The best time to prepare for the future is now. Consider the following:

According to a 2009 benchmark study from Quantuvis Consulting Inc., 69% of financial advisors fall between the ages of 45 and 64, and among those, 14% intend to exit the industry in the next six years. Some 33% plan to leave in the next ten years. Another survey of financial professionals, the Moss Adams 2008 Financial Performance Study of Advisory Firms, revealed that only 25% of firms have a well-defined succession plan-and 44% have no plan at all.

These facts could have far-reaching implications. Advisors who make plans now to decide how they will both live and work in their 40s, 60s and 80s will typically adjust better to changes. And the early preparation for these transitions are best begun while the professionals are still in their 20s, not when they're getting ready to retire. Planning for a transition, however, is often not an urgent matter to advisors unless there is a crisis (if the president of the company has a heart attack, for example).

And yet it requires true leadership to prepare for these changes in advance. Such planning will not only yield greater value for practices, but also greater peace of mind for clients, family and colleagues and, ultimately, a more powerful legacy.

Let's look at some questions advisors can ask to better prepare for business transition.

Who's Buying?
When it comes to transitioning a book of clients or a business entity, the independent financial advisory industry is becoming more sophisticated. In the past, most practitioners were solo professionals with a book of clients, but as time passed, a higher percentage of practitioners became affiliated with multi-advisor firms. And as the number of practitioners affiliated with ensembles continues to grow, it is likely that ensemble companies will sell to their own members or sell to other ensembles.

The scale, of course, is tipped toward ensemble acquirers. So when planning for your transition, start by asking yourself: Where am I on the continuum?

How Many Are Buying?
As baby boomers age and more practices transition to a new owner, will the number of buyers decrease simply because of demographics? And if that happens, might values then go down because there are more practices for sale? It's hard to imagine today, given the real (though sometimes hyped) demand of those looking to buy.

Increased Selectivity Of Buyers
It is likely that buyers will become more selective about the books and practices they want to buy. In fact, regardless of the approach used to determine value, there is already a clear preference among buyers for firms with fewer clients, and a desire for offerings that present existing, recurring revenue. Expect buyers to become even more choosy.

Today, the partial sale of a book of small clients isn't particularly attractive. Many advisors pruning their businesses say they see long wait times before they can find buyers for the clients they are looking to sell. These are offerings that many buyers stay away from.