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Ellevest's Investing Platform Knows How to Speak to Women

Founded by Sallie Krawcheck, a Wall Street vet, the platform understands women's way of investing their money is different than how men do it.

This story appears in the June 2017 issue of Entrepreneur. Subscribe »

Who runs the investing world? Not . A staggering number of financial advisers -- 86 percent, in fact -- are male, most of them older than 50. "If we set out to build a perfectly targeted toward men, we would build the industry as it exists today," says Sallie Krawcheck, a vet and founder and CEO of Ellevest, a female-focused digital investment platform.

Brian Stauffer

Related: How to Start Saving Money Today

To target women, Ellevest operates rather differently. It uses simple information about a woman's life, career and assets to produce a custom investment plan, and addresses the unique concerns facing women. On a practical level, women live longer, so their nest egg -- which is already smaller thanks to the wage gap -- has to stretch further. Traditional models target a return of 75 to 80 percent of one's pre- earnings, but Ellevest aims for 90. "Better to
have a badass retirement -- or if she lives even longer than expected, a cushion," Krawcheck says.

To uncover how women think about money, Ellevest conducted hundreds of hours of research, including surveys and video chats with women across the country. They learned that women prefer to invest toward a specific goal, not simply to outperform, as is the case with men. So Ellevest caters (and curates) its portfolios toward life milestones: opening a business, having kids, buying a home or retiring.

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And while it's widely assumed that women are -averse, Ellevest has found that's not the case. "We're risk-aware," Krawcheck explains. "We want to understand risk. How bad can it get? Women value conservatism in investing more so than they do upside." To that end, Ellevest bakes more down markets into its projections, aiming to have investors reach or surpass their goals in 70 percent of market scenarios, whereas the industry standard is 50 percent. "There are all these myths around women and investing, and they're incorrect," Krawcheck says. "She just wants more information. She's practical. And she wants to get where she's going."

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