Financial app made for women has wide appeal
Alma Aguilar, who works for a cloud-storage software firm in Austin, recently asked me what I thought about Ellevest.
Aguilar had heard about the woman-oriented robo-advising software service after following co-founder Sallie Krawcheck’s short video offerings, “Money in 60 Seconds.” Aguilar, married and the mother of a 1-year-old, wondered if she should branch out her investing beyond the 401(k) retirement plan she contributes to at work.
I confessed that I’d never heard of Ellevest.
The app has been growing and evolving since 2016. For those looking for an easy onramp to investing, this is worth checking out.
Online robo-advising services enroll users in savings or investing plans from a website or app. Like similar finance apps I use and recommend, such as Acorns, M1 Finance and Qapital, Ellevest asked for my name, ZIP code, household income and financial goals. Unlike those, Ellevest asked for my gender and number of children.
Although Ellevest is targeted to women, the app allowed me to enroll.
Do women want, or need, an investment adviser targeted to them?
Kathleen Burns Kingsbury, a Vermont-based consultant and wealth adviser and author of “How To Give Financial Advice To Women,” says women approach finances differently. She pointed to research by Merrill Lynch that found women were nearly three times more likely than men to have had a negative genderstereotype experience with their financial adviser.
The Merrill study also found that when a mixed-gender couple sits in front of an adviser, the
man typically commands 60 percent of the adviser’s attention.
As I enrolled, the Ellevest app asked about my financial goals and biggest obstacles. The menu of choices include “navigate a career change,” “feel confident negotiating” or “tackle impostor syndrome.” While these are universal challenges, they also struck me as signals to women that the designers of this app understand their perspective.
Robo-investing, by theory and design, means setting up an investment account that doesn’t involve speaking to another human. Typically, we interact with robo-advising software on our phones, with small initial dollar amounts, and receive simple investment plans automatically from a few data points about our goals, risk tolerance, income, time horizon and life status.
The hardest part of investing is just getting started. For that reason alone, I am a proponent of setting up a simple plan with a robo-adviser and then not messing with the plan. Ellevest appears solidly aligned with this goal and method.
What you should never do on your financial app — and I cannot emphasize this enough — is day-trade GameStop shares because an anonymous poster on Reddit said you could stick it to some imagined short-selling hedge fund.
Ellevest’s goal of appealing to women as they ramp up investing seems laudable.
Aguilar says her retirement programs at work aren’t easy to navigate or understand. “Ellevest makes it easy and clear to get set up and start investing,” she said.
The educational content of Ellevest also appealed to her.
“I quickly appreciated that the investment algorithm takes into account a woman’s issues, such as the gender pay gap and longer life expectancy,” she said. “They also do a great job at educating women about why it is important for them to take charge of their finances.”
Kingsbury said the right way to think about tailoring financial advice to women is frequently misstated.
“In the future, I think we will move to services that are more human-centric, rather than gendered,” she said.
One person’s experience may be different from another’s, so a one-size-fits-all approach doesn’t work.
“That may be an argument for a woman-centered robo-adviser. It may also be an argument for a human investment adviser,” Kingsbury said.
In addition to providing clearly stated and fixed monthly fees, the Ellevest site offers coaching sessions, a highly useful financial service that most humans — regardless of gender — need.
Ellevest offers monthly plans for $1 and $5, or $9 with a suite of premium services. Once you’ve accumulated $1,000, the fees are lower — always an attractive feature, no matter your gender.