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 have part two of my conversation with Mary Beth Storjohann, co-CEO of Abacus Wealth Partners, a Southern California RIA with about $3 billion in assets under management. Unlike many advisory firms, Abacus mixes advocacy with financial advice, which she talks about in part one. In this conversation, we discuss how the firm uses psychographic information — attitudes, values or fears — to attract and serve new clients, build loyalty and drive practice growth. She also talks about using EOS, the Entrepreneurial Operating System, and how she and her co-CEO use that to develop an organizational playbook for the firm.

So, let’s jump right into our conversation. Mary Beth Storjohann, welcome to PracticeLab.

Angela Shah: I'd like to shift now and talk about business planning and your use of EOS. How does this framework enable you or the firm to best serve its clients?

Mary Beth Storjohann: So EOS has been around for years and I had heard about it even when I was a solo advisor. I know a lot of companies were adopting it. And it wasn't until I came to Abacus and we had our C-suite meetings and I think there's, everybody has an agenda and they kind of do their own things that they're bringing to … are brought to the table. The wonderful thing about EOS is that it's kind of a playbook that's written for you. It's literally, here's how to have your meetings, have this meeting once a year, have this meeting quarterly, these are the weekly meetings, here's what you should talk about, here's how to set your goals. So for new teams or teams that are looking to kind of have a container on what they're doing and some sort of accountability, to be like, am I doing this right or how are we holding ourselves accountable?

And you don't want to start from scratch necessarily. EOS has been a great framework for that. So it talks about the org chart that you need. It talks about how to create, we call ours our “one page.” Oh, I think it's called their VTO, vision traction organizers. I'm probably butchering that, but we call it our one-page business plan. That has our 10-year vision. We call them three-year headlines of things that you're looking to accomplish. Those are your three-year goals. And then we have our annual rocks, which are the things that we're looking for this year. We put that all into a one-page business plan that we roll out to the company. But EOS has been great because it helps you think about the org chart. It's thinking about the roles, whether or not [you have the] right people in the right seats.

So you could have somebody, a right person, but they might not be in the right seat or you could have the right role but not the right person. And so it helps to give you these different lenses to view your org chart and your structure and the roles and then it also helps to hold you accountable. We actually wrap up every meeting now with a rating. Our leadership team meets weekly. We will meet Wednesday mornings. At the end of every meeting, we take two minutes to go around, everybody has to rate the meeting zero to 10. And if you rate less than an eight, you have to say why. So if it's less than that, then you have to share what you'd hope to improve the next time, or maybe you didn't make enough progress, whatever it is.

But that's been really impactful in terms of building trust with the team, making it a safe space. So I think we, we've really adopted the process. You can hire a coach implementer as well. Neela and I are in a CEO forum, and other companies of our similar sizes also use EOS, and they have hired implementers that help them get things going. We chose to self-implement because, again, of our unique structure and the transition that Abacus was going through and the new team, we thought it would be just easier because we had pieces in place that we wanted to build off of. But it's been great in terms of holding a container for things, and it also has you build a scorecard.

So I think one of the biggest hurdles in the industry right now that a lot of people are seeing in the news is the lack of organic growth, right? Where's the organic growth? And most companies have been propped up by the market growth. And that's kind of in … it's all coming to light now. And so with the scorecard focused on where the leads are coming from, the amount that we have on opportunity spending, having that lens allows us to, again, meet weekly, we're tracking these metrics, and we're looking at what's happening in the business. We can see underneath, and we can identify trends and actually address them. So before that, we had dashboards and things we built. But, again, everybody has their own dashboards and how do you bring it together as a team? So over the past 12 months, it's been really insightful for us to adopt these practices and these tools, and to start to use them as a screen for creating, you know, change internally.

AS: What are some of those trends and opportunities that you see as opportunities for growth?

MBS: M&A [mergers and acquisitions] for us is something that we're really looking into. And I think one of the things that we are interested in, uniquely I would say, is the idea of we call them tuck-ins… so we probably go after a smaller M&A market than most of our competitors would. Sure there's, and then we call them tuck-ins and acquihires, right? So we're acquiring the talent. What talent is out there that we can bring into Abacus to further our growth. So we just acquired a firm out of Portland, Oregon: Halcyon Financial Planning. Its co-founder Will Kaplan is a Salesforce genius. I mean he basically automates, he automated almost his whole practice, the templates and the things that can go out of his software over to his clients and streamline things. We know that he has that zone of genius and, basically, we want that at Abacus. We want to take that knowledge, implement it here on a larger scale and be able to automate some of our internal stuff so that we can free up advisor capacity.

Those are unique things that we're looking for in terms of who else is out there. And I think it's under the radar because of the size of some of these firms; they're basically people who have left, they've left their previous firms for a reason. They've left to go out on their own because they either couldn't work the way they wanted, they couldn't serve the clients they wanted to. When I launched my own company, there was almost like a kind of disgruntled next generation of not being able to work with the people that you wanted to work with and the way you wanted to work with them. So knowing that and having been one who previously left a firm to launch my own company because of the path that I was being plugged into, you …

AS: Knew what to look for.

MBS: What to look for and why people have left typically in some ways and those needs. And so we look to that now and the energy … I think there's a lot of energy that comes from these tuck-ins and these acquihires because they are entrepreneurial. So you have the second generation and the next generation that comes up internally inside a company. Some of them might not be as excited about doing sales, though. They might be great at servicing the clients and generating the referrals. But if you're looking to get people who will go out there and do the sales, those solo advisors or those small firms that are breakaways that have been scrappy enough to build it themselves and have created some traction. There's energy there. They're building something, there's value, and if you can get them in here and they're still hungry to learn, that's opportunity.

AS: You mentioned this idea about clients with differing points of view: we’ll accept you if you accept us. How has that worked in practice because we have such a polarized society and it seems difficult to find that middle space?

MBS: So, in general … we have a very unique team member. So when I joined Abacus, the marketing team was a little bit kind of piecemeal, and so I inherited a staff of four. And at the time, our writer, Tim, he's a former screenwriter, and he was doing video for Abacus, though. And then I got in there and I realized, My gosh, this guy's a content creator, and a writer. And so I switched him over to doing our content creation or writing. And from there, he's actually gone on to school. So just as a second career for himself, he's become a therapist. Right? So he actually started school while he's been working at Abacus. And he just, he just finished his coursework recently. So now he's seeing clients as well.

But having a licensed therapist on staff is quite nice in terms of responding to some of this feedback that we get from clients, and then also crafting our messaging. So the biggest thing is that we try not to be inflammatory, we try to invite people to the table when we are addressing some of these issues. And when we are sharing our voices, and we talk about the audience and who we want to share these messages with. And it's been a learning journey along the way, but we use, so, for example, everything that we do, right, anything that we do send messages on, we do it through this lens. Oh, it's called nonviolent communication, right? And so when we're sending the messages, we're again, we're firm in our stance. But we are also, like, giving suggestions and tips and tools. And we try to be inclusionary.

However, we do have clients and public who reach out and are not in agreement with some of those things that we say. And Tim's great [for] any client that's upset on anything to actually on issues as well.

We use Tim to screen through a lot of our responses, and it's a lot of, “we see you; we hear your concern” about fill in the blank. We invite the conversation with those things. And so again, we invite people to the table.

AS: Great. So at Capital and PracticeLab, we talk a lot about sort of how advisors should find their ideal client. And you've mentioned focusing on psychographic traits to help identify Abacus’s client, and I wondered if you could share what are those characteristics? What are those traits? And who are these clients that you feel the firm can really best serve?

MBS: Yeah, I'd say we have psychographics. We have 30-plus advisors at this point in time. And so we broke our clients down into three different categories: Builders, those still building their assets and working towards retirement. Protectors are those who are transitioning into, close to transitioning into or in retirement. They're looking to protect their wealth. And then we have changemakers, and that's a little bit more kind of numerical focus. And that one is $5 million-plus of assets to invest no matter your age. You're looking to create some sort of impact with your wealth. And so we call those changemakers. In general, those things that we've talked about already in terms of leaving the world in a better place. They're looking at climate, they're looking at DEI [diversity, equity and inclusion], they're looking at ESG [investing to support environmental, social and governance metrics]. These clients are concerned about the world and what's going on and want to create an impact or want to do good with their money.

We do a lot with that audience. I would say we have. And within those, there's different subsets. The avatars, we talk about, they love dogs, they shop at Whole Foods, they REI, they like to be outdoors, they meditate, they do mindfulness, they do yoga. Those are some of the things that we're looking at. And so when we're creating content around that and the idea of Buddhism, for example, since both Brent and Spencer are Buddhists, we create content and market around those things. And so if you actually go on the web, the Abacus website, we have money meditations on our website that our co-founder Spencer has created. We also SEO [search engine optimization], and just from a client target avatar, we have some blogs that are targeted just straight towards the Buddhist population and talking about how to integrate those principles with your wealth.

And so when people are Googling things, Abacus pops. So those are some of the things that we lean into. Diversity, equity, inclusion is another one. We have an LGBTQ initiative as well. So those are the things, like, we're looking at those unique groups and demographics of people and then what are their concerns underneath. I always say psychographics are most important because those are going to inform your blog posts, the things you're presenting on. Those tell you about where your clients spend their time and what they're worried about. That's really it. If you look only on the numbers of the ages and the values, that's not telling you anything. And it's the emotional connection that's going to get you the clients. That's always like, how do you speak to what is on their hearts and their minds? And that psychographics is typically what's going to inform that.

AS: And you mentioned that you work with 30 advisors, and you are an advisor yourself, as you as you spoke about earlier. How are you or your advisors able to blend their voices or individual approaches to money along with Abacus and being part of the firm?

MBS: So there's a variety of options, and I think we talked, I talked briefly about there's some advisors who want to work with the clients, want to get their referrals, and they're not looking to necessarily use their voices. They don't want to blog, they don't necessarily want to do those things. And so in that case, the Abacus brand is really great. It's up there for them. They have the content they can lean on to share. There are other advisors, though, who want to use their voices and they want to create their content. We call those personal brands. And I would be one of them in terms of, I have my own platform that was called Workable Wealth and a podcast that was called Work Your Wealth. And so we call those personal brands at Abacus. And that's, basically, we support advisors in creating content.

So they can write and author blog content on our main blog under their own, under their own authorship. So they get that traction. We give them the opportunity with approval from our compliance director to create their own social media content. They can plug and play, get it approved, and they can post on social media as well for those set things. And then based on the activity, we will also support additional webinar creation, the podcast. The biggest thing ... so this is my CMO hat and my CEO hat probably of what we have found … we won't do it for you in terms of creating the blog, creating, if you want to have a YouTube channel, if you want to have a podcast, if you want to have your separate subbrand, you have to have the energy and the desire to do that. There's a few where we will support, obviously, co-founders and different people who have kind of grown up, grown with the firm, but if there's newer advisors who want to have grown personal brands, you have to kind of have that traction behind you and need to show that you're willing to put in the work. And then marketing, our marketing team will support you in that. But if you're looking for, if you want to start a podcast, marketing's not going to go out and spend a bunch of their time and energy so that you can launch a podcast unless we can see and believe that there's going to be traction and that you have a plan in place, if that makes sense. And so we throw support and revenue behind our advisors who can show that and show that interest and allow them to create content in a variety of areas. But we're kind of strict on the idea of throwing money at something that we aren't sure the advisors are going to take seriously. Yeah. So then we have found, and maybe that's my own bias coming in, but we have found that those that are willing to do the work to do it are more likely to invest in it versus somebody else says, oh, here's how to do your podcast. And you hand it over, the energy's not necessarily there. Yeah. So understand the nuances.

AS: And real quick, just also based on your firm and workable wealth and working with women. For better or for worse, the industry is still figuring out how to work with half the population. And you know, what would you say, like, what do you do or what should the industry be doing?

MBS: It's so funny and I'm going to say this and I feel like we've been saying it forever, and I don't know if I still need to say it, but I think I do. Women are not an avatar. We’re just not. We're just half the population. So in general, the idea of having the women in wealth [focus], women want safe space for conversation and to connect, but there are so many nuances and so many different life transitions that women are going through. And it goes down to, do you drill down more into that demographic of what type of women are you looking for? Is it women in tech, is it women in transition … I specialized at Workable Wealth and women's small business owners and ended up being able to work with them on, they came to me for personal finances and then we realized that the business finances maybe not as organized as well. So there was a lot of business financial planning that kind of came into it and being able to, and that was a unique avatar and that was mine. But figuring out what subset of women you want to work with. And I think a lot of people go after the widows, the divorcees, those transition components because there's money in movement and in transition there, obviously. But I think the authenticity of it is not making women like this …

AS: Monolith.

MBS: Yes, exactly. And breaking it down. And I think there's the next generation of women, the Gen Y, the Gen X also, I think they were incredibly underestimated in terms of how much wealth they're going to basically be controlling and part of the roles they're playing in their households right now in terms of controlling the money and the decisions that they're making. So I think the industry is behind in actually targeting that Gen Y/Gen X clientele because they're still focused on, again, what we call protectors, the retirees. But I think there's a lot of opportunity there, and the next generation of women, because they are empowered, they are curious. And this narrative, I will say the narrative that was there a decade ago about this idea of women being scared of money, I don't think that has shifted along the way. And I think women are very curious and they want no nonsense.

So I think there's opportunity there, but you need to drill down a little bit, figure out what you're trying to do and how you're trying to impact it and meet their needs. If you're working with women in tech or in transition, women are busy, busy, busy. Read any article post-pandemic. If you're working with working moms of any sorts, make the meeting as impactful and as short as you possibly can or make it so wonderful that they want to come and spend time with you. But don't come invite them to meet you online or in your office to talk about the 20-page financial reports. You have to make it something that they are interested in and feel excited about. Again, that shift of what does the client want versus what you want and the ego that we talk about. What makes you feel good versus what makes them feel good. It's a tale as old as time in the industry, but still the same story

AS: Still needs to be repeated, right? Yes. I know that you've said too that you'd like to serve younger clients and talk about presumably that's also lower profitability, at least in the short term. But talk about that as a strategy and why it's important and possibly investing in the firm's future growth or how do you view that?

MBS: Yeah, and so I think that's the great thing about Neela and I is, Neela loves working with retirees and I personally, I love working with the next generation and those are just tied to our personal money histories and those things. And then also the business opportunity that is there as well. And so we look at the protectors, the retirees, those are the assets of today, those … that is the revenue that is feeding the business today. And then we look at some of those younger clients and that is the revenue of the future. And so there's opportunities there when you do work with the younger clients. The risk comes, if you don't have structure, and I think a lot of firms, if you have a very clearly defined planning process and the number of meetings are set and you are, you're basically, you're saying what you're going to do and you're doing what you say, and you're not overdelivering the profitability risk for these smaller clients.

But if you do, I think our minimum fee is $3,600 right now: $3,600 minimum planning retainer, plus 1% of investments under management. That's the Abacus low end. We probably usually sell around, it's usually around $4,800 for the lower end. But with that,  there's the initial meeting, the investment process, then you need to get two meetings a year in terms of every six months you're getting a check-in, it’s very structured. There's no reason not to be able to keep those profitable and maybe not as profitable, but to keep it profitable if you're putting the structure in place. So I think that's the biggest thing in general. And with that, you're building trust and credibility from a younger age and you're getting the exposure. So the clients that are in their 30s, early 40s, you're helping them transition through big life stuff in terms of having kids, setting up the college savings, changing jobs, buying homes.

There's so much transition happening that can require more planning. And so again, it's making sure that you're pricing it appropriately if you are doing more for those clients. But by getting that relationship with those clients at a younger age and building that trust with them, the assets that come from the future that is growing. And so I started my own company in 2013, and you see it now, the clients are now Abacus clients, but you see it, I mean, in terms of they’re executives and tech companies, they are getting inheritances. Things are happening, their money is coming in, and those accounts are growing to where they're over the traditional $1 million and they have other assets that are coming in. And so I think the assets of the future are from that younger generation, and the firms that are not working with them are going to be at even bigger risk for the organic growth because we're working on a fixed pool of retirees over here. Everybody's going after the same fish. And so if you're not expanding and you're not looking for those other opportunities and you're not trying to lean on tech to automate some of your services, you're going to get left out. And that's the, so Abacus, we have a steady split. We look at the number of protectors versus what we call builders and where the revenue comes from, but there's potential from that cohort, assuming it's priced right and assuming that you are delivering the services in a streamlined and structured way.

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 is fun.

AS: Yep. Thank you. And thank you, Tyler.

Angela Shah: Well, that’s it for this episode. We really hope you enjoyed it. Check out part 1 of my discussion with Mary Beth where she describes how Abacus “uses its voice” to help create a better world through financial planning and how that ethos helps clients better reach their financial goals.

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