Financial advisors who are procrastinating when it comes to planning for their retirement should start by trying to envision their firms without them, says Chris Munafo, director of Private Client Group Administration for Janney Montgomery Scott LLC.

Before advisors can retire, they need to decide what they want the firm to look like after they are gone, who they want to take over and how they will assure clients are taken care of, says Munafo, senior vice president and director of private client group administration at Janney.

Although the numbers are improving, a recent report by FA Insight says 56 percent of the owners of advisory firms do not have a plan for transition. This is at a time when the average age of advisory firm owners and their lead advisors is more than 50 years.

Janney, a wealth management, financial services and investment banking firm headquartered in Philadelphia, helps advisors position themselves for retirement and for transitioning their firms to the next generation.

“Financial advisors have to be mentally prepared for retirement. Their clients have become their friends and it is difficult to back away,” says Munafo.

“Advisors need to bring in new people who they can mold in their own image to take over,” he says. “They also can bring a new person into a small shop to create a team approach for clients. Then they can bring in a third person to expand the team.”

Advisors should consider their own retirement and their business transitions as separate actions. They can set up a cash flow from the business to fund retirement over a long period of time for themselves. Then they can bring in new people to take responsibility for clients and make sure they are taken care of through the transition, Munafo says.

Because of the number of firms that will be transitioning in the next decade, the industry may end up with fewer small firms. “There will not be as many sole practitioners and there will be more assets managed by teams,” he says.