Ellevest is a robo-advisor built specifically for women. Sallie Krawcheck, the CEO and co-founder of Ellevest, has held senior positions at Citigroup, Bank of America and Sanford C. Bernstein. She has a keen interest in the role gender plays in finance, and has designed a product with those differences in mind. The gender wage gap, the average age at which women’s salaries peak, and the longer average lifespan of women are all things that Ellevest takes into consideration when designing its investment strategy and portfolios.
Ellevest has registered Assets Under management (AUM) of $25 million in 5,200 accounts. It currently offers taxable accounts, as well as IRA/Roth IRAs. Average account size is around $4,800.
Fees and investing
The annual fee is 0.50%. As with any robo-advisor, this management fee is in addition to the underlying fees charged by the ETFs in your portfolio. The ETF fees in an Ellevest portfolio range from 0.10%-0.15%.
Costs are straightforward. There is no minimum investment required, and no tiered plan structure. Every account, regardless of type, pays the same fee and receives the same services. Unlike some robo-advisors, there is currently no fee cap.
You start off by providing an email address, your name, age, gender and education level. Then you’re asked more private info, like your salary, job seniority and industry, and household information. What follows is a unique approach to portfolio devising.
You get to choose from a list of seven investment goals, but unlike other robo-advisors, you can select multiple goals. Choices include money for retirement, kids, a home, a one-time expense, starting a business, an emergency fund, or just building wealth. You prioritize your goals and confirm the target amounts and timelines to generate a custom investment plan.
What you get
For each investment goal you choose, you get a personalized portfolio of Exchange Traded Funds (ETFs). ETFs are a broad holding of stocks or bonds, traded on a market. Like most ETFs, the ETFs offered are based on well-known, passive indexes. These ETFs are meant to track with the market so your holdings grow (and shrink) along with the market, instead of trying to “beat” the market like more actively managed funds. Many robo-advisors invest in passive ETFs because of the low expense ratios.
Each portfolio can be adjusted to different risk levels, which will change the mix of stocks and bonds that you hold. There are hundreds of combinations available. The financial plans and portfolios are adjusted for gender considerations. Even though it’s a product marketed to women, the same service is available for men.
While you can adjust the recommended portfolio by risk tolerance, you can’t adjust which ETFs are included. Ellevest uses 21 different asset classes, which is large by robo-advisor standards. Every portfolio is automatically rebalanced to stay within your plan settings. Tax-loss harvesting is not offered. Ellevest takes the same stance that AssetBuilder does, that tax-loss harvesting doesn’t lead to increased gains, but merely pushes tax liability to a future date.
Ellevest also offers a resource center with articles and stories about goals, finances, life and career. There is a focus on closing the gender gap when it comes to investing, as well as numerous other articles focused on specific problems and money issues with advice specifically for women.
Ellevest has a unique approach to investing with gender-specific considerations. It offers an impressive breadth of portfolios and asset classes, all with personalization. Though there is a limited selection of account types, there is a good selection of goals to help guide your overall investment strategy.
The individual investment plans and wealth of information on female-specific finances is a boon for any women looking to get into investing. The 0.5% management fee is a little high, but competitive with other robo-advisors, while the zero minimum is enticing to even the most cautious investor. If you’re looking for a complete investment product without going through a traditional advisor, this is a great place to start.