A $ 4.4 billion RIA in Los Angeles made a very 2021 decision to appoint two women, both 37, as co-CEOs for a very old reason – accelerated growth – following previous diversity moves genres
Abacus Wealth Partners has quadrupled its assets under management in six years in tangible correlation with its progressive recruitment strategy
Note from Brooke: As a jaded editor, I asked Oisin to interview the co-CEO protagonists in this article to see if having two people in a position prototypically held by one person reflects a sort of indecision in hiring or a complete lack of confidence in a person. Beth Storjohann and Neela Hummel’s responses were solid and believable, but I also thought they kindly missed the opportunity to quickly answer a sharp question. Most of the CEO’s seats are held by men. We know that one or two of us men have big egos, which may explain why putting two of us in the same CEO position can be more difficult than having two women. I guess from what we can see from the culture of this company, power sharing won’t be a big deal. Indeed, as they say, two heads will simply be better than one.
Abacus Wealth Partners just appointed two female co-CEOs, but their joint rise in fact underestimates the female-led cultural shift that has sent the company on a steep growth curve over the past decade.
The Los Angeles RIA made the unusual decision on Nov. 18 to appoint former Morgan Stanley Rep. Mary Beth Storjohann and former intern Neela Hummel, both 37, to the top post.
Their promotions are just the icing on an offer launched in 2017 to put women at the forefront of the business.
âOnce we started wearing our values ââon our sleeves, our growth took off,â said outgoing CEO and co-founder of Abacus, Brent Kessel, in a statement. Release.
âI am touched by the opportunity,â Hummel said in a statement.
“Having two women at the head of a $ 4.4 billion project [in managed assets] AIR is a big problem for our industry. “
Even with its strong track record in hiring and promoting women, Abacus, like many RIAs, is a almost exclusively white company – a fact that the company intends to change, following a recent commitment to diversify.
“White silence has been a privilege and it must end. As a predominantly white company in a predominantly white profession, we recognize that more action on our part is needed,” the company tweeted on June 5. See: How tweets from one RIA highlighted the obvious – the lack of diversity in the predominantly white RIA industry – and opened the door to a dialogue on creating more opportunities for minorities.
Abacus has already changed its hiring procedures, removing photos and names during the application process, but it’s far from perfect, says Danielle Onesto, coordinator of Abacus Marketing, Events and Sales Operations, by E-mail.
âCompared to the rest of our industry, we believe we’ve made huge strides in gender diversity and a little bit on ethnic diversity at Abacus. But that’s not enough: we have a long way to go, âshe adds.
Beyond that, neither Storjohann nor Hummel expect to upset the basket of apples by introducing too many changes as co-CEOs, they explain.
Rather, they expect the business to change as it grows.
âOur initial and overarching goals are to develop clear communications, refine the organizational structure of the company and refine our strategic plan to ensure it is aligned with our broader goals of diversity, equality and inclusion, âthey said.
Abacus has also hired a new M&A consultant, and the company intends to buy an RIA in “liberal-leaning” cities like Austin, Denver or Portland, Storjohann said. Barron.
Storjohann and Hummel’s approach to evolution, not revolution, struck a chord among its senior executives, according to Abacus partner Gabe Brenner, who worked with the company’s board of directors to identify the Kessel’s replacement.
âIn many ways, the selection [Storjohann] and [Hummel] sharing this role was a natural progression of the entrepreneurial and values-aligned corporate culture.
“Together they are really ‘superhuman’ and it is so important to have their voice at the helm,” he said in the statement.
Their work to bring diversity to the fore has made them obvious heirs as well, given Abacus’ desire to continue to improve its “ethical” approach, according to Kessel.
“[They] are truly servant leaders who know how to get the best out of our people, our business and, frankly, our industry. I’m inspired that they believe in this vision so strongly that they’ve taken on this role to execute it, and I can’t wait to see where they take the business, âhe said.
The unconventional decision to appoint two co-CEOs did not reflect indecision or the lack of qualified candidates, Storjohann and Hummel say in a joint response, via email.
“Choosing co-CEOs is not about two people doing one person’s job or indecision [by the firm] in choosing a CEO, âthey write.
âIt was a very strategic decision from Abacus, and although there were a number of qualified individual candidates that the board considered, they decided to go in this direction for very clear reasons. “
Rather, the two women see the shared title as a case where two heads are better than one. They can collaborate in areas of mutual competence and take a step back in circumstances where understanding of the issue goes beyond the other.
They also argue that joint leadership increases the bandwidth for strategizing, reduces the drag of juggling management and business development, and reduces the risk of burnout.
The couple will continue to manage many of their former roles as Marketing Director (Storjohann) and Advisory Director (Hummel). No word that these tasks will be separated later.
Hummel, formerly an advisory director, is also the architect of the company’s four-year-old initiative, known as the Abacus Woman’s Initiative, or Abacus fraternity– to supervise, train and encourage women advisers within the firm.
Storjohann and Hummell’s rise to senior positions at Abacus follows Kessel’s decision to step down and focus on expanding the company’s environmental, social and governance (ESG) investment activities. .
Kessel will remain in the firm full-time, and he intends to set aside some of his time to mentor young advisers, according to the firm.
In a typically male industry, Abacus stands out for the opportunity it offers to women. Some 64%, or 47 of 74 support staff, and 58%, or 26 of 45 counselors, identify as women.
A subsection of the company’s website also highlights the need for a “separate movement” among RIAs to tailor advice specifically to women, noting that women control 51%, or $ 14 trillion, of the wealth. national.
Kessel believes there is a correlation between the growth of Abacus Wealth Partners’ female ranks and its assets under management, now valued at $ 4.4 billion.
It was absolutely the right choice, says Onestol.
âThere are countless studies that demonstrate higher returns from companies with diverse leadership compared to those that are homogeneous. This has been a goal of our management team for many years, âshe says.
In 2011, the then two-year-old RIA had roughly $ 600 million under management, a figure that rose to $ 1.4 billion in 2016, an increase of 133%, or roughly $ 160 million per year. on average. From 2016 to this year, assets under management reached $ 4.4 billion, an increase of 214%, or an average of $ 600 million per year.
The figures include both new net assets and market appreciation.
In contrast, the S&P 500, as measured by exchange-traded fund (ETF) SPY, rose 138%, from $ 193 to $ 459, over the same 10-year period.
Initially, Storjohann and Hummel planned to apply separately to become CEOs of Abacus. But they finally agreed to apply jointly because of their “complementary” skills, they explain.
âApplying for the job together was a ‘one plus one equals three’ decision. We’re better together and Abacus is better with both of us, âthey say.
“We are already co-leading in many ways; collaborating, seeking feedback and drawing on each other’s expertise. This structure allows the company to continue to benefit from the momentum with a broader scope,” add -they.
Storjohann will focus primarily on business strategy and communications; Hummel will focus on training advisors and improving the company’s customer service, the statement said.
The company is used to taking a different approach than most RIAs, given that Kessel and his co-founder Spencer Sherman are both practicing Buddhists, and registered company B Corp has a “new generation” vibe, Storjohann told Barron’s.
B Corp claims to balance the profit motive with a kind of âdo no harmâ ethic.
Indeed, all Abacus staff meetings begin with one to three minutes of silence, his office includes a meditation room, and Sherman broadcasts a âMoney Meditationsâ podcast, which includes mindful breathing exercises, reports Barron.
Storjohann joined Abacus as a partner and chief marketing officer in March 2019, after spending several years working at an online RIA, Workable Wealth, which she founded in 2013 and then sold before joining Abacus. She started working as a consultant in 2007 at Morgan Stanley.
Hummel joined Abacus in 2009 as an intern, after two years as a content manager for a Los Angeles startup, which she joined after graduating from the University of California. She obtained certification in financial planning in 2010.
In addition to focusing on female clients, Abacus also advises a number of National Football League and National Basketball Association players. See: The NFL Players Association is raising the bar for financial advisers as more RIAs adapt to tackle the bottom lines of underserved sports stars.