"Each organisation has decided that in these difficult economic times it is important to focus all their attention on their own members' needs," ANZIIF and CII said in a joint statement.
The proposed merger of the two bodies was announced in October 2008, with members scheduled to vote on the proposal in the first quarter of 2009.
In December 2008, ANZIIF and CII agreed that considering current market turmoil the merger would distract from serving the needs of current members and they decided to put merger talks on hold.
At the same time, ANZIIF said it took strong exception to the suggestion by the CII in the UK press that there were "financial discrepancies" and question marks around ANZIIF's financial management.
"ANZIIF has always been fully transparent with board, members, regulators and auditors in all of its financial affairs," ANZIIF said in a statement.
"With a growing membership base . and financial reserves of $6 million, ANZIIF has consistently adhered to strong financial management discipline.
"We will be devoting all of our energies to supporting our members' needs and to growing our business, products and services with quality and customer focus at the centre of our attention, as always."
ANZIIF achieved an operating surplus for the 2008 financial year and was optimistic about business growth and profitability in 2009 and beyond, an ANZIIF spokesperson said.
The merger of ANZIFF and CII would see the creation of the world's largest financial services association, with over 105,000 members across the world.
