But it is at least something firm owners are starting to think about, partially because the industry has existed for a few decades now and many owners are pushing retirement age. Cassaday says that a succession plan is not only good business practice but also a competitive advantage. If potential clients know a plan is in place, they will believe the firm's principals have thought about the future and can provide business continuity in case of disruption.

Cassaday says he treats his employees, many of whom have worked for him for more than 15 years, like family and says he would not want to leave them unprepared if something happened to him. As Briggs knows, bad things can happen to even young planners who aren't planning on leaving the business.

Cassaday founded his firm in 1993 and now has 24 employees and more than $1 billion in assets under management. It took him two years to develop his own succession plan, but it is now firmly in place.

There are two questions to think about in developing a plan, he says: "What if you get hit by a bus and what happens when you are ready to retire? I wanted to make sure the firm could continue to function well without me and wanted to lay the groundwork for an elegant departure if I retired someday. I have worked to make myself obsolete so that the firm can operate without me if I am not around. This, coupled with a formal and binding arrangement for transfer of firm assets at my death means that we have covered all the bases."

To cover for the unexpected, he set up a life insurance policy on himself on which the other principal advisors in the business pay the premiums. If he dies, his wife will be compelled to sell to the other advisors in exchange for the insurance proceeds.

Although he says it is unlikely he will ever retire, Cassaday has laid the groundwork for monetizing his interest in the business if he does. To that end, he sold part of his firm to his top employees last summer.

"A sale to employees is the best choice for this for a variety of reasons," he says. He says the transition will be easy, and there will be no acclimation or cultural adjustments for the team. They will already be familiar with the company's systems and processes.

"My top advisors have been with me since they got out of college and know each other and each other's clients. We work collaboratively on investment management and financial planning to produce a uniform program deliverable to all clients, and we are largely interchangeable as a result."

Cassaday decided to sell a 10% interest in the firm to each of his top three advisors and gave them phantom stock for an additional 15% interest each. These phantom shares vest if the company is sold to a third party and are forfeited if an advisor leaves (the departing advisor's ownership stake is put back into the firm). These provisions, potentially equivalent to 75% of the business' equity, give advisors a reason to stay and make the firm more stable, ensuring continuity, he says.

It didn't take a lot of negotiation to decide what the business was worth, he says. Cassaday agreed to value it at six times earnings before interest, taxes, depreciation and amortization, which he believes is a low number considering the firm's size, stability and asset growth. When his colleagues saw he was willing to sacrifice, they were willing to negotiate in good faith, he says.