Hello, and welcome to the PracticeLab podcast, where we talk to top advisors about what makes them successful, so that you can apply those lessons in your own business.

I'm your host, Angela Shah, and today we’re speaking to Mary Beth Storjohann, co-CEO at Abacus Wealth Partners here in Southern California. Abacus was founded by two Buddhists in 1996, and while those founders have stepped away from the daily management of the firm, that ethos remains strong in Abacus’s mission and values.

Today, Abacus is led by two women, Mary Beth Storjohann and Neela Hummel, who serve together as co-CEOs, and it’s been an eventful year at the helm. Storjohann says Abacus seeks to “use our voices,” and the firm has in recent years spoken out loudly on matters such as family leave and reproductive rights — an uncommon move for the typical financial planning firm. For Abacus, money doesn’t operate in a vacuum, and Storjohann believes that societal issues also impact financial health.

A “values split” among Abacus advisors who believed that they should stay out of such public discourse resulted in a breakup last year, halving assets under management to around $2 billion. Since then, Storjohann says, their advocacy has attracted other advisors and clients to Abacus, and AUM has climbed back up to about $3 billion.  

Mary Beth and I covered so much ground that we broke our conversation into two parts. Today, we’re discussing how she and Hummel created Abacus’s unique leadership structure and how it enables them to both do what they do best — while also maintaining work-life balance. Part 2 will dive into the firm’s strategy to sow seeds today that should result in future revenue growth.

Let’s join Mary Beth in the PracticeLab.

Angela Shah: Mary Beth Storjohann, welcome to the Practice Lab podcast. I'm really interested in hearing about Abacus. It seems like such a unique way to look at wealth management and money. So give us some background: It seems that Abacus was conceived with and it kind of runs with a different or unusual set of values for this industry. Give us just a little bit of background on the firm and its founding.

Mary Beth Storjohann: Sure. So thank you for having me. Abacus has been around for over 20 years at this point in time. It came together I believe, yeah, about 21 years ago. The co-founders, Spencer Sherman and Brent Kessel, met on a retreat with George Kinder, and they were both running solo firms at the time, really connected over the struggles they were each encountering, went their separate ways, met up again about six months later and decided to do what they call “move in together.” So they started basically running their practices side by side, kind of simultaneously. The teams got together, they knew each other, but they hadn't quite merged the firms. So that kind of was a unique thing that they did there. But in general, the uniqueness comes from the fact that both Spencer and Brent were Buddhists, are Buddhist. And so those principles were really integrated into Abacus.

We have been profiled in a variety of publications for our Buddhist nature, for the things, the mindfulness that we incorporate. Both are practicing. I think Brent's been profiled in Yoga Journal. I'm not too active in that space though, but I know they've been in a variety of areas. So those principles around mindfulness and money have really been incorporated into our brand, into our values, and I think that's one of the things that makes us the most unique. We are the first financial services firm to become a B corp. That means we do good with our business.

AS: Let’s fast-forward a bit. You have a pretty unique leadership structure now at Abacus, not only for wealth management, but I imagine in business, more generally, with having two women as co-CEOs. Tell us how this came about and how it works

MBS: Yeah, so there are two of us CEOs, myself, and then my co-CEO is Neela Hummel. Prior to becoming co-CEOs, I joined Abacus in March of 2019 as their chief marketing officer. So I had run my own financial planning firm virtually prior to that. I joined Abacus specifically for the seat at the table as the chief marketing officer to be able to have a bigger impact on a larger company and the branding. And to be able to tell the story. Neela has been with Abacus for over 12, 13 years, I believe. And at that time, they were forming the C-suite. She stepped into the chief of advisory services role. So she was leading all of the advisory services at Abacus. Fast-forward, 2019 to 2020, a pandemic hit, and Neela and I really found ourselves coming together quite a lot to collaborate around teams issues, around telling our story, how we communicate with advisors, how we communicate with clients.

We were working together a lot in terms of leadership for the organization. And when it came about that Brent Kessell was looking to step aside and focus more on the ultra-high-net-worth areas and the impact investing that he likes to do within the organization, the board of directors opened it up and did an internal search for a CEO. So you didn't have to be a partner, you didn't have to, basically anybody could apply. And I sat down at that point in time and really talked about the ways that we had been collaborating and whether or not we would apply individually or whether we would apply together. And it came down to, while we both knew that we were confident we could do the job individually, we thought it would look very different if we were individually taking it on versus collaborating and bringing our combined strengths to the table and really being able to lean on each other.

So we spent months doing research basically on the pros and cons of co-leadership. We found different papers that were authored, we researched and had a lot of difficult conversations talking about how we would divide the org chart, what are we proposing, making sure that we were ready for the board of directors through the interview process of their questions and pushback. And so we submitted ourselves as a joint application. We were, a lot of people think that we were put together, but we actually opted to be together, which I think is one of the very unique things as we looked to tackle this head-on. It was three rounds of interviews. The board of directors pulled us each aside at one point in time, too, and asked us, Hey, if we had one of you CEO and one of you president, or how would you do that?

Which, interesting, because they asked us both individually, and we both were ready for it: Both of us or neither of us. It's actually how we positioned it because we were really confident in what we're bringing to the table. So the board of directors also is confident in what we were bringing to the table and they opted to move forward with us as the candidates. And so we stepped into the co-CEO role February 1, 2022. From there, what we've done is, or we've divided the org chart. So on my side of the org chart, we have strategic planning, kind of the visioning communications. So I have marketing on my side. I have our investments team on my side. Our director of impact reports to me, our pro bono, our DEI efforts. Those are all under my side of the org chart. Neela has our chief of advisors and our chief of operations reporting to her on that side. And then our CFO reports to both of us.

AS: It’s interesting that you both went in having prepared for pushback. I’m wondering, what advice would you have for other advisors who would like to pitch an alternative leadership structure like this?

MBS: I think the biggest thing that we've found and the biggest roadblock and hurdle, is this concept of power. And a lot of people want the power. There is, let's be frank, there's a lot of ego in this industry, and the thing that we brought to the table and that we have looked at again and again is, what's best for the company? Is it best for the company, one of us to have the power, air quotes, or is it best for the company for us to bring our unique and specific skill sets to the table and combine them for something that's even better that can propel us forward? And I would encourage leaders and boards of directors to look at it through that lens, to step aside from this concept of power and this concept of ego and think about what the business truly needs. And I think it takes a lot of vulnerability and it does take a lot of work to get to that point because we have to have a unified front.

Neela and I, we disagree, I will tell you we disagree, but it is on us. And we made from our application period through our rolling out our vision to the team and the concept of co-leadership, we have let the company know that it is on us to settle our disagreements behind the scenes. It is not on anybody else to try to interpret. We are a unified front when we are rolling out messaging and visioning to the company and any new processes and components there. So I think that's the biggest thing I would encourage people, to think about the lens of what's best for the business. We often think about what's best for ourselves and that's really, let's be honest, I'm a CEO. We are all career hungry, wanting to elevate ourselves and get to the next level. But when we really put that lens on what's best for the company and for something like Abacus that's so unique, and we care so much about our people and leaving the world in a better place than it is.

I mean if you look at the Abacus brand, you kind of know where the, we wear our heart on our sleeve. And so for us to be able to, it's easy for us to say what's best for Abacus in that point in time because we truly want to do what's best for the business because we have a greater impact that way. So I'd say that from that concept, from that area, looking through that lens. The other idea of this co-leadership is thinking through, what are the holes in your org chart? What do you need? The operational component, the visioning component, the creativity, the strategy, thinking, what's lacking in your business and looking to see, do you have those pieces on your team? Do you need to look outside? So the unique thing is again, we opted to go together to do it.

So we applied together versus being put together, being put together is different. And I also say the other thing that is different that I see, I do see co-leadership in other organizations, but what I'm seeing is it is a founder and then the next gen, right? So the founder's kind of phasing out as co-CEO and the new next gen is phasing in. And that's not necessarily the same, so to speak, because the org chart's not necessarily divvied. It's kind of almost like a learning phase or training wheels. So I think those, there's different ways of looking at co-leadership. We look at it as just divide in sharing of power. And we also have implemented co-leadership at our CIO level now as well. They're new to the job.

Our, one of the CIOs was appointed to co-CIO and then just went on family leave right after that. So we have it, but we're working. So we have one who's standing in right now for both of them. But that's the other benefit in terms of having two of you. I will say with Neela and I, in terms, we have between the two of us, we have five young children, we have five kids, 7 and under, between the two of us. And it's nice to be able to have that person, too, to, Hey, we're going to do this. I'm going to step aside, I'm going to actually take the vacation that we say that leaders need to take, do that balance thing, take the time off, unplug. And we've got it down to a science now, where she just went to France for two weeks.

I have an email open of any big decisions that need to come up. It's just like I can jot things down as a little bit, we call it “Dear Diary,” a little note of what happened. She gets it in her inbox and we can jump right back in. But there, it's nice to have that flexibility as well of hey, if something does happen and somebody needs to step out for a week or two or wants to, there's another person here to run to jump in and talk to the staff, to take a podcast, to do these things. We both get to tell the story. So it's actually beneficial having two of us.

AS: So you’ve hit your one-year anniversary, and let's talk about, you sort of had a major split with some advisors leaving last year because of a values misalignment. AUM was at $4 billion around 2019, before this. How have you navigated this transition? And how are you building back AUM? Talk about this year of transition.

MBS: Oh, so as of right now, AUM, we're about 3 billion. That's post the split in market 2022. So yes, that's …

AS: True. That was a factor.

MBS: And so we are still building, I'd say last year. So what happened, we had that value split, which was best for both sides. We're actually still in contact with the other team, the other company as well, because when you do work together for so long, you're kind of, like, you become a family. So a lot of people are still connected to them as well. But with that split, in addition to the CEO transition, that was a lot for the company. Neela and I keep saying that we couldn't have stepped into the co-leadership, I don't know, at a better time, because with that split plus the market downturn, everything …

AS: That's a lot.

MBS: Had a master's class in leadership over the past 12 months. And so with that, it was really focused, our first 12 months were really focused on steadying the ship. We were coming out of a pandemic as well, where mental health was front and center. Abacus was already ahead of the times in terms of being able to work flexibly or remotely, virtually, all of that, but wanting to make sure that our team members that were staying, they also ended up inheriting some clients. And so it was mostly steady the ship. We didn't go hard on sales last year because it was, okay, well, these clients are getting moved around, let's make sure everybody is good, let's make sure people, the teams, were oriented. And so Neela and I spent a lot of time just establishing our rapport with the team. And the most important thing is making sure our team feels seen, appreciated, connected with.

And we did great, actually we do every other year, which we actually got delayed during, due to, Covid, but we do a team-wide gathering, company-wide gathering called Convergence. And so that's where we basically brought the whole team to a different city. We get together for three to four days of a retreat, and we were able to get the whole company together in September last year in Boston where we spent three to four days together, and Neela and I were able to roll out our vision and hear feedback and show our shared dynamic, basically, in front of the company in person. They can see how we play off each other. I'm the Italian who talks with my hands quite a bit and very, I probably wear my heart more on my sleeve, and Neela’s very practical and operationally oriented. So it's great they can kind of see that dynamic, and I think that really built some trust and credibility with the team. So that was the focus as of last year and spent some time orienting and putting our leadership team in place. We had some new people come into the C-suite, and so building that trust there as well. And that was the goal. And so this year, we're really excited to hit the ground running. We're focusing on growth, we're growth oriented. The team is energized, the team is excited, and so we're already seeing a better start to 2023 than we did for 2022.

AS: What was the cause of the friction? What was the misalignment that caused the split? It sounds like it’s now worked out for the best, but tell me more about that. And how did that affect what it is that you do at Abacus?

MBS: At the end of the day, Abacus, we care about, no, this is not to say that people don't care. We use our voices is what I should say. We use our voices to create an impact, to share messages, and from an economic lens, we talk about what's going on in the world. So we talk about the racial wealth gap, we talk about reproductive rights. Neela and I issued a statement in June of last year about women's reproductive rights and why it's important for firms in the industry to talk about these things. We talk about family leave. We use our voice to create change and to better the world. And some people aren't okay with that. They think business should be business and that part should be left private. It should be that brands and companies should not be opining or sharing opinions or values on those things.

And there was a divide basically in how Abacus uses their voice. And if we use our voice in such a way that we try to do it in a way that is mindful, that invites conversation. We are very loving, and we always say that we accept you as you are, as long as you accept us as we are. But we completely understand there were some people who would feel not aligned with that or intimidated by it or it could cause some uncomfortable conversations with people that they don't want with their clients, that they don't want to have. And that ultimately ended up being probably the big divide of just how we use our voice and the area, the impact that we want to create and how we lean further into that. That was the authentic, to have that other faction of Abacus there that didn't agree was almost hindering like our authenticity, right?

Because we could share these things, but behind the scenes there was disagreement around it. And I think there was years in the making of this tension and then it kind of came down to, okay, in order for both sides to do well, split off, and you run your business the way you want to run your business, and they're thriving, and we run our business the way we want to run our business, and we're able to hone that messaging and to lean into it more. And to be honest, we turn some people off with it, but those that come to Abacus know who we are, and they are here for it also though.

There is so much going on in the world that we could be putting a statement out once a week on something going on. And some of our peers and our competitors actually on the impact investing side of things, they opine much more frequently than we do.

And so some of our guys who lean more heavily into that space, we have this push of, well, why aren't we doing more? Why aren't we saying things? And we have to be really thoughtful when we're saying things, though. And so we are inspired by that work. And then we recognize that we are a traditional wealth management firm as well and know that the fact that we use our voices is actually more progressive for the traditional industry. And so we walk a line, we choose not to opine on everything. We, again, make sure that we are only opining if we have an economic lens on it. We're not just saying women's rights are women's rights because it's my body or what I say goes. It's not that … we're saying women's rights is important, so that women have the financial, these women having children, what's the impact on their income, on their career path, their long-term financial state.

So we go down that level from, again, a financial perspective when we're sharing the messages so that we're educating along with it. We don't put … so that actually I think brings people along further for the conversation because we're not saying I feel this way. We're actually bringing in the data to talk about the financial impact of these choices. So there's kind of how we do it. We have given advisors, some of it we choose to push out to the newsletter, which is our whole community. Some of it we choose to push out just to the industry for certain things. Some of it goes out in press, and so, depending on the statements, we choose which audience will get them and then we let advisors choose to send them directly to their clients if they want to or not. And then in terms of being worried about leaving revenue on the table, I think there's always that concern.

But I think you do either way. If you don't have a niche in a brand, you leave revenue on the table. If you do have a niche in the brand, you're going to leave revenue on the table. And so it's this Catch-22 either way. And so we lean towards using our voices and being able to attract people who are aligned with the work that we're doing. We want to use business as a force for good. We want to leave the world in a better place. We want to hold ourselves accountable to doing work in climate, in DEI and sustainability. And we are going to talk about that work, and it might turn some people off, but for those people that are turned off, there are others out there too who are attracted to it. So we are okay with that. I do think we are learning, and it's a constant, just intentional and takes time to be able to use our voice though.

So again, whereas pre our split how we handled messaging, we put something out after the George Floyd that was a little bit more abrupt for the company. So I was actually wearing my CMO hat at the time. I worked with our CEO and our president to do the messaging. We ran it through everything. We got it out. And then we had, our advisors didn't feel prepared, though, for what came after that. And so that went out to our whole list about our statement there. And so we've learned along the way and we've actually, and we're still working on it, I just finished putting final touches on what's called our advocacy policy, what shareholder letters do we sign onto, what do we speak on? Who has the authority to speak for the company, what are the lenses it needs to go through? So we are much more structured and methodical about it now, and still using our heart, but making sure there's at all levels so that the company is prepared, because you know, want to make sure they feel empowered and aligned with what you're doing.

AS: Talk about servant leadership and how has that manifested in the daily workings of the firm and working with your employees?

MBS:I think servant leadership in general is just about connecting to the individual. And I think it's hard to do that as a leader when you have so much on your plate, but really about doing what's best for your clients, your community shareholders, and making yourself available. And I think again, taking the ego out of it and looking to what the employees need, looking to what the clients need doing, being a fiduciary. So Abacus, look, really like Neela and I at first called it, we adoringly called it our warm hug tour last year. We spent time sitting down with our CSAs, taking people to lunch. We've unfortunately now had multiple people lose loved ones over the past few years, and Neela and I are the first ones to get handwritten cards out, to send chats, to check on people wanting them to know. And it takes more time to do that, I'm not going to lie.

It does take time to be thoughtful in those ways, making sure that those families and those employees feel taken care of, that they can take the time off to be with their families. They don't have to come back to work a week later. And so it's this and the idea of serving in terms of the industry, we talk a lot about for us that we want a more diverse client base, we want a more diverse industry. Everybody is talking about it, but how do you actually make it happen? Well, you have to turn yourself into a servant. You need to listen to others, you need to hear their needs, you need to believe the stories of others. We need to do the work in terms of actually creating the diverse pipeline to get more advisors, people of color into this industry so that we can serve the more diverse client base.

So I think it, look, there's a variety of ways that servant leadership can manifest itself, but we really truly believe in taking care of our people and trusting our people in one way. And then we believe in doing our part for advancing the industry as well. And that looks like us rolling out a CFP scholarship for people of color. We partner with the BLX program we host; this is our third year. We're hosting four interns. BLX is Black and LatinX interns. We're hosting four interns this year. And then putting out papers like the racial wealth gap that our co-founder wrote. Signing on to Due Diligence 2.0 was another thing that we've done to just in general like being a servant to the industry so that we can do our part in building a diverse and more equitable profession as well.

AS: I just wanted to ask you a little bit about sort of the concept of enough, especially in the wealth management industry, where it's all about maximizing returns and outcomes, and but yet societally we are seeing a lot more questioning of this consistent drive toward making money or accumulating wealth. And I wondered if Abacus has a view on advising clients in wanting good outcomes in managing their wealth, but also, when is enough? Does that idea play a role at all?

MBS: I think that the concept of enough is, we talk about this, it's that the goal post is always moving. And so we start with one thing, and it's really about the behavioral finance and the managing expectations of it all. Because we can set a plan and we can say, this is the enough, and then you hit the enough, and the client is like, Actually, I'm going to get a little bit more, or whatever changes, or the needs change. And so again, the idea and concept of enough is incorporated throughout the work that we do because we really incorporate a mindfulness component and the behavioral finance component. And so it's managing expectations and being able to speak to that most.

A lot of the value from an advisor comes from preventing those big mistakes and from keeping you on track and from making sure that you are holding yourself accountable to the things that you say and digging into, well, why is this changing? Why is this moving? What do you really want, this idea of … What's reflected in your needs? So do I think every advisor across the board should be speaking to this concept of enough? We don't have an Abacus-branded way, but we talk about the mindfulness and the advising throughout it. That said, our co-founder, Brent Kessel, actually has a side project he's working on right now that's not publicly launched, but it's called The Enough Project. And so he actually talked and journaled and wrote about his own journey to enough, to enoughness, and what it looks like in his own … the ego, going back to the ego involved in it, all of that drives it. And how you feel when you see a peer that maybe he's doing better than you or a family member or this idea … what, what's pulling you? And he kind of analyzes himself and talks about his feelings, and he's packaged it in such a way now, or I kind of distilled it down to this narrative that now he's working with other clients to bring them through the … he's calling it the enough project, to find their “enough.”

So there's the financial component of, what is that true number, and then what is the impact that you want to make? What is going to be enough and why? And I think that's it. There's the numbers side, but there's the emotional side too. So you can say it's $5 million, check, but then what's the impact and what's going to make you feel fulfilled? And it's never a number. That's why people retire and then they come back out of retirement because they don't actually know about the impact and they're not ready for it. So it's not just this checkbox on the financial; it really is about going deeper and thinking about the life that you truly want to live, which is uncomfortable work. No matter what age, you are trying to get to know yourself. That's why people work so much. They don't like doing that reflection. A lot of time and energy, and you see it, and it's really wonderful when you get to work with clients on it. But I think we see it, too. That's why advisors in our industry are still working in their business at 70 years old. They're going, we're winding it down with it because you don't know what's next. And doing that work, it's hard to figure that out, but it really is tied to impact and legacy and that other side of the life that truly brings you joy. It's not necessarily tied to this numerical impact.

AS: Well, excellent. Thank you so much, Mary Beth. This was a fascinating discussion and I appreciate your time.

MBS: Thank you for having me. This was fun.

AS: That’s it for part one. Thanks to Mary Beth Storjohann for the great interview. Thanks also to Tyler Furek for connecting us to Mary Beth. Now, check out part two, where Mary Beth tells us more about how Abacus is tapping into what she calls “future revenue” by finding profitable ways to work with next-gen clients today, using an entrepreneurial-type framework to build trust with her team and the firm’s “acquihire” strategy to fuel organic growth.

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