Using Mindfulness to Build Your AUM

Ellen Rogin: The conversation today is about how to incorporate more mindfulness into your practice, how to incorporate more than just the numbers in working with your clients.

And our expert today is Spencer Sherman. He is not only deeply practiced in mindfulness and meditation, but he’s the founder of Abacus Wealth Management, a large RIA in the San Francisco area.

Abacus is known for being a values-driven financial consulting firm, managing over 3 billion—with a B—dollars in assets. So Spencer speaks with us from a place of actually having used mindfulness strategies not only make his life better, but to make his business and his work with his clients and his team better.

Spencer has transformed so many people’s lives by helping them have a healthier, stronger relationship with themselves, with their money, and with being effective leaders and achieving financial success on their own terms.

The iceberg: money and emotions

Spencer Sherman: In terms of getting into the practice of mindfulness, what I recognized from my MBA training and from my early years of being a financial advisor is that when it comes to clients and investments, there’s this visible part of the iceberg, what’s above the waterline, and that represents all the mortgages and taxes and investments and insurance and cashflow planning. And all of that is [00:03:00] so important. That’s all that we talk about for the most part, and that’s what we think drives the success.

But what I started noticing among my MBA friends and colleagues and among my clients, is that the people that had all that together, that knew everything about all the numbers, about all the tax issues were not necessarily successful with their finances. And so it occurred to me that there must be something below the waterline.

And what’s below the waterline are our emotions, our fixed beliefs about money. These beliefs that we inherit when we’re three, four or five years of age. And sometimes we’re not even aware of these beliefs.

For instance, I wasn’t aware of a particular belief I had until I was in my twenties. I realized I had a belief that money is more important than anything. That kind of fixed belief is a problem. It’s not a problem if you just hold it loosely, but when it’s held in a fixed way, and you are not aware of it, well, it led me to do some very crazy things with my finances.

So this iceberg metaphor really gave me a much fuller sense and picture of money. It became really exciting to me. I mean, I had a strong psychology background, but I was very strong in math. And I realized the advising profession would be the perfect profession for me because it combines both—and both are so critical. I could even make a case that the emotional intelligence we bring to our finances may be more important than our sophistication with the numbers.

Another unexplored belief

Ellen: I 100% agree. And I had the same awareness when I was in my twenties starting my financial advisory firm. It was so interesting to me how somebody with lots of money could be worried or afraid they’re going to lose it all. And I had a belief that I recognized early in my career—which I’m so grateful I recognized.

You see, I grew up in a traditional household where my mom stayed home and my dad went off to work. Fast forward into my twenties, and I had started my own firm, yet I had this unexamined belief that it was my husband, Steven’s job to make the money. And further, I had a belief that I probably couldn’t even do it—even though I had lots of letters after my name just like he did.

Once I became aware of that, I could go, “Oh, that doesn’t even make sense.”

Sometimes my experience has been, it’s just that easy to get rid of an unaligned belief, just by bringing it to light, to awareness. And sometimes it’s a little bit more tricky. Do you have a process that you recommend for people to start to get at that unexamined thing?

Spencer: As you said, Ellen, the first step is you became aware of this belief you are holding “He has to make the money.” That awareness alone will start to soften this belief. Next, I recommend a compassion practice of holding this belief in a lighter way, rather than trying to get rid of the belief. I find this to be more powerful and healthier than actually trying to eliminate it.

So the belief that money’s more important than anything still lives in my mind, but it’s no longer controlling me. I have awareness of that belief. And just like you said, once you have the awareness that the mind is going to produce a certain belief, you don’t have to follow that train of thought.

The thought no longer controls me when a friend is saying to me, “Hey, Spencer, I want you to invest in my company.” I no longer feel this intense stress, where my thinking goes: “If I don’t invest in my friend’s company, I’m a loser because money’s everything. Maybe I’m even going to lose the friendship, but clearly I’m a loser! He’s showing me the projections and how many millions of dollars I’m going to make and that a hundred thousand is going to turn into $50 million! How could I not do it?”

And then I’m in a place, Ellen, where whether I do it or I don’t do it, it’s horrible! If I do it, I live with the stress of being in this investment that probably isn’t going to do very well, and if I don’t do it, it’s the stress of missing out, the FOMO of missing out on that thing.

And I’ve done that several times, invested in a friend’s company. All them have gone to zero, I have to say. The most important thing is that what drove me to make that decision was not my Wharton education. What drove me is the fixed belief that overrode all the calculus, all that training that I’ve had about what’s a good investment. All that was out the window. I was more allegiant to this belief I had about money being all-important.

So bringing it back to clients—as advisors, if we can understand some of those beliefs that our clients have, if we can really listen to the subtext of what they’re saying and get to those core beliefs, we have an opportunity to really help them in much more profound ways. We have an opportunity to understand why maybe they’re not investing their money the way they should be, why they’re keeping so much cash. I mean, all of that can really help us be much more effective compassionate advisors and create those deeper connections with our clients.

What is a mindfulness practice?

Ellen: So Spencer, when you talk about “a mindfulness practice,” what do you mean by that?

Spencer: Ok, I’m going to confess, I spent many years having a mindfulness practice that was mostly about checking off a box because I want to be a good boy. I want to get straight As. I want to do life perfectly. And if I brush my teeth and do my meditation practice and call my clients on their birthdays, everything will be fine. There’ll be no ups and downs, no volatility, no pain, nobody will die in my life. That was what I was sort of out to do.

And then I realized, wait a second, this mindfulness practice is for real. It’s not about checking off a box, it’s about really doing it. And the word that has been coming up for me is a strange word. It’s not very kind to interrupt another person, but to me, mindfulness is about interrupting ourselves, interrupting those trains of thought, interrupting the ruminations.

And there are so many moments for some of us, definitely for me, where I find myself ruminating. Is this client going to leave? And I’m recirculating that thought for 30 seconds, a minute, five minutes. And that’s when I need to interrupt that pattern as soon as possible.

And the more we do that, the more we open up space in the mind, the more we create new neural pathways, the more likely we are to see a path for that client that’s different than what we had previously thought.

Maybe it’s like, oh, I’m going to figure out something around their financial plan. I’m going to come up with a new option for them, for their financial, for their life or retirement or something that’s much more helpful than just staying in the rumination. So if I had to recommend anything in terms of mindfulness practice is do it every single time you find yourself lost in thought or repeating a pattern that is not helpful for you in the mind.

Good ways to interrupt rumination

Ellen: So what might that practice look like? Let’s say I’m ruminating: “Why haven’t they responded? Why have they ghosted me? Why hasn’t this person followed up?” Or whatever we spin about—what might interrupting that look like? What would I be doing?

Spencer suggests these four techniques:

1. Write it out. There’s a lot of evidence and studies that show the benefit of journaling as soon as you notice yourself in that rumination, take out your phone, set it for three minutes and just write until that bell goes off. Just write. It doesn’t matter what you write. Just write. I’m worried about this client leaving. I’m worried about the markets. Writing will move the thoughts from being lodged in the mind out onto the paper so that you get some perspective, you get some looseness around it.
2. Talk to someone. Another thing you can do is talk to someone, just acknowledge that I’m having this train of thought again.
3. Take action. Another option is to do something like I just mentioned, do something [00:13:30] that might be proactive. What’s the thing that this client might want me to do right now? What can I do about the fact that the markets are going down, for example?
4. Be present. And maybe it’s just being with the feelings. So instead of staying in the rumination, a mindfulness technique is pay attention to the sensations in your body caused by what you are thinking. Move your focus from language to the body. To move from the head to the body is powerful. It is almost a cure practice for when I’m in rumination. If I start focusing on where I feel worry in the body, the physical sensations of worry take me out of worry.

Shame around money

Ellen: Money has such a charge for so many people. There’s fear and shame or regret, worry that people have. How can advisors support their clients in being more grounded and clear?

Spencer: The more we can foster our own sense of equanimity, that sense of balance, the better. Because clients do look to us for that guidance, and we represent the role model for money. Of course financial advisors may have some chaos in their own financial lives; the markets are down or we lose an employee. But the more we can do our own inner work to cultivate that sense of balance, equanamity in that storm, the more we’re sending that message of calm to our clients. So that’s one way to help our clients.

I think another way is to recognize that shame and other difficult feelings around money, that’s universal. Recognize that clients might be feeling shame, for instance, about losing all their money or not growing up with any money. Or that my brother or sister makes 10 times what I make. Any of that is going to cloud the client’s ability to listen to you as a financial advisor.

So to address that, I have changed the way I start meetings. I used to just start my meetings right away, but now I take a little time to make sure that the client is ready to speak about money. I know that they may be walking in with that shame, that fear. So I want to sort of acknowledge that in the beginning of the meeting and give it a little bit of space so that they can bring their full attention, and they’re not sidetracked with something else on their mind like, “Oh my God, I can’t tell him that I just spent all this money on blank.”

So that was a simple thing that I did that has made a big difference for me and the other advisors in the firm: creating that space in the beginning of the meeting and making sure they’re with you. So lessening the talking, increasing the listening, getting curious.

Beginner’s mind and putting the client first

Spencer: There is something called beginner’s mind that I think has been also very potent. Beginner’s mind comes from this Japanese word called Chen, and it’s really about bringing curiosity instead of answers. And that’s not easy for me or for many of us advisors full of answers! We’re full of knowledge and our minds are crowded with answers.

And beginner’s mind is about having a spacious mind. So maybe doing a minute of breathing or mindfulness before you walk into the meeting so you can move yourself into that more spacious, unbiased mindset. And from that place of curiosity, more will get shared by that client. More safety will get created.

Ellen: Do you have an initial prompt question? A client comes in, you haven’t seen them for a while, how do you create that spaciousness, let them download some of those things that are spinning in their mind?

Spencer: Well, let’s say you’re on Zoom. I just say, “Is this time still good for you? Anything you need to handle before we get started?”

Then I ask, “And then how are you feeling about your finances right now? How are you feeling about the last few months since we spoke? Anything that you want to share that you’re having some worry about or some concerns about or difficult feelings about?”

So it’s putting the focus on them. I’m also asking, “Is there any agenda item that we should add? I sent you the agenda last week, but is there anything missing on the agenda that we need to add in?”

And sometimes I have scrapped my own agenda for their agenda. I’ll say, “You know what? We didn’t get to my agenda. Let’s schedule another meeting to do that at another date.”

I used to think my agenda was the most important and now I’m clear it’s their agenda that is most important. And if they want to talk about their worry over their parents spending money, even though there might be some more pressing issues, I’m going to talk about that.