When advisors do retire, they generally sell their businesses to other firms or to an internal successor. Alternately, they may refer clients to competitors. Ideally, their former clients find themselves in the hands of someone with the same approach to investing and client service.
However, many planners haven't even bothered to create formal succession plans, which is ironic, given that a fair number of them specialize in succession planning for businesses. Only a quarter of all advisors have a formal succession plan, according to a report by the Financial Planning Association.
Read MoreSuccesion plans key for investors
Among advisors ages 60 to 64, about 31 percent have a succession plan. Of the planners over age 65, some 41 percent have a succession plan, according to the report, which is based on the findings of a survey of more than 2,400 advisors and other industry professionals.
Many older advisors don't have a formal succession plan, because they don't expect to retire anytime soon, explained Valerie Porter, a Denver, Colorado-based certified financial planner who serves as director of practitioner services for the Financial Planning Association.
Often, veteran planners have labored long and hard to build successful practices. Rather than hand the keys to someone else, many figure they'll simply reduce their hours as they age and, for those who charge a percentage of assets under management, continue to collect a steady stream of income.