It emerged last week that Rathbones was close to agreeing the formal terms of a £2bn deal, giving S&W nearly a £600m valuation.
However, today the firm announced that the merger had collapsed. In a statement, S&W said, “Following our growth and business development in recent years, the board had agreed to prepare the company for a potential stock market listing.
“While we were pursuing this course, we were approached by Rathbones.
“After careful consideration, we have been unable to reach agreement on terms which would be in the best interests of all our stakeholders.”
It was also reported this week that Tilney Bestinvest had made a late bid to hijack Rathbones' proposed deal, but this was denied by an S&W spokesperson.
S&W, the UK’s eighth largest firm by fee income, reported double-digit rises in its operating income and adjusted operating profit thanks to significant growth in its tax, investment management, banking and business services divisions this year.
Its operating profit also rose 22% to £17.7m, with profits in investment management and banking rising 21% and its tax and business services more than doubling from £1m to £2.4m. S&W manages more than £19bn for clients.