How Do You ‘Invest Like a Woman’? Sallie Krawcheck Shows You With Ellevest’s First Ad

Taking on male-dominated financial services

You've heard about all sorts of gaps that put women at a social disadvantage—like the wage gap and thigh gap, not to mention the pink tax. But have you heard of the investment gap?

That's the gap that Sallie Krawcheck, Bank of America's former global wealth and investment management president—and one of the biggest female names on Wall Street—hopes to address with her new company, Ellevest.

Ellevest is a robo-advisory that hinges on the notion that current investment offerings are poorly tailored to the specific needs of women: We live longer, our salaries peak faster, we're more likely to get smaller raises and take career breaks, and—topping things off!—we're also more risk-sensitive.

Much of this is outlined in "Invest Like a Woman," a debut ad created by Revere (a DJE Holdings Company) that launched Tuesday: 

Krawcheck's been laying down the bricks for Ellevest for a while. In 2013, she purchased 85 Broads, a women's networking group and former Goldman Sachs alumnae network, and relaunched it as the Ellevate Network in 2014, using it to build an index fund for "the 400 top-rated companies in the world for advancing women." Today it also offers leadership training, educational resources and networking services. 

And she's historically been resistant to what she calls the "pink it and shrink it" approach for woman-focused business (think "beautifully smooth" Bic pens, or lady cars with eyeliner-inspired headlights).

"Typically, my reaction to 'for-women' businesses has been to bristle a bit. And to immediately assume that it must mean a 'pink it and shrink it' approach, heavy on 'financial education' of the remedial kind. This is despite the research that shows that women are as good, or better, investors than men across the spectrum, whether as hedge fund investors, as mutual fund investors or as individual investors," Krawcheck wrote in 2015's "How I Got My Business Idea" on LinkedIn, where she explains how she decided to launch Ellevest.

Ellevest itself launched in mid-2016, during TechCrunch Disrupt New York. Krawcheck, who acts as co-founder and CEO, raised $10 million in Series A funding for the company, which includes Andera founder Charlie Kroll as COO and Sylvia Kwan as chief investment officer, as well as people who've worked at Vogue.com, Thrillist, Weight Watchers and a number of fintech startups.

It also boasts a list of impressive supporters, including Venus Williams (who talks about it here), Mellody Hobson, venture capitalists Theresia Gouw and Sonja Perkins, and more—who poured an additional $9 million into the company. 

After watching the ad, we opened an Ellevest account to gauge how it works. The platform lets you define an investment strategy based on goals—like saving for a home or office, retirement, a trip or your kids' education. It provides recommendations for how much to auto-invest each month, how long it will take to reach your goal, and tells you plainly whether you're on or off track.

The cost for managing your portfolio is about 0.5% of your balance per year (not including ETF fees).

The service obviously hasn't been around for very long, but it's already made headlines outside of Krrawcheck's interviews. Stories range from pat explanations about how Ellevest works to whether it actually makes sense for women.

It's probably hard to know the answer to that unless you've used Ellevest for a while, and too little time has passed for anyone to really make that call. But we did talk to Krawcheck about her platform and its positioning. Check the interview out below. 

AdFreak: Tell us why women need a woman-oriented investment strategy.

Sallie Krawcheck: Actually, for years, I argued that women did not need their own investing platform. I had seen too many marketing programs for women that talked down to them, so I thought the concept was vaguely insulting. But the very fact that the gender investing gap exists—and that it can cost professional women hundreds of thousands, or even millions—of dollars over their lives is clear evidence that something is "broken" and something different is needed.

Dig a little deeper, and you'll note that the investing industry and most of its tools have been created by men, for men. So the "gender-neutral" investment industry implicitly defaulted to men's product preferences and men's financial characteristics—trading to outperform a market index, for example, or investing media that strongly resembles sports media. Another one: The industry symbol is a bull—a phallic symbol if one ever existed.

At Ellevest, our "for women" is not just a marketing angle. Instead, we calculate financial goal targets based on women's specific characteristics, such as their longer lifespans for retirement (really important) and a salary that tends to peak sooner than men's (also important … and frustrating).

Other features are based on the hundreds of hours we conducted to "co-create" Ellevest with professional women: She wants to make trade-offs among her financial goals (like changing the timeline on each or how much she contributes, and having the others adjust). She also wanted a highly customized investment portfolio, constructed for her, rather than the "have one of five investment portfolios" of the first generation digital advisors.

Can you share a personal story that illuminates this need?