In a joint statement issued to members on Friday, the Irish Brokers Association and the Professional Insurance Brokers Association said merger terms could be agreed by Christmas. If successful, it would lead to a single body representing the interests of up to 1,200 financial intermediaries.

The statement said: "The council of IBA and the committee of PIBA have agreed to enter into formal discussions with a view to integrating the two associations into a new unified and powerful intermediary association.

Both associations have nominated their teams to complete an evaluation of the benefits of this for respective members. This process is expected to be completed by the end of the year."

A merger would require 75% approval by members of both bodies. Although PIBA has the biggest membership - 850 compared with the IBA's 440 - the IBA has tended to yield the most influence.

This is because PIBA draws its membership largely from small and medium-sized life insurance and mortgage brokers, while IBA is dominated by the big corporate brokers.

It is understood that balancing the conflicting interests of these two blocks, especially the degree of influence the big corporate brokers would have in a merged body, proved to be a big stumbling block to previous merger attempts.

Financial intermediaries have faced much tougher regulation since the Financial Regulator took over policing of the sector in 2004.