Sallie Krawcheck announces funding for launch of women-focused robo-adviser

Concept of gender-specific automated investment service takes off with the second of its kind just a month after the first launched

Sep 28, 2015 @ 12:01 am

By Alessandra Malito

Sallie Krawcheck, chairwoman of Pax Ellevate Management and Ellevate Network is launching a robo-adviser targeted to women, Ellevest.

The automated investment platform, which is geared toward women investors, is slated to launch in early 2016. The announcement comes a month after the first gender-specific robo, SheCapital, was announced. Ellevest has already raised $10 million in its Series A funding round led by Morningstar.

Charlie Kroll, the former chief executive and founder of Andera, a client acquisition technology provider in the financial services industry, will work alongside Ms. Krawcheck as Ellevest's co-founder.

Mr. Kroll was not available for comment.

“It's time to turn our attention to another gender gap: the investing gap,” Ms. Krawcheck said in an email.

"It's time to give women an investing experience built specifically for them," she continued. "Ellevest will be unlike anything else out there and will empower women to take financial control of their lives."

Prior to her position at Ellevate, Ms. Krawcheck was the president of global wealth and investment management at Bank of America, as well as the chief executive of Smith Barney and, before that, Sanford Bernstein. She will continue in her role at Ellevate Network while at the helm of Ellevest.

SheCapital, which was founded by Tina Powell, managing member and director of business management at Beacon Wealth Management in Hackensack, N.J., plans to attract women investors to its platform with content written by women, for women. Topics for posts will include investment strategies, philosophies and best-practice tips.

Ms. Powell said she was thrilled that Ms. Krawcheck was also entering the market with a focus on the wants and needs of women.

“Clearly there is a gap in the market for women investors,” she said. “And it's becoming increasingly more evident to the rest of the advising community that the time is now to focus attention on empowering women to build their wealth.

“This is more than a niche — it is a movement,” she added.


April Rudin, founder of The Rudin Group, a marketing consultancy for financial services firms, said having a niche-focused brand and targeted marketing strategy is a great idea, but there has to be more to the platform than an appealing presentation for it to succeed as a woman-focused offering.

"I am not sure that the algorithm itself can be customized," she said. "It's all about positioning everything around the advice that will appeal to women more than men."

She does think more niche robos are likely.

"Imitation is the best form of flattery," Ms. Rudin said.

Some think that perhaps entrepreneurs looking to get into the automated investment business should consider other target demographics as well.

Kyle Pettigrove, a financial adviser with the Wiley Group in West Conshohocken, Penn., said that one audience with potential would be students, since many prefer passive learning and are quick to pick up digital interfaces.

Such a robo-adviser would also be able to focus on relevant financial issues, such as student debt and how to pay it off more effectively, as well as helping students to identify other real-life goals, setting up an IRA or managing a 401(k).

A key to success for any robo-adviser is providing clients with a more personal experience, Mr. Pettigrove said. That's typically a strong suit of human advisers.

"[Niche robo-advisers] seem counter-intuitive," he said. "The traditional robo business model is low cost, low service, whereas in an industry where costs are higher on average [to work with a human adviser], what you're getting is personal attention and personalization to your financial needs.

"Robo-advisers will have a tough time ever duplicating that."


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