The Association of British Insurers and the Investment Management Association have agreed a merger deal that will lead to the creation of a new body.
The agreement is to merge the investment activities of the ABI with the IMA.
The deal between the two organisations' boards has been announced this morning, although it has yet to be finalised.
The deal, agreed in principle, will lead to a newly-named organisation with a new chairman.
Discussions are at the latter stages and are ongoing.
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In a joint statement the two bodies said: "The Boards of the Association of British Insurers and the Investment Management Association have agreed in principle to merge the investment activities of the ABI, including the Institutional Voting Information Service, with the IMA.
"The final stages of the discussion are still ongoing, and will result in the creation of an organisation, with a new name and a new chairman, that covers the full spectrum of investment management activity with a single, stronger and more coherent voice.
"The ABI will continue to represent insurers as asset owners."
Gina Miller, founder of SCM Private and the True and Fair Campaign gave a scathing assessment of the agreement, saying: “This merger could be extremely dangerous for British savers and investors, potentially creating an anti-consumer giant that will have a louder lobbying voice and deeper pockets.
“This merger smells like it has been borne out of desperation as the public and regulatory mood changes towards greater transparency, total cost disclosure and the eradication of practices that have allowed IMA and ABI members to pickpocket savers and investors.
"If the IMA and ABI are serious about restoring trust in financial services and driving consumer protection and transparency, this new body needs to act decisively and immediately end the fiasco of hidden costs and charges."
The Investment Management Association's members manage over £4.5 trillion of assets on behalf of UK and overseas clients.
The ABI, formed in 1985, has almost 300 member companies, accounting for 90% of the UK insurance market and its members are major tax contributors, paying £10.4 billion in the 2010 / 2011 tax year.