The Financial Services Authority has pushed investment company Keydata into administration, after saying that it is insolvent and unable to meet its liabilities.
PricewaterhouseCoopers is now looking for a buyer for the fund manager's assets; there is a possibility that the firm could be liquidated as well.
The move has left Keydata's 85,000 customers facing uncertainty about their £700m of policies. It is still not clear whether they will lose money or not.
Keydata sells structured products through independent financial advisers, and provides administration services for financial institutions in London.
Investors' policies are effectively frozen until PwC has assessed the situation. The administrators need to establish whether customers' savings are protected from the rest of the business. Financial institutions with funds at Keydata will also be unable to access its cash.
Stewart Ford, the managing director, established Keydata Investment Services in 1997. It has three offices in London, Glasgow and Reading, and employs 100 people.
