Investment manager Rathbones has acquired financial planning business Saunderson House, as the wealth management industry continues to strike merger deals in a squeezed market.

The deal is the latest in a wealth management space that has been consolidating in recent years, as investment houses look to scale up to compete on technology, fund costs, and new product lines, as well as to deal with the rising tide of new regulation.

The £150m deal would make Rathbones the third-largest wealth manager in the UK, the firm said in a 23 June statement.

The buy brings Saunderson House’s £4.7bn in funds over to Rathbones, taking its total to £61bn, but also allows it to widen the financial advice as well as investment services it can give clients.

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Rathbones will be able to offer “a more holistic wealth management proposition to clients” in the wake of the deal, the firm said in a 23 June statement.

Fenchurch Advisory Partners advised Saunderson House on the deal. The broker has also been behind recent deal talks in the asset management sector including around Standard Life Aberdeen’s sale of its Parmenion platform, Bain Capital’s purchase of LV=, and Lloyds Banking Group mooted takeover of savings and investment group Embark.

The Rathbones buy is subject to approval by the FCA and is expected to complete in the third quarter of 2021.

Chief executive Paul Stockton said the deal would “add both scale and capability to Rathbones”.

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The firm’s statement added that the acquisition “delivers a meaningful growth opportunity in highly attractive market segments focused on high-net-worth professional clients”.

Rathbones failed in a bid to buy rival firm Smith & Williamson back in 2017. Smith & Williamson ended up tying up with another wealth manager, Tilney, instead, in a deal that completed last September.

There will be an employee incentives plan in order to retain key talent at Rathbones in the wake of the deal, worth up to £7.5m “based on achieving growth and operational targets” over the next three years.

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