The financial advisory business, squeezed by rising costs and a shortage of young talent, may be on the verge of a merger and acquisition boom, according to one of the industry’s practice management gurus.

Advisors across the nation are gearing up to sell or merge their firms to achieve economies of scale to keep their practices viable, said Mark Tibergien, CEO of Pershing Advisor Solutions.

“It is happening,” he said in an interview at Pershing’s Insite 2014 conference in Hollywood, Fla. “There are probably more discussions about mergers than any time I’ve seen in my four years around this business.”

Several factors are driving the activity, including continually rising costs, the aging of the advisory field and the basic desire by owners to grow their businesses, Tibergien said.

It adds up to a lot of pressure that will inevitably lead to the transition of many firms, he said.

“One way or another, it has to happen,” Tibergien said. “With [advisors’] average age as high as it is, the clock is ticking. Voluntarily or involuntarily, their business will change hands.”

Costs have been especially burdensome, with studies indicating that compliance, technology, rents and other costs are eating up about 45 percent of advisor revenues, he said, up from a norm of about 35 percent.

While the bull market has allowed advisors to grow by an average of 7 percent to 8 percent per year by merely being in the market, Tibergien estimates that the average advisor needs to grow revenues by 10 percent to 12 percent to keep up with cost increases.

That leaves advisors, particularly sole practitioners, in a tough spot, having to decide whether to cut costs, expand operations or lower fees, among other possible strategic changes.

“Practices under $1 million are really experiencing the strain because you’re not at a level of critical mass yet,” he said. “Critical mass these days, depending upon where you are, is at least $5 million.”

In some large markets, such as New York City, the critical mass is $10 million, he said.

Simple demographics are also driving the merger talk. The average financial advisor in the U.S. is in his or her 50s, a time when they would be expected to lay plans to transition their practices, he notes.

At the same time, trillions of dollars in wealth is transitioning over to a younger client base that, according to various studies, is more inclined to work with younger advisors.

Clients are commonly about the same age as their advisors or older rather than younger, Tibergien added.

“They want people who can relate to where they are,” he said, “not another father or mother figure.”

That means advisors need to bring on younger advisors and work as a team to go after inheritors and creators of wealth under the age of 45, Tibergien said. It’s a key to growth because the data indicates people under 45 hold as much in investable assets as those who are older.

The entire industry is struggling with this demographic shift in wealth, he added, because advisors have been focused on baby boomers for so many years.

“This is a business fundamentally built for and by boomers,” he said. “But it’s not an infinite asset. It’s a depleting oil well.”

There’s been a lot of talk about how advisors need to embrace social media to reach out to these young clients, but Tibergien said older advisors need to do more than set up a Twitter account if they want to thrive.

“Technology has a role, but it’s one that abets the way you do business rather than defines the way you do business,” he said.