The gender pay gap — the fact that women earn less than men in virtually every occupation — is an oft-repeated challenge in the modern workforce. It’s been widely reported that women are paid 80 percent of what men are paid, the gender pay gap is even worse for mothers and women of color and that this 20 percent difference won’t close until 2152.
What is not often discussed, however, is the gender investment gap — the fact that women are less likely to invest their money in the stock market than men.
New York-based fintech startup, Ellevest, wants to change that.
Sallie Krawcheck, a former titan of finance at companies like Citigroup and Bank of America, launched the robo-advisor to help women secure their financial futures. She founded the platform with Charlie Kroll, a technology veteran who previously founded fintech company, Andera.
“Ellevest takes women's unique life attributes into consideration — longer lifespans, different salary curves, more frequent career breaks,” said Kroll. “These things can make a huge difference when planning for the long term. We're also totally goals-based, so whether the market is up or down, we keep the focus on what clients need to do to keep their plans on track.”
While robo advisors like Betterment and Wealthfront have led the way in the automated investing space in recent years, Ellevest differentiates itself in its driving mission to take the behavioral differences between women and men into account when it comes to investing.
For example, women's salaries tend to peak earlier, and women are also more likely to take career breaks throughout their lifetime. Women also view investing as a means to an end, such as buying property, whereas men view making money as an end goal in itself. As such, ‘gender neutral’ investing doesn’t serve women an advantage in the long-term, especially when it comes to the power of compounding.
“It's interesting, what we found in our research is that women tend to underestimate how much they know about investing, and men tend to overestimate how much they know, and in reality we all basically know the same,” said Kroll. “Everyone could use more financial education, but our clients tell us that as long as they're on track for achieving their goals, they're fine leaving the investing details to us.”
While Ellevest’s platform is designed to combat the shortfalls of financial investing from a gender standpoint, Kroll said the company was not founded to exclude men. Rather, on a basic level, Ellevest’s mission is to include and empower women in a sector symbolized by a charging bull and where overt ‘bro talk’ pervades.
Though the company couldn’t share specific numbers, Kroll said Ellevest has already garnered ‘tens of thousands’ of users to date.
The company has raised $19 million in venture capital over the past year, with notable investments from Morningstar, Aspect Ventures and Venus Williams, to name a few.