In 2008, the average age of registered investment advisors rose to 55 years, and 30% of them were 60 or older, according to Schwab Institutional. RIAs' average age continues to creep up because so many of them are postponing the sale of their practices. In fact, many have given their own retirement little thought. Less than 20% of RIAs have succession plans in place, according to David DeVoe, director of mergers and acquisitions in the strategic client group at Schwab. And fewer still have begun to implement them.

Devoe's concern is that a glut of practices could develop if too many RIAs decide to retire at once. "There's a pent-up supply of sellers who need to come out of the market in the next few years," he says.

Mark Hurley is less circumspect about the threat posed by the gathering storm of sellers. "The smart guys are making a run for the door now," says Hurley, who is president of the Fiduciary Network, a Dallas-based company that finances the purchase of equity stakes in RIA firms. With every market downturn, financial advisors wonder whether they may face a retirement crisis along with their clients. This time, it may be the case.

A Tougher Climate

The steady bull market that began in 2003 made it easy to postpone unpleasant decisions about choosing a successor. The nine-to-five life of breezy phone conversations and intellectual challenges also fed complacency, says Philip Palaveev, president of Fusion Advisor Network in Elmsford, N.Y.

Now an advisor's job has shifted unfavorably to long hours of holding clients' hands, making difficult investing decisions and watching expenses like a hawk-and all for less pay, he adds. "A lot of advisors are finding out how hard it is to be in business," Palaveev says.

The signs of this shift in attitude are not subtle, says Joe Duran, chief executive officer of United Capital Financial Partners, a firm in Newport Beach, Calif., that buys RIA practices. "I'm seeing advisors who are seeing their lives pass before their eyes," he says. "They say: I need help."

For exit-minded advisors, the timing is poor. Many of them counted on the sale of their practice to fund a rich retirement. Valuations are based on revenues, cash flow and assets, and these metrics are nearly universally depressed.

Creeping expenses are squeezing cash flow even more, analysts say. Until 2008, as the markets rose, many financial advisors ratcheted up overhead-in the form of more employees, bigger offices and more technology—in anticipation of continued 15% annual growth of their practices. Now, most of them are reluctant to fire associates or downsize their offices, Hurley explains.

In addition, potential buyers are hamstrung by the freeze on the credit markets. Most banks are less inclined to buy practices or to finance a purchase. And the old default measure—selling out to junior partners—is not feasible in many cases, he adds.