall into the category of either High Net Worth Individuals, Sophisticated Individuals, Self Certified Sophisticated Individuals or Restricted Investors, as noted on its website.

Finbarr O’Connell, Adam Stephens, Colin Hardman and Henry Shinners of Smith & Williamson LLP were appointed as joint administrators yesterday.

Mr O’Connell said: “It is early days, but our role will be to work with LCF’s borrowers, staff, the security trustee for the bondholders, the FCA and other stakeholders to ascertain what needs to be done in order to maximise the returns to the bondholders.

“We are especially focusing on the various loans made by the company to borrowers.

“At this juncture, regrettably we are not in a position to return any monies to bondholders.”

Mr Stephens said: “There are some 14,000 bondholders with LCF.

“We are working to ensure that they are all contacted directly and urgently so that they are aware of the situation.

“We have set up a dedicated call centre and email system.

“We would ask the bondholders to bear with us in these early days as there is much to do.”

Mr Hardman added: “We are working using existing LCF personnel, and gathering information relating to the loans LCF made to various borrowers.

“These loans to borrowers are the major asset of LCF and the administrators will do nothing to jeopardise the position of the borrowers and hence their ability to repay their debts to the company.”

One frequently asked question on the firm’s website read: “I purchased my bonds through a financial adviser. I have queries about the advice I received.”

The answer was listed as: “You should contact your financial adviser directly.”