In late March, Financial Advisor touched based with an old friend, Nick Murray, and interviewed him on a number of subjects, including his latest book, The Game of Numbers: Professional Prospecting for Financial Advisors. The interview follows below.

FA: You've just written a book about prospecting. Although you've devoted some space to prospecting in your earlier books, they're much more about practice management. What prompted an entire book about prospecting?

Murray: Last fall I did an all-day intensive session in New York for my newsletter subscribers, who tend to be a pretty accomplished group. One of the follow-up services I offered was a review of the attendees' business plans. A common theme that emerged from those reviews was a desire meaningfully to expand the practice, but with no commensurate prospecting plan-just a kind of gumbo of marketing, hoped-for referrals, and osmosis. The epiphany, for me, was that prospecting anxiety is the elephant in everybody's living room.

FA: Any particular challenges in writing the book?

Murray: The challenge was to arrive at one system that would be equally useful to new advisors as well as  experienced, mid-career advisors stuck on a plateau or in a "comfort zone." Once I solved that, the book basically wrote itself.

FA: Is prospecting an art or a science?

Murray: That's actually a wonderful question, and I answer it-head-on, and in exactly those words-in the book. The answer is that it's neither. It's a discipline. The system I outline in the book is directly analogous to endurance training, in which you gradually but steadily increase your capacity. Prospecting plans fail, I think, because advisors suddenly jump up off the couch after five years of watching TV and eating Ruffles, and go out and try to run marathons. They're setting themselves up to fail.

FA: Is the book specific to investment advisors?

Murray: Very definitely not; it's deliberately and even single-mindedly for all financial planners, regardless of the channel they're in.

FA: Has prospecting changed, do you think, with the advent of the Internet and Do-Not-Call?

Murray: I'm quite sure it hasn't. Prospecting worthy of the name is the attempt to start a conversation with another human being about becoming the steward of his or her financial future. That's eternal. And the governing variable is and always will be the number of times you try to start such conversations, as opposed to issues of method or scripting. My book is about gradually building up your capacity to make those attempts.

FA: Turning to the wider world, if we may, we've now completed the best year in the equity market since the Depression, after the worst bear market since 1929-32. What do you think the top concerns of affluent Americans are at this point?

Murray: I'm not sure this is directly responsive to your question, but I guess the thing that strikes me most forcibly is their immense and impenetrable disbelief in the recovery. The equity market went straight up for all but the first 68 days of 2009, yet investors net-liquidated $35 billion of equity funds, and bought, on net, something like $420 billion of bond funds. It's amazing. And also suicidal: As the economy reflates and rates rise, bonds have to get killed.

FA: Then what do you think people should be worried about?

Murray: Running out of money in thirty-year, two-person retirements. If I were starting back in practice today, that's the crusade I'd enlist in. The baby boomers-about whom we stopped talking when we switched to talking about Armageddon-are thirty months older than they were at the top of the market, and thirty months closer to retirement...but they have even less money than they did then. That, to me, is prospecting heaven. If you couldn't make an outstanding career out of helping those people get back on track, it might be time to start thinking about hanging it up.

FA: Two issues, then: Once an advisor knows what kinds of clients he wants, how does he go about cloning them? And the opposite: What red flags tell you who's a client you don't want?

Murray: I think if you just talk relentlessly about long-term planning, strategic asset allocation, disciplined diversification and faith in the future-the eternal verities-you'll end up with the people you want (assuming always that you prospect enough, of course) because the crazies will de-select themselves. Conversely, if you prospect somebody who just wants portfolio management but won't do a plan, babbles a lot about performance, and/or is acutely price-sensitive, that's always somebody you want to throw back.

FA: We're hearing that, after the losses of 2008-09, some advisors are scaling back their minimums. Does that make sense to you?

Murray: It's tragic. This is the time to raise your minimum, if anything. There are so many great accounts still up for grabs because they feel betrayed and abandoned by their old advisors. Good advisors who really step up their prospecting activity in here can really be selective.

FA: From a big-picture perspective, what's your long-term outlook for the financial advisory business?

Murray: I've never been more bullish on it than I am today. Again: Here you have the whole baby boom generation, being cattle-prodded toward retirement, totally confused by what's happened and therefore optimally receptive to sound advice ... just heaven. We just have to pray that the market doesn't go up too much more too fast, or else they'll get complacent again. Very tough to prospect complacency.

FA: When we touched base late last year, you were very positive on equities for this decade. Are you still?

Murray: I don't see how one can not be. Jeremy Siegel surveyed all the ten-year periods since 1871, and found that equities averaged a net real return (after inflation) of 6.66%. He found 14 ten-year periods of negative return, including this one. In the decade following every single one of the previous 13 negative episodes, real returns exceeded 10%-half again the long-term average, and about twice the average return (during those subsequent decades) of government bonds. Non-financial American corporations are the most liquid they've been since the early 1950s. The American worker is more productive than he's ever been, period. And, at 1150, the S&P is selling for a tad less than 15 times the current consensus 2009 earnings estimate of about $78-which keeps getting raised, and probably isn't done yet. These facts combined with the aforementioned wall of worry make my heart sing.

FA: Looking back on the last 30 months, from the market peak in October 2007 to now, what great lessons should advisors have learned for all time?

Murray: (1) That they'll never consistently be able to anticipate the economy. (2) That they'll never consistently be able to anticipate the markets. (3) That the more dramatic the next series of economic and market events, the less advisors (or anybody else) will have anticipated them. (4) That future relative performance is statistically unrelated to past performance, and that at major turning points relative performance doesn't matter. (5) That, when the spaghetti really hits the fan, there is no such thing as a "standard" deviation. And (6) the big one: That the world did not end, because it does not end. In a pinch, you can bag the first five lessons: If you really got that sixth one, you're set for your whole career.

FA: Thanks, Nick.