The $4 Billion Buddhist RIA

Buddha statue in garden

Posted by Barrons February 21, 2022

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Abacus Wealth Partners may be the only advisory firm in the country with an unabashed Buddhist orientation.

Co-founders Spencer Sherman and Brent Kessel are practicing Buddhists, and Sherman leads a daily 9 a.m. meditation session that anyone in the firm can join. There’s a dedicated room in the firm’s Santa Monica, Calif., offices for yoga and meditation. The firm advertises in Buddhist publications, and Sherman teaches at the Spirit Rock Meditation Center. One of his recent blog posts was titled “5 Mindfulness Practices That Change How We Relate to Money.”

Sherman’s epiphany came in his mid-20s, two years after he earned his MBA from Wharton. A huge fire broke out in the Philadelphia building where his employer, the brokerage firm Janney Montgomery Scott, had its offices. The building was still smoldering, but Sherman convinced a fire marshal to let him back in so he could retrieve his computer and belongings. Following a firefighter with a flashlight, Sherman waded in knee-deep dirty water through darkness, smoke, and ashes to get to his office.

“I had this recognition afterwards that I had risked my life, risked electrocution, to get to things that were worthless,” Spencer says. He left his job, started his own advisory firm, and began “a rigorous meditation practice” to come to terms with why money and material possessions had such a strong grip on him.

Kessel’s turn away from conventional money management was rooted in the inequities he saw growing up in apartheid-era South Africa. He began investing for social and environmental impact in his 20s and founded Abacus Wealth Management to align client values with financial advice in 1996.

Kessel met Sherman in 1999 at a workshop in Hawaii led by George Kinder, a financial planning pioneer and a co-founder of the Nazrudin Project, an informal group of planners and therapists who got together to explore holistic ways of dealing with money and its emotional attachments.

Kessel and Sherman bonded and merged their firms in 2004 to form Abacus Wealth Partners as a way to incorporate Buddhist teachings such as impermanence, mindfulness, equanimity, and interdependence into financial advice.

Abacus may be spiritually oriented, but it is also materially thriving. As a certified  for-profit B Corp, the RIA balances profit and purpose by meeting high standards of social performance, transparency, and accountability. It specializes in impact investing and has nearly $4 billion in assets under management and over 70 employees in six offices in California and Philadelphia.

This month the firm marked a new chapter, transitioning leadership to two women in their 30s, Neela Hummel and Mary Beth Storjohann, now Abacus’ co-CEOs.

Sherman and Kessel remain active as advisors and co-founders. They recently sat down with Barron’s Advisor for a wide-ranging conversation.

How did your interest in Buddhism begin?

Spencer Sherman: I’m a little embarrassed to say that it came from a kind of materialist desire. I got my SAT results [in high school], and they weren’t what I wanted. I wandered into the library and there was a book there about how to improve your brain power. The book actually didn’t use the word meditation, but it was trying to put you into alpha wave brain states, using focusing practices.

It worked. My scores drastically improved after doing those practices for about three months. So I saw the benefits. When I got to college there was a course in how different cultures reach higher states of being. There was a daily homework assignment, which was to meditate for 30 minutes a day. That was my introduction to practice.

Brent Kessel: My mom was a yoga teacher so I got exposed to the Hindu side of meditation through her from a young age. She would call it floating on the pink clouds as I laid on my back. The real adult dive into Buddhism began in 2004 for me. I knew that my ambition and drive were creating suffering for me and that there had to be something more. I was in this profession that analyzes finances and helps to provide financial clarity and a sense of financial security. And yet death is certain and we can’t take it with us.

There’s a real paradoxical wisdom to holding both of those truths, that in the relative world we do need money for things, yet we should never lose sight of the truth that money cannot provide any kind of ultimate security or permanence. I heard several teachers at a conference in 2004 and started doing two or three silent meditation retreats a year with one. I also began a daily sitting practice contemplating how I balance those two parts of my life.

Who was the teacher?

Kessel: The first teacher was Adyashanti, and I practiced with him for probably three, four years. And then I became a more dedicated student of a Tibetan Buddhist teacher named Tsoknyi Rinpoche.

Spencer, which teachers influenced you?

Sherman: I’ve been influenced by Sharon Salzberg, Jack Kornfield, Joseph Goldstein, and Sopa Rinpoche. Another teacher that’s been influencing me very much in the last four years or five years is Analayo, a German monastic. He teaches that letting go of the fear of impermanence, of death, and things ending is a way of really embracing and fully living so you’ll gain more presence and be more alive in this moment.

How did you guys meet and how did your mutual affinity for Buddhism, or at least a spiritual orientation, bring you closer together?

Sherman: We were at a workshop in Maui, Hawaii in January 1999 led by George Kinder around life planning and looking at money from other perspectives than just accumulating more of it. After the fire in Philadelphia, I grew my own financial advisory firm and started a rigorous meditation practice to uncover what led me to risk my life for my stuff. Why was I more interested in things over my health? At the workshop I meet this person who has a very similar outlook to mine who has experienced suffering with accumulating money that was not delivering what he expected.

There was this meeting of the minds of how do we create a financial firm that’s not just based on making people more money because that doesn’t necessarily deliver what people really want.  Brent and I started to talk and became friends. We thought, wow, there’s a lot more dimensionality to money than just making more of it. We had very rich conversations about that idea, and that friendship bloomed into a partnership.

How did you envision incorporating Buddhist ideas in a financial advisory practice?

Kessel: The following year we went out to Nebraska to go to a Nazrudin meeting and continued having these conversations about how does one integrate a financial planning practice or an individual’s relationship to money with Buddhist principles of interconnectedness. Dependent origination is one of the key Buddhist concepts that says pretty much everything in the relative world arises dependent upon conditions and upon other things. A big part of the Buddhist inquiry is what is it that isn’t subject to dependent origination? What is that that exists by itself?

I think that the idea of interconnectedness can be applied to investing in really important ways and can be applied to how a client finds the right balance for themselves, between saving for personal security, consuming for enjoyment and experience, and giving for generosity or out of compassion and empathy.

Compassion is one of the core features of the bodhisattva path, of deep Buddhist practice. When it arises, you don’t have to will yourself into philanthropy or do it out of a sense of guilt or because you’re privileged. It just naturally wants to happen once the mind quiets and we’re able to see the truth of our interdependence.

When you decided to start Abacus, how did you incorporate Buddhist teachings?

Kessel: We do not emphasize Buddhist teachings and Buddhist principles, because religion is a touchy subject for a lot of people. It would be like mentioning political affiliations. We’ll talk about interdependence without even using the word interdependence. We might talk about impermanence when we are talking about a client getting more satisfaction from buying a possession versus having an experience.

Abacus gets pegged as the Buddhist financial planning firm, and while Spencer and I are practicing Buddhists, I’d say there’s under 10 [practicing Buddhists] out of our 70-something employees.

It’s never about “Buddhism.” It’s really mindfulness. The Dalai Lama says Buddhism is about kindness. It’s about what’s going to inspire and empower our employees and clients.

Sherman: One of the things that we got clear on in the beginning from our Buddhist practice is this idea of being nonreactive or having equanimity. Not reacting to all the storms, finding a sense of calm within the storm is a powerful teaching of Buddhism.

When it comes to investing, Brent and I were very struck by all the reactivity around the daily movements of the markets. Yet the studies don’t support the idea that tinkering with your portfolio, reacting to the ups and downs, and selling when the markets crash is ever a good idea. And equanimity, one of the core Buddhist principles, is this ability to not react to our thoughts and what we find. So Brett and I felt like, well, we’re not immune to this ourselves as people; we have emotions. So how do we build systems that keep our clients from reacting to the ups and downs, which are inevitable?

Life is full of impermanence, and the markets are full of impermanence, and there’s no strategy that’s going to deliver us this constant high return. It led Brent and I to say, “Well, how do we build a firm that has the structures in place to make sure we all do the right thing, no matter what happens with the markets, that we keep rebalancing and buying the categories that have gone down and trimming the categories that have gone up, which is sort of the opposite of what our instincts tell us?”

Do you see Buddhist practitioners and people who are attracted to Buddhism as a target market? If so, how are you marketing to them?

Kessel: Lots of people in Buddhist circles and meditation and yoga circles have grown up under the ideology that money is either very complex, perhaps mysterious, or something to be avoided. Or that it’s downright evil and creates greed. There’s a lot of mistrust of financial advisory firms, Wall Street in general, or any traditional kinds of investments. I think we’ve learned to speak the language that resonates with people with that set of beliefs or what I call financial archetypes. I don’t think there are very many firms that know that psychological archetype very well.

Do we think there are billions of untapped dollars out there that Abacus can go out and monetize and capitalize on? We don’t talk that way amongst ourselves. Our mission is to expand what’s possible with money and for these folks. They often have a much more limited opportunity set in front of them because of their aversion to money. So we can expand their relationship to money dramatically by getting involved.

I know you advertise in some of the Buddhist publications. Any other marketing strategies that you’ve used in that regard?

Sherman: Well, we do a lot of teaching out there. I teach a course called the “Dharma of Money” at Menlo, which is the organization that is run by [Buddhist scholar] Robert Thurman. I teach the “DNA of Money” at Spirit Rock Meditation Center. I also started teaching for Facebook, which is now Meta, and there we call it “Slow Down and Move Fast.” There are about 5,000 members of the Facebook Mindfulness Club.

How have the principles of the firm affected your approach to impact investing?

Kessel: It has been a major focus of the firm. I’m really glad you asked this question, because impact investing is closely tied to the Buddhist principles of compassion and empathy. And what impact investing really is saying is: “How can we use financial capital to express compassion?” What we’re seeing now is the whole market is turning towards ESG.  But the sad part is that I think it’s much more as a market opportunity. It’s like, “Oh, our clients are asking about this, and if we don’t have something to offer them, they might leave us and go to Abacus.” But if you look under the hood, there’s a whole lot of greenwashing going on.  [Investors] need to really understand when there’s authentic impact and when the DNA of the firm is aligned with these principles or when it’s just a marketing approach.

How does your Buddhist orientation affect your hiring and engagement with employees?

Sherman: We want to cultivate this ability to not be so reactive to what the markets are doing. When a client calls and says, “The sky’s falling. I need to get out of my investments,” how do you affirm that? How do you listen to that and not react to that? I think mindfulness is a great tool, a great skill to cultivate, to work with that. I think that’s fundamental to us—we want all of our team members to have the ability to cultivate a larger presence so that we can hear the subtext of what our clients are saying. And not just go into being an autopilot financial advisor that just says, “OK, you probably want to retire in 20 years at 65 and da, da, da, and you want this and, and here’s your cookie-cutter advice.”

If a client does not already have a spiritual or Buddhist orientation that drew them to the firm, what is your approach regarding the principles that we’ve been talking about?

Sherman: We always let the client be the leader. There’s a sense of what is this client receptive to? What’s going to help them most? There have been times when clients are open to reflection, to me asking questions in nuanced ways. Questions that evoke something more powerful, more true than just the ordinary “Oh, I just want to retire and buy a second home and hang out with my grandkids.”

As Brent alluded to earlier, we’re never pushing any of this stuff or practices on our clients. It’s always a sense of when we can offer our presence to the client and not so much telling the client that they need to start practicing mindfulness. That’s never our thrust, you know?

Kessel: The majority of our clients take something we call our financial archetype quiz. There’s no judgment or hierarchy, it’s just to understand one’s conditioned tendencies around money and then to create more balance. But we don’t say, “Oh, that’s your hungry ghost,” or some other classic Buddhist term.

The beauty of Buddhism and Buddhist practice is that it’s very much about life. For example, we’re all going to die, but very few of us want to contemplate that. Well, in financial planning, you need to contemplate that. We have to talk about your death and what happens to your assets and how much are they likely to be worth at the time of your death.

Sherman: We talk about having enough, about the possibility of letting go of a dependency on the future for financial security. I encourage my clients to focus on finding that security today. Given that even billionaires think they need more, and that needing more lends itself to insecurity and fear, I say that we have to find a way to feel enough with our current situation.

Otherwise, we’re forever cycling between getting more, wanting more, getting more, and wanting more. Which is a life without contentment and ease.


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