It’s not immediately obvious to me that men and women should have different financial priorities, so this seems like a gimmick.
If men invest more readily than women, even when they’re ignorant… to blame that on the financial system is blaming the fox for eating the hens. It’s on everybody to seek out a good level of knowledge.
Krawcheck’s Ellevest does not “pinkify” investing, she insists, but it does start the process in a very different way. Ellevest’s objective isn’t to design a portfolio that will beat the market or focus on the exciting investment concept of the day. Instead, the robo-adviser designs portfolios based on the user’s investment time horizon and risk tolerance.
“Women think in terms of goals-based investing,” she explains.
It’s slightly pricier than rivals (the fee is 0.5% of assets a year), but cheaper than working with a traditional financial adviser would be. Moreover, as Krawcheck points out, it’s a process designed to ensure that women actually feel that their portfolios and goals are in sync.
So, you can rip people off if they’re willing to settle. You can call that empowerment.
“Women value capital preservation many times more than men, but you won’t find that reflected” at Merrill Lynch or anywhere else in the industry, she argues.
Translation: You can take advantage of a person’s fear of loss by charging them high fees to invest conservatively.