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?