Respect your youngers and get ready for the next generation of advisors.

Those are two key messages for financial advisors contemplating retirement that are included in a new report from Cerulli Associates.

“As a critical succession cliff approaches and aging advisors begin retiring in greater numbers, younger advisors and candidates will increasingly wield stronger leverage,” states research analyst Marina Shtyrkov, one of the authors of the report. “Firms will need to take their preferences into serious consideration because this next generation will ultimately shape the financial advice business.”

According to Cerulli, the average advisor is 50 years old and close to one-third (28%) of those within 10 years of expected retirement  presumably many of the 50-year-olds lack a certain succession plan.

Advisors 55 and older account for close to 40% of the total number of U.S. advisors, which Cerulli puts at 312,000, citing multiple sources, and 37% of assets under management.

Older advisors will have to attract and train quality talent in order to retire with the business intact. Firms need to  seriously consider the preferences and needs of younger advisors as well as their firm’s existing compensation models, work/life balance expectations, training support, mentoring and company culture, according to Cerulli. They also also need to develop career paths for rookie advisors to groom them over time.

(Related: Why Are So Many Advisors Leaving Wirehouses?)

Wirehouses are making progress on succession plans for established practices, according to Cerulli. More than 40% of wirehouse advisors within 10 years of retirement have identified an existing advisor in their practice as their successor, compared with only 27% across all advisor channels. Another 23% of wirehouse advisors nearing retirement plan to hand over their practice to a junior advisor or family member.

Individual advisors, in contrast, tend to have a harder time with internal succession planning because unlike wirehouses they lack a centralized home office to to help identify and groom a successor, according to Cerulli. Individual advisors themselves “need to make the decision to hire a new advisor and they are responsible for grooming and mentoring him or her for multiple years,” according to the report

(Related: Will More Firms Leave the Broker Protocol?)

But the largest independent firms may still have difficulties with internal succession plans because junior advisors and staff may not have the means to finance an acquisition deal, which creates opportunities for consolidators like Focus Financial and HighTower Advisors, Cerulli reports. These consolidators, who have been targeting large breakaway teams from wirehouses, are now targeting established RIAs who want to benefit from a centralized scale, according to Cerulli. A number of wirehouses have dropped out of the broker protocol, which makes it difficult for advisors to break away.

“In the next five to 10 years, the market will shift as a substantially higher percent of advisors exit the industry and relatively few established advisors are available to replace them,” the report notes. “Practice management programs need to help advisors scale their practices and hire non-producing service advisors who can help senior advisors expand the advisor capacity of their practice.”