Sallie Krawcheck Is Working to Close the Gender Pay Gap Through Ellevest
“It is not unusual these days for me to be walking through an airport or down the street with my Ellevest bag in hand and be stopped by a woman who asks, ‘Oh, are you with Ellevest?’ And then tell me I changed her life,” says Sallie Krawcheck, CEO and cofounder of Ellevest.
Helping to change women’s lives is both Krawchek’s mission and inspiration. From CEO of Merrill Lynch Wealth Management to being known as “the most powerful woman on Wall Street,” Krawcheck came to the realization that women need more help investing their money. She explains that money is typically the number one source of stress for women across the socioeconomic spectrum and saw an opportunity to help others learn the fundamentals of investing and build confidence for the future.
“It was a series of ‘aha!’ moments for me that began one morning while I was putting on my mascara,” Krawcheck says. “The retirement savings crisis is a woman’s crisis, and I began to think about ways I could be part of the solution.”
Since starting Ellevest in 2014, she is working hard to help close the gender wealth gap. Most investors in the company are women and 75 percent of its employees are also women helping others invest, save, learn and earn more at work.
“It’s [through] talking to women and hearing what does and doesn’t motivate them to invest that we learned outperforming the market is the goal of almost no woman anywhere,” Krawcheck says. “But when you start to tell them their money can earn a return and make an impact, that’s when you start to see [them] go from cool to warm to ‘I’m ready to move.’”
What’s the bottom line? Krawcheck knows women will not be fully equal with men until they’re financially equal with them. A lot of companies work to help shrink the pay gap, but Ellevest is unique in its approach. “To my knowledge, Ellevest is the only one of the modern financial services companies or fintech companies that take into account one’s gender when putting together an investment portfolio,” Krawcheck says.
The algorithms Ellevest uses personalize portfolios by taking into consideration the best information to support different female investment plans.
“When you’re creating a retirement portfolio, if you assume an individual is ‘average,’ that’s fine if you’re a man, but oh dear if you’re a woman or nonbinary individual,” says Krawcheck. “It’s because women and nonbinary people tend to earn less, their salaries peak 15 years sooner, they take more career breaks and they die later. So, the outcome here is a real problem; people could run out of money, but certainly live a less rich or full retirement.”
With this in mind, Krawcheck built the intentional impact portfolio. It removes companies that financially harm women by using a variety of data sources and metrics to choose companies in which to invest or divest from.
Ellevest is working to build a valuable business that drives the desire to build wealth. What Krawcheck finds particularly exciting, though, is the company’s ability to change lives.
“Because we defined our mission as getting more money in the hands of women, there’s a lot of opportunity for us,” she says. In getting to engage with and help more women, Ellevest and Krawcheck are able to make strides toward achieving positive change for women.
It’s these women—the ones who stop Krawcheck in the airport and on the street and the people that have come together to build Ellevest—who represent the real victories here.
“The part that almost brings me to tears is when you get the support of people like Melinda Gates and Venus Williams and bring mission-aligned individuals and companies together to do something important,” Krawcheck says. “They’re putting in their money and giving advice, and it gives me chills to think about the significant ripple effect we can have and are having on the lives of women.”