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On Tuesday afternoon, Sesame confirmed it was in advanced talks with Skandia about buying Bankhall and PMS.

Skandia acquired Bankhall in December 2001 as part of a £210m deal to buy UK financial services software company Lynx Group plc.

In May this year Skandia told Financial Adviser it had no plans to sell the IFA support services provider. A spokesman for Skandia declined to comment on why it had now decided to sell the business.

Mr Martin said the acquisition of Bankhall and mortgage network PMS represented an excellent opportunity to create the leading distributor of financial adviser support services.

He said the two businesses combined would create the scale and breadth of service that Sesame and Bankhall see as critical success factors in supporting financial advisers in a post-retail distribution review world.

Mr Martin said it would be difficult to quantify how many advisers would be part of the new business, but he expected there would be 3000 advisers in the appointed representative proposition and 1,500 firms in the directly regulated services offering.

He said: "Once due diligence is completed we will need to put a binding offer in place upon which a contract could be agreed but at the moment that is some way away.

"It is our plan to retain the Bankhall brand as our directly regulated proposition. Bankhall is associated with a quality proposition to that sector and is the largest provider to those advisers.

"Clearly Sesame is well known for networks and the appointed representative proposition. It would be our intention therefore to keep the Sesame and mortgage networks under that umbrella. Likewise it would be our intention to keep PMS."

"We estimate last year distribution between Sesame and PMS accounted for £45bn of lending. It will be very clearly the leader in distribution of mortgages."

In terms of the timescale for any deal, Mr Martin said it could be weeks before any transaction was finalised.

Back in April, Bankhall shook up its management structure, freezing the chief executive position and appointing five of the IFA's board members to the helm.

The adviser support services provider began the search for a replacement for former chief executive Peter Mann, in October last year when he left to join Skandia.

Two months ago it was announced five of Bankhall's board members, David Golder, managing director of IFA services, Mike Gordon, non-executive chairman, Ron Baxter, non-executive director, David Rimmer, director of IT and e-commerce, and Darren Veevers, finance and operations director, would take on the responsibilities for each of their areas.

John Malone, managing director of Premier Mortgage Services, which is owned by Bankhall, remained in his position.

John Stewart, director of Essex-based PMI IFAs, said: "I guess it is not in the Skandia model anymore so it needs to move it on and get business elsewhere."

On Sesame Mr Stewart said: "It is going to be a mega network. It must be doing something right to be that size."