Sallie Krawcheck's women-focused robo, Ellevest, officially launches

Former Merrill and Citi chief executive says the digital adviser answers womens' investing needs

May 11, 2016 @ 8:00 am

By Alessandra Malito

Sallie Krawcheck launched her women-focused robo-adviser Ellevest on Wednesday, when the platform officially began accepting clients.

The online automated investment service, which raised $10 million in fundraising led by Morningstar in September, takes into account a woman's salary curve, the fact that she may live longer than a man, the way she views risk and her goals — which could be anything from buying a home to starting a business. The former Merrill Lynch and Citi chief executive said the new automated platform offers more targeted services for women than what the industry currently has.

"A lot of firms will say we have a women's initiative, but in my experience, a lot of them solve the problem of how do we market to women, not how do we better serve them," Ms. Krawcheck said.

The robo, which charges 50 basis points, asks its clients for general information, including age, location and salary, and has four patents pending, including algorithms that show trade-offs and prioritization of goals and reaching out to clients when their chances of hitting the mark have fallen. It also models portfolios to project a 70% or greater chance that their goals will be met — unlike some other platforms that show a lower threshold, she said.

"We built in conservatism because she tells us not that she's more risk averse but that she's risk aware," Ms. Krawcheck said.

The service markets itself with the tag line "no jargon, no 'playing' stocks for sport, no patronizing — you got this," and targets the growing market for female clients.

Men and women differ when it comes to investing, an InvestmentNews survey found. When it comes to top financial concerns, 80% of women said it was running out of money whereas 76% of men it was investment returns. The survey found more women were focused on long-term planning than short-term rates of returns, more conservative about investment decisions, more risk averse and took more time to make investment decisions. On the contrary, they were not more aware of how much they need to retire comfortably or expressing concern during periods of market volatility, compared to male clients.

Ellevest is not the first digital adviser focused on women — in fact, there are three others that launched last year. SheCapital, which highlights content written by women for women, Women Investing Now, a financial planning service for women who want to manage their money, and WorthFM, which has accounts for saving, investing and retirement.

As for if this is another robo versus human-adviser ripple in the industry, Ms. Krawcheck said it "is not against anybody, it is with everybody."

"There are a lot of financial advisers that do a fantastic job for women. I know many of them, but the facts are the facts," she said. "There are so many businesses that implicitly or explicitly target men. There can be lots of businesses that serve women."


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