Ellevest: Investing for women in a man’s world

Not content with investments built “by men, for men”, Sallie Krawcheck has launched Ellevest, a new financial advice FinTech catering for the needs of women.

Former executive at Citi Group and Bank of America, Sallie Krawcheck, has launched a new robo-advisory FinTech catering for the unique needs of women: Ellevest.

It’s hard not to love the key message of this financial advice platform:

“No jargon. No “playing” stocks for sport. No patronizing. You got this.”

How the Ellevest investment platform works

Ellevest takes into account a woman’s salary expectations, career breaks, and our longer lifetime. (On average, women live to 84.4 years, while men live to 80.3 years (ABS, 2015). That’s years longer that we need our super to last if we don’t want to be dependent on the Age Pension.)

The Ellevest platform operates from each woman’s individual investment goals, rather than only using a portfolio-performance indicator.

These financial portfolios are comprised of ETFs (exchange-traded funds) based on the user’s timeline and risk tolerance. The platform directs users’ investments into asset classes with a maximum risk band of 60-80% “risky” assets, recognising that the average female investor is generally risk-averse.

The website’s resource centre is packed with information female investors need to know, from money cheat sheets to recovering after a career break.

An innovative solution for an old problem

Krawcheck had what she calls a “head-slapping moment” when she realised the investing industry has been designed and run “by men, for men” – which has historically kept women from achieving financial goals. She has made it her life’s mission to empower women and get their finances invested in their real goals, and her work has made her one of Fast Company‘s “Most Creative People in Business”.

By September 2015, Krawcheck had raised $10 million in backing from an A-list of investors, including the Chief Economic Adviser at Allianz, the CEO and President of MasterCard, and the Former President of Credit Suisse First Boston.

The May 2016 launch of this service saw Ellevest muscle into territory occupied by the new breed of wealth management firms, such as Betterment and Wealthfront. Ellevest may be slightly more expensive than its direct competitors, having 0.5% management fees, but it still provides more value than traditional wealth managers charging 1.5% p.a. or more.

Ellevest’s investment recommendations help investors reach their goal in 70% of market scenarios, while other advisors only aim for a 50% success rate.

Four patents have been filed by Ellevest already for their investment platform and market simulations, and Krawcheck partnered with tech entrepreneur Charlie Kroll to create the innovative Ellevest platform.

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It’s also important to note that ETFs are considered by ASIC to be complex financial products. Some are more complex and risky than others. For more information on ETFs and risks associated with them, see ASIC’s Moneysmart website at https://www.moneysmart.gov.au/investing/complex-investments/exchange-traded-products

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