It is thought James Hay no longer fits with Santander’s strategic direction.
The firm had around £10bn of Sipp and wrap funds under administration as of December 31, 2008.
Friends and Santander refuse to comment on a possible offer with industry sources suggesting James Hay could fetch around £50m.
In May, Friends Provident UK managing director Simon Clamp told Money Marketing the provider was considering a push into the individual Sipp market.
In February 2008, Friends scrapped plans to launch its own wrap as part of a move away from wealth management. Soon after Trevor Matthews was appointed chief executive. He was a strong advocate of wrap in his previous position as head of UK retail at Standard Life. Friends recently announced it was looking at an employee benefits wrap proposition.
Syndaxi Chartered Financial Planners managing director Rob Reid says the move would offer Friends immediate access to the wrap market. But he adds: “I have never been convinced that the James Hay platform is the finished article.”