Womenâ€™s financial needs are different from those of men. Not only do women statistically live longer than men, they also tend to make less money, and are more likely to have employment (and therefore, income) gaps during their careers. Women keep 71% of their assets in cash (in other words, not invested), which means less of their money is working for them. All told, women have a longer retirement to plan for with less money available to them.
Traditional financial models often do not take these financial circumstances into account. Ellevest, a robo-advisor that launched in 2016 under the leadership of financial services veteran Sallie Krawcheck, aims to offer women workable solutions to these myriad issues. With customized investment portfolios and goal-based plans, Ellevest provides financial planning for women (and anyone else who is not served by traditional services),Â tailored to the investorâ€™s individual needs.
Though Ellevest is woman-centered, you do not have to be a woman to sign up with the robo-advisor. The program is a good fit for anyone who feels underserved or overwhelmed by traditional financial services, which may only have a limited selection of investment portfolios or may base suggestions on nothing more than a risk tolerance assessment.
Ellevest is different because it starts by examining the investorâ€™s goals and investment timeline, and it then designs the portfolio based on that information. Investing with Ellevest does not require users to make do with a portfolio that is a bad fit or learn investment theory to build a tailored portfolio.
This makes Ellevest an excellent choice for a newbie investor or someone who feels intimidated by investing. However, the basic Ellevest program may feel a little too automated for anyone who is comfortable with making independent investment decisions.
For customers who want a little more personal control, two additional options give you access to one-on-one personalized guidance from a certified financial planner. The first, Ellevest Premium, requires a minimum investment of $50,000 and charges a 0.5% annual fee. The second option is the Ellevest Private Wealth Management program, which allows you to work one-on-one with a dedicated financial advisor to create a personalized investment plan. The minimum investment to qualify for Private Wealth Management is a cool $1 million.
Unfortunately, independent investors without that kind of money available are stuck with the basic Ellevest program, which they may find too constricting.
|Account fees (annual, transfer, inactivity)||
|Tax loss harvesting|
|Tax loss harvesting detail||Ellevest's Tax Minimization Methodology (TMM) puts tax-efficient securities into taxable accounts and less tax-efficient securities into tax-deferred retirement accounts.|
|Offers fractional shares|
|Ease of use|
|Customer support||Phone, Email|
Ellevest is a robo-advisor and not the broker/dealer that will hold your investments. Ellevest uses Folio, a third-party SEC-registered broker/dealer and custodian, for actual investing. Folio is a member of the Securities Investor Protection Corporation (SIPC), which protects individual investor assets for up to $500,000.
Ellevest also uses industry best practices when it comes to securing investor information, and their site uses the highest level of SSL encryption available. They have a vigorous ID verification process to make sure no one can fraudulently access your information, and use a two-step process for withdrawals and deposits.
If you have ever felt shut out of traditional financial services, Ellevest can be the right option to help you become an investor. With its goals-oriented investment approach and commitment to meeting the needs of women and other individuals whose finances donâ€™t fit the standard mold, Ellevest offers a supportive, diversified, and intelligent approach to managing money.
Any investors who already have some familiarity with the financial industry, or who would like to be more personally involved with their investment decisions could be frustrated by Ellevest, however. With a website user interface that is not designed for research, an app that is only available for Apple users, and a sparse selection of account types, Ellevestâ€™s entry-level robo-advisor does not have as much to offer the more advanced investor. In addition, the lack of tax-loss harvesting could be a turn-off for any investor worried about capital gains taxes.
Both Wealthfront and Betterment may offer some better options to investors who still need personalized advice, but would like a more user-friendly online and mobile experience, more account options, and the ability to use tax-loss harvesting. But remember that Ellevest does offer a more personalized portfolio than either of its competitors because of the 21 ETF classes it offers.
For new investors who have been turned off by traditional financial services, Ellevest offers a much-needed service. If that does not describe you, it may not be the right fit.