Wall Street veteran Sallie Krawcheck is making closing the investment gap her mission with digital investment startup Ellevest. And while the pay gap may be in the spotlight right now, Krawcheck warns that the gender investing gap can have an even bigger impact for women over their lifetimes.
"It's important because it's important for our economy and society," says Krawcheck of getting women to invest at the same level as men. "When women are financially stronger, it's not just good for them, it's good for their families, it puts money into the economy, the market — it's good for everyone."
Wall Street has failed to serve women investors, Krawcheck says, noting that many financial institutions have been unsuccessful in their attempts to draw in women.
"They've seen it as a marketing problem. 'Gee, we just need to market better to these women,'" says Krawcheck.
"What we did at Ellevest, different from anyone, is we changed the underlying product," she says. "Our product, our investing algorithm, which has a patent pending on it, takes into account that women live longer, their salaries unfortunately peak sooner.
"And then there are a bunch of other subtle things. Women aren't driven by or thrilled by outperforming the market. They're much more excited about, 'Can I meet my goal?'"
Ellevest has been growing its assets under management, as well as its investor numbers, by double digit percentages month over month. Krawcheck says that it doesn't hurt that there's a wave of women realizing anew that money is power.
"One thing that's united the women, that has come up with this #metoo moment is not that [the women] have been financially independent, but they've been financially stable," she says, emphasizing that many of the women who have spoken up have financial resources.
Krawcheck came under fire recently for pointing out that of the 46 advisors who were recently made managing director at Morgan Stanley, just three of them are women. She says she simply asked a rhetorical question to her followers on LinkedIn, wondering "#Wherearethewomen?" The comment drew over a million views and hundreds and hundreds of comments, some praising her for noting the discrepancy, and some slamming her, saying that the most qualified candidates are promoted.
She shrugs off the criticism she drew for the comment, saying it shows an increasing awareness of the gender imbalance, and that it's time to move from thinking to taking action. She cites Gloria Steinem's argument that, "Power can be taken, but not given. The process of taking is empowerment in itself."
"I don't think anybody needs to think about it any more," says Krawcheck. "Thinking about it, waiting for the pipeline to get it right, etc. The change comes from individuals Iike me to start businesses that target underserved parts of the market. And I love that our part of the market is 51 percent of the population."
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