Chief executive and co-founder, Ellevest
Sallie Krawcheck didn't invent the idea of a robo-advice platform for women, but if anyone could make it work, she could. The 52-year-old chief executive and co-founder of the digital platform Ellevest and chair of the global professional women's network Ellevate Network built a career by taking risks and following through on her beliefs.
At Sanford C. Bernstein & Co., where she started as an equity analyst and worked her way up to chairwoman and CEO, she was known for going against the grain of Wall Street.
While at Citigroup, where she became CEO of the wealth management business, Ms. Krawcheck was named Fortune's Most Influential Person Under the Age of 40.
From there, she spent two years as head of wealth management at Bank of America Merrill Lynch. But since 2013, her focus has been squarely on the advancement of women, especially when it comes to helping them take control of their finances.
Jeff Benjamin: You describe yourself as a financial feminist. What does that mean?
Sallie Krawcheck: A financial feminist is an individual who is in financial control and therefore puts herself in a position where she can have a positive impact on the world around her, including her family, society and the economy. If you're a white woman, you make 78 cents on the dollar, compared to a man. If you're a woman of color it's much less. It's about closing those money gaps, thoughtfully, and then putting yourself in a position where you can have a positive impact on the world.
JB: What does it mean to invest like a woman?
SK: It means all good things. At Ellevest, it is based on now thousands of hours of research we have done with women to build this platform. It demonstrates itself in specific ways. We take into account in our algorithms the fact that women live longer than men. We take into account the fact that women's salaries unfortunately peak sooner than men, that women earn less than men, that women take more career breaks than men.
But we also take into account things they've been looking for that the industry hasn't been providing them, such as true goals-based investing. We talk to them about risk, not in standard deviation and statistical terms, but in a, Hey, you only have a 40% chance now of reaching your goals, rather than a 70% chance."
JB: With the strong focus on women, does Ellevest exclude men?
SK: Not at all. I love to joke, though it's true, if you are a gentleman, you can invest with Ellevest. But when you select your gender as you go through the algorithm, the program has you earning more money and kills you sooner.
JB: Has the financial services industry historically ignored the female investor, and is that still the case?
SK: It was not so long ago that in certain industry publications, they would refer to women as a niche market. We in the industry didn't do as good a job of serving them as we could have; therefore, women were not investing as much as men have been. Women were keeping more of their money in the bank, which hurt them. While there were any number of investing-for-women initiatives, they never quite hit the mark because they were really viewed as marketing initiatives without addressing the underlying product characteristics.
JB: To what do you attribute your success in corporate America?
SK: Hard work is always part of it. I always worked very hard. I always loved my job, and I think that matters a lot. And I always took on some degree of risk.
When I was a research analyst, I used to have negative calls on companies when it just wasn't done. When I was director of research at Sanford Bernstein, I took us out of the investment banking business when no one else was doing it, which felt like a losing bet up until the point that we won big on it by having a different strategy than the industry.
JB: What drives your passion for innovation in the financial services industry?
SK: I remember very early in my career being told by a more senior individual that in financial services you could make a lot of money by just staying in the pack. I remember my reaction being, well, what's the fun of that? First of all, I got into the business to try and have an impact on the American family. If you're doing the same thing everyone else is doing, can you have as much of an impact as if you try to push the boundaries a bit?
JB: You were an early advocate of fiduciary standards for the brokerage industry. What are your thoughts on the state of the Department of Labor's fiduciary rule?
SK: My thinking hasn't changed much. I believe the industry should be at one standard. It should be a high standard. And it should be the same regardless of whether you're an RIA, broker-dealer, 401(k) adviser, etc. The current state of affairs is confusing to our clients, and frankly it's confusing to many in the industry. It is absolutely as clear as mud.
I really don't worry about the industry figuring out how to be profitable. If we change the standards, the individuals in the industry are quite smart and if we are delivering value to our clients, we will figure out a way to run profitable businesses.
JB: Do you have some advice for women who are at the beginning of their careers?
SK: It comes back to hard work. There's a lot of attention these days to gender discrimination in the workforce. You cannot open the newspaper without reading about it. I think it's a healthy discussion that's long overdue. I'm not happy that it's happening, but I'm pleased to see that we are shining some light on it. And I'm hopeful that it will make all industries better places for not just women but for everybody to work.