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| Sallie Krawcheck, the former president of the Global Wealth & Investment Management division of Bank of America, speaks during the Reuters Wealth Management Summit in New York in this file photo dated June 3, 2013. |
Women seeking out professional investment advice have never been in a more powerful position. Women now control half of all personal wealth in America — $14 trillion — and are projected to control $22 trillion by the year 2020. Numbers like these have sent traditionally male-dominated financial firms into a frantic scramble to figure out how to tap into this largely underserved market.
They're going to have to move fast. There's a growing number of promising new digital investing platforms that are tailoring their services solely with the needs of female investors in mind. Two of these new platforms are launching this week, including Ellevest, a new venture created by Wall Street powerhouse Sallie Krawcheck. Ellevest (pronounced el-ah-vest) already has an impressive list of backers, including its lead investor, investment research giant Morningstar, which kicked in $8 million of the $10 million the company has raised so far. Allianz Chief Economic Investor Mohamed El-Erian, Mastercard CEO Ajay Banga, and Karen Finerman, president of hedge fund Metropolitan Capital Advisors, are also throwing their weight behind the platform.
Krawcheck's Ellevest joins women-centric investing platform SheCapital and The Daily Worth’sWorth Financial Management, which is also due to launch this week. Each of these platforms is still relatively new, and it’s too soon to tell whether the “for women, by women” approach will resonate with their target audience. Krawcheck says what they share in common is that they aren't buying into the stereotype that women aren't interested in investing.
“The [investment] industry speaks a different language than women,” Krawcheck told Yahoo Finance. “Women don’t invest because we’re not providing them with an experience that speaks to them.”
According to a recent study by investment manager BlackRock, men are more likely to say they consider themselves “investors” and enjoy investing than women. Women overall are still less likely to invest than men, despite research showing women live longer and will need to save more to fund longer retirements. This investing gap has proven to be as stubborn to shrink as the wage gap, persisting even as women have emerged as the primary breadwinner in 40% of homes in the U.S. today and better savers than men.
"If we really want to close the gender investment gap we need to rethink [how we are giving advice]," Krawcheck says.
Krawcheck, who has held leadership roles at Bank of America and Citigroup, is no stranger to the gender-based investing space. In 2014, she launched the first-ever gender-specific mutual fund, Pax Ellevate Global Women’s Index Fund (PXWEX), which only invests in companies with women in key leadership roles (current top holdings include Microsoft, Yahoo Finance parent company Yahoo, Inc. and Procter & Gamble).
By: Mandi Woodruff (Yahoo).
Photo: Shannon Stapleton (Reuters).
Review: Emerging Market Formulations &
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