The alliance will attribute a valuation of close to £600m to S&W, a market source said this weekend, and will involve issuing Rathbones shares to its target's investors.
A deal is expected to be announced within weeks, according to insiders, although they warned that it could be delayed.
If completed, it would be among the City's most significant transactions so far this year, coming at a time of shifting regulation for wealth managers and bringing together two companies employing roughly 3000 people in total.
Combining the two businesses would give Rathbones access to S&W's network of specialist tax and financial advisers at a time when clients are seeking increasingly sophisticated services from wealth management firms.
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