In the old days, if you were a woman who wanted to earn a return on your money you had to INvest but these days you can ELLEvest.
Sallie Krawcheck, the CEO and co-founder of Ellevest, built the robo-advisor to serve the unique financial needs of women.
As the former President of the Global Wealth & Investment Management division of Bank of America, and one of the most revered women on Wall Street, Sallie is perhaps one of the most qualified women to understand and launch a robo-advisor targeting women.
Skeptics may dismissively comment that a robo-advisor for women is a marketing gimmick but they would be wrong.
When you look under the hood, you find Ellevest is a robo-advisor that uniquely understands the average financial arc of a women’s lives and caters to it more so than its rivals.
The facts show that a woman’s earnings peak sooner than a man’s and this has significant consequences when managing money for women.
Unlike a man, who may be more risk-seeking longer into their careers, women may need to be more risk averse earlier in their lives, and that impacts portfolio allocations and capacity for risk.
Most financial advisors think about client risk based on risk tolerance metrics but Ellevest focuses on capacity for risk instead.
As a robo-advisor with ambitions to take on industry leaders like Betterment, Personal Capital, and Wealthfront, Ellevest has a competitive fee schedule in line with its rivals.
And for high net worth individuals, it also provides a private wealth management service, though you will need to have 7-figures or more to qualify.
Another feature that makes Ellevest attractive is its tax minimization strategy, which differs from tax-loss harvesting but still takes into account strategies practiced by other robo-advisors. For example, tax-efficient assets are placed into tax-inefficient accounts and vice versa.
And while Ellevest targets women, it serves men equally well too. By distinguishing between the two genders and their respective career earnings trajectories, Ellevest is arguably positioned to serve both men and women better than its competitors.
So far, Ellevest has raised tens of millions of dollars from venture capitalists who subscribe to its vision but whether the gender-focused robo-advisor can make a dent in the highly competitive world of robo-advisors and steal market share from the established leaders remains to be seen.
Without doubt, the company has made a splash and created waves in the investment management industry. Not only by focusing on gender but also by learning from the trials and tribulations of its competitors and launching a service that clients want: automated investment management plus human advice.
Will it be enough to claw its way to the top of the industry? We will see but for now you can be sure Ellevest has the leaders in its sights and the leaders have Ellevest firmly in view in their rear-view mirrors.
Also on Market Tamer…
Follow Us on Facebook