Cavanagh, a UK-based financial services firm which includes a private client arm, has announced that it is in takeover talks with an unidentified potential buyer.

The firm said in a statement the talks are “at an early stage” and will not necessarily result in an offer being made. A further announcement will be made in due course and for the moment shareholders are advised not to take any action in relation to their holdings, it continued.

Media reports have suggested that Rathbones is the mystery potential buyer due to the closeness of the two firms’ existing relationship; Cavanagh made the decision to outsource its discretionary investment management to Rathbones a few years ago.

Rathbones had not responded to enquiries from WealthBriefing on the matter at the time of publication.

The UK IFA industry is currently going through a round of consolidation following the turmoil of the financial crisis a couple of years ago. A number of factors are prompting IFAs to merge with larger players, such as increased regulatory costs forcing them to seek economies of scale.