The Era of Women’s Financial Independence

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Sallie Krawcheck’s professional mission is to help women reach their financial and professional goals (or, put more bluntly, to get more money into the hands of women), thus enabling them to live better lives and unleashing a positive ripple effect for our families, our communities and our economy. To that end, she is the CEO and co-founder of Ellevest, a digital-first, mission-driven investment platform for women. Ellevest is one of the fastest growing digital investment platforms and has been named a #24 on CNBC’s top 50 "Disruptor" list, #14 on LinkedIn’s 50 “Most Sought-After Startups” (and #2 in New York), and one of Entrepreneur Magazine’s Top 100 Brilliant Ideas. Krawcheck is also Chair of the Ellevate Network, a 135K-strong global professional women’s network; she is Chair of the Pax Ellevate Global Women’s Leadership Fund, a fund that invests in the top-rated companies for advancing women; and she is the best-selling author of “Own It: The Power of Women at Work.” 

Krawcheck, one of few executives to find success in large complex companies and as a startup CEO, is widely recognized as one of the most influential women in business. She has been recognized by Inc. as a “Top Female Founder”, called "The Last Honest Analyst" by Fortune magazine, was named the seventh most powerful woman in the world by Forbes, was # 9 on Fast Company's list of the "100 Most Creative People in Business." She has been called one of the top 10 up and coming entrepreneurs to watch by Entrepreneur Magazine and has landed on Vanity Fair’s “The 2018 New Establishment List.” 

Before launching Ellevest, Krawcheck built a successful career on Wall Street: She was the CEO of Merrill Lynch, Smith Barney, US Trust, the Citi Private Bank, and Sanford C. Bernstein. She was also Chief Financial Officer for Citigroup. Prior to that, Krawcheck was a top-ranked research analyst covering the securities industry. 

Krawcheck received a BA summa cum laude from the University of North Carolina at Chapel Hill and an MBA with honors from Columbia Business School. She has two children and two cats. 

Business Today (Akshita Gandra): What was your main inspiration behind starting Ellevest? 

Women live longer than men by 6-8 years, but we retire with ⅔ the money as men.

Sallie Krawcheck: I spent my career on Wall Street, running Merrill Lynch, U.S. Trust, and Smith Barney, Citi’s private bank. I was Chief Financial Officer of Citi. The inspiration behind starting Ellevest really came from the experience of those years, but it really was a flash of insight that I had one morning. Women live longer than men by 6-8 years, but we retire with ⅔ the money as men. I began to think about how can we begin to solve this gender crisis. We don’t have the political will for tax increases or entitlement cuts. It really became a question of how to get more money in the hands of women. This became the mission of Ellevest, and we started as an investment platform built around the needs of women. 

BT: What were some of the concerns or barriers you faced when starting Ellevest, and how did you overcome them to create such a successful service? 

What we didn’t expect is that women had been socialized that “for women” was an inferior product. We didn’t tell them it was better, we showed them it was better.

SK: There were many barriers, nothing is easy. Finding the team, raising the money, and finding a product that works weren’t easy tasks. A notable obstacle that I didn’t expect was the backlash from women themselves. When we launched, we launched full on — “invest like a woman.” We were clear, and the reaction we got, not from most women, but a substantial minority, was “For women? How sexist. How dare you? For women? I don’t need your dumbed down financial education.” What we didn’t expect is that women had been socialized that “for women” was an inferior product. We didn’t tell them it was better, we showed them it was better. As women used the product, they realized this is a product that is more sophisticated than other products out there, not less sophisticated. What’s fascinating though, is that not one single woman had said at first, “For women? It must be better.” People said they were curious, but didn’t say that it would be better. 

BT: What do you wish that everyone from a wide range of industries knew about the lack of support that women face regarding investments, or in general, the workplace?

SK: One is that we blamed women for it for so long. Women didn’t invest as much as men, therefore the reason is that women are risk-averse. That is what the industry will tell you, including women in the industry. There are many articles on it, it is absolutely orthodox. What it says is that “it’s their fault, not ours.” It’s not women’s fault. Women are not risk-averse, they are risk-aware. It’s not that they’ll take less risk, it’s that they won’t take risks they don’t understand. The industry has done a bad job of articulating the discussion of risk. Firms need to avoid unintelligible jargon. Women don’t want anything to be dumbed-down, they are just looking to understand. Another important thing to note is that Ellevest doesn’t ask about risk-tolerance. Why would I ask you to build a portfolio around something that the research shows you don’t know? You will know in a down-term, not today. Let me do the right thing as a fiduciary to put your interests above mine and get you to your goal. 

BT: College students, as they are starting to enter new careers and industries, are beginning to learn the importance of diversity and inclusion in the workplace. What’s something that you encourage young people to think about before choosing their careers or jobs, especially for younger women?

SK: If you have choices, and you’re thinking about what company to look like, look up the ladder. If you don’t see anyone that looks like you, that’s important information. You might be able to be the first or only woman who runs XYZ, but I wouldn’t count on it. If you see a diverse team, employees who reflect people who are all very different, and they are all successful, then that’s good. However, if the leadership team looks like it’s 1974, it’ll be a hard battle. It doesn’t matter if they put up a statue that says they love diversity, or have a great diversity program. It doesn’t matter what they say or what publicity stunt they pulled, it matters what they are. 

BT: There are plenty of issues like sexual harassment or unequal pay that need to be dealt with, but one huge issue that also needs to be combated is the imposter syndrome that many women face. What can companies and firms do to eliminate this through actually creating a new environment that incorporates solutions instead of simple publicity? 

All the barriers for what is viewed as appropriate female behavior have fallen, but money is one of the last.

SK: When it comes to imposter syndrome, we can begin to look into ourselves. My friend, Reshma Saujani [Girls Who Code founder and CEO], has spoken about the concept that boys are taught to be brave and girls are taught to be perfect. Boy are pushed forward. “Oh you fell? That’s alright, get up, try again.” All the while, girls are being held back. It’s hard to fail if you’re taught to be perfect. We take that sense of trying to get an A+, be perfect, not have a misstep, into the workplace, and if something goes wrong, we blame ourselves, and say we don’t belong, whereas men think, “Oh I failed three times but that’s fine, I still belong.” They’ve been conditioned that way their whole lives. Companies have to change many things, but we have to look into ourselves to think about what is driving us to be perfect, because that is what causes our imposter syndrome. 

BT: Women taking their financial decisions into their own hands is an awesome cultural shift, but what are some other shifts you hope to see in the next 10-20 years? 

SK: We are socialized that we are not good with money, that we have to be careful, and that financial planning is difficult — we’re told money is beyond us. Men think of money as a river, money comes in and out, but women think of money as a pond, we only have so much money. Being bad with money is still viewed as an attractive female characteristic. We all know people like this, “Oh I just can’t figure out money!” It reminds me of back in the day when being athletic was viewed as unattractive for women. One change is that women used to never talk about sex and now they do. All the barriers for what is viewed as appropriate female behavior have fallen, but money is one of the last. Women will choose to talk about any other topic, including their death, than money. Being socialized that money isn’t something we’re comfortable dealing with is keeping us down. If we can’t talk about money, how do you know what raise to ask for? How do you know what to invest? Pulling away that final stigma that it is unladylike to talk about money is something we are trying to accomplish.