Ya know, I’m of the “woman” persuasion and I really struggle with products that are set up to differentiate the same thing with a marketing spin that is supposed to win me over because it’s pink or green or feminist or whatever. Yet, we all know that men are different than women. And you are welcome for that profound insight. So when Sallie Krawcheck launched Ellevest – a robo-advisor for women – I felt skeptical, despite her impressive Wall Street resume’.
I also remember reporting on a site called SheCapital, back when we first launched in July 2016, that went under after raising only $1.3M in assets. Yet Krawcheck’s Ellevest appears to be gaining traction, and garnering positive press, and they appear very committed to marketing their product based on research from women with the intention to tailor their offering to women’s investing needs. So let’s see how this one goes. We still believe a whole lotta robos are going to go out of business once they run out of VC cash, as their compressed fees require significantly more AUM just to break even. Still, we love fintech innovation and we’re rooting for Ellevest. We’ll wait on the sidelines and see where this one goes.
(Cindy Taylor, Publisher)
“Sign up with an asset allocation service or hire a new financial advisor and you’re likely to be presented with a questionnaire asking how much risk you’re willing to take. Not so at Ellevest, a new “robo” investing site designed explicitly for women.
“No one really knows their risk tolerance,” CEO and cofounder Sallie Krawcheck declares. Yet men, she says, will answer that they’re ready to take average or above-average risk, while “women will stop, say they are going to research it, then you never hear from them again. It really stops them cold.”
That observation–based on Ellevest’s own research and supported by academic findings that women are less willing to guess about consequential matters–wouldn’t seem by itself to warrant a separate investing platform just for women. But Krawcheck and her big-name backers are betting that such behavioral insights, combined with women’s longer lives, lower earnings and distaste for Wall Street, will create a demand for the service, which opened to the general public in November.
At Ellevest, for a fee of 0.5% of assets a year, a woman gets savings plans and individualized portfolios of low-cost ETFs matched to distinct goals such as retirement, a home purchase or having a child. While that’s half what a real human advisor would charge, it’s twice the typical fee at Betterment, the largest independent robo-advisor. A second robo designed for women, WorthFM, opened to the public in February. It also charges 0.5%.
Krawcheck, 52, is a key part of Ellevest’s branding. For more than a decade, she held a series of high-profile Wall Street jobs, running Sanford C. Bernstein, Smith Barney, Citi Wealth Management and finally Merrill Lynch, with its mostly male army of 15,000 brokers. After being squeezed out of Merrill in a 2011 reorganization by parent Bank of America, she reinvented herself as a champion for women. In 2013, she purchased 85 Broads, which runs networking programs for business and professional women, renaming it Ellevate Network.
The separate Ellevest site hits the hot buttons, promoting itself with a “Money is power” slogan and a #FinancialFeminist hashtag. Near its Manhattan headquarters, it bought phone booth ads featuring a silhouette of President Donald Trump and the come on: “Women of New York: Cover your a$$.”Read Full Article at Forbes