The latest online advice platform to hit the market, SheCapital, is looking to carve out a niche in the increasingly crowded robo-advice market by appealing to female investors who in the past have been skeptical of the financial service industry.
"They hear the bad stories before the good stories, and the bad stories are the ones that resonate in female DNA," founder Tina Powell said.
The framework behind SheCapital, which is powered by robo-adviser technology provider Jemstep, is financial literacy, which is why the automated investment service distributes content written by women for women on investment strategies, philosophies and tips.
There will be a tiered cost structure: Clients with $5,000 to $250,000 in assets will be charged 50 basis points; clients with $250,000 to $999,000 will be charged 40 basis points and clients with $1 million or more in assets will be charged 35 basis points. Ms. Powell said 10% of the company's profits will go to charity She's the First, a nonprofit for girls' education.
"We have built a financial practice around serving women," Ms. Powell said. "It is the narrative, it is the client experience … when women do well, women do good."
Ms. Powell, who is director of business management for Beacon Wealth Management, said she decided to start the robo because there are so few firms targeting their services to women.
SheCapital is positioned to act as the stepping stone that many underserved women need to get financial advice.
"They don't need to engage a financial adviser to get an idea of what they want to do," Ms. Powell said.
Some aren't too sure that a robo-adviser is the way to get women more involved in investing, although they appreciate Ms. Powell's efforts.
"Most women have to start somewhere, and if it is friendly enough then I think that might be a good place for them to start," said Cary Carbonaro, a managing director of United Capital Financial Advisors and author of “The Money Queen's Guide: For Women Who Want to Build Wealth and Banish Fear.” But, she added, "with women it's about relationships, and I don't know if the platform would substitute for a relationship."
According to an InvestmentNews survey on women and investing, 34.1% of the 774 female advisers who responded said that their female clients place the most importance on shared values, integrity and trust, while 22.6% said it is listening skills, 20.4% said it was the ability to translate personal needs into a strategy, 13.5% said it was responsiveness and communication skills and 4.6% said it was understanding the investment and financial environment.
Women investors do see their investments differently than men, said Deborah Fox, founder of Fox Financial Planning.
"Women investors are much more sensitive to behavioral aspects of investing — they are much more tuned into 'am I on track?' and 'will I be OK?'" Ms. Fox said. "And they are typically better at focusing on the long term rather than short-term results."
In the same InvestmentNews study, 84.7% of adviser respondents said that their female clients are more focused on long-term planning than on short-term rates of return, compared with their male clients. And 74.2% of advisers said that their female clients are more conservative about making investment decisions than their male counterparts, too.
Though she isn't sure if gender-specific robos will catch on, Ms. Fox said that she is a strong proponent of robos that target a niche, as it allows them to focus on clients with particular needs.
But just targeting women will not work, said Laura Varas, principal of research firm Hearts and Wallets. Instead, the focus of the automated investment platform needs to be narrowed down even more to attract specific personality types by appealing to segments of a female audience. This could include various types of women, like divorcees, widows, breadwinners, younger or older women or even those who have recently married, or recently had children.
"The days of being able to market the 2050 fund are over," Ms. Varas said. "People's age, wealth and even gender do not define what makes them tick."