Five-strong Abel Hadden and Company will close its doors to business on 31 December.
The agency, which specialises in strategic PR and issues management, currently has clients on its books, such as Diageo's classic malts portfolio and the National Greyhound Racing Club.
But agency partner Patrick Roberts said the last year had been 'exhausting' and that the current outlook for new business was gloomy: 'We couldn't bank on enough income going forward to allow us to gamble on having enough to cover our overheads.
'We have always traded in the black and didn't want to take the risk of going into the red.'
Roberts, who acted as Hadden's deputy MD at Edelman, added they are hoping to continue working with existing clients after the agency's closure.
He confirmed that he is in discussions about future roles.
Hadden has not ruled out looking further afield for his next venture.
Roberts said: 'Abel has an open mind - he will wind down the company professionally and then review his options.'