Ellevest is a robo-advisor with a twist: the company is designed by and for women, to help them successfully invest and avoid potential pitfalls from traditional investment strategies. The platform uses alternative data points to inform portfolio recommendations, based on statistics that women live longer and are paid less than men over the course of their lives.
Created by Sallie Krawcheck, former CEO of Merrill Lynch Wealth Management and Smith Barney, Ellevest is a fiduciary that can be used by both women and men for cost-effective, automated investing that incorporates different data points than those used by most competitors.
How It Works
Like many robo-advisors, Ellevest begins with a set of questions to answer about yourself, your upcoming life goals, and how you prioritize them. Common goals include retirement plans, but can also include things like saving for a down payment on a house or future education expenses for your kids. The process takes no more than ten minutes to complete.
When you finish, you’ll receive suggestions on personalized investment portfolios for your individual goals, based on both what you’re saving for and how long you want to invest. Each portfolio is crafted with an appropriate mix of stocks, bonds, and alternatives to help you achieve your short-term and long-term milestones.
Once you officially sign up with Ellevest, simply link your bank account and then opt between one-time deposits or recurring auto-deposits to fund it.
Investment Strategy
Each plan within the Ellevest platform is tested for 500 different economic scenarios, with up to 7,000 simulations run. While women are the target demographic, men are welcome to invest, and do. The main difference between Ellevest and broader robo-advisors is that Ellevest utilizes gender-specific salary curves and longevity data tailored to women to create better informed recommendations and forecasts. Male clients simply get recommendations using different data as part of their personalized plans.
Ellevest offers taxable investment accounts as well as IRAs, including traditional, Roth, and SEP IRAs. You can transfer traditional, Roth, and SEP IRAs to help fund your retirement goal on the Ellevest platform, as well as rollover 401k or 403b from former employers. Ellevest also allows you to rollover taxable investment accounts from other brokerages; however, this could have tax implications so check with your tax advisor before initiating any transfers.
There are three different levels of service you can choose from Ellevest, depending on how much you want to invest and the benefits you hope to take advantage of.
Ellevest Digital
With no minimum account balance, anyone can start investing with the Ellevest Digital plan. It comes with a low annual fee of 0.25%, which is on par with competitors. Here’s what you get included when you opt for this plan.
- Personalized investment portfolios
- Access to Ellevest impact portfolios
- Automatic deposit
- Penalty-free withdrawals
- Automatic rebalancing
- Fee-free emergency fund
- Tax minimization methodology
- Unlimited support from Concierge Team, including financial professionals
Ellevest Premium
Ellevest premium requires a minimum balance of $50,000 and the annual fee jumps to 0.50%. You do, however, get some additional value on top of all the services included in the Digital plan.
For starters, you get one-on-one access to CFP professionals for personal advice on finances and money growth strategies. You can ask personal questions about things like purchasing a home, growing your family, leveraging employee benefits, retirement options and timeline, and navigating finances through life transitions.
On top of that, you also have access to executive coaches for advice on salary negotiations and career events, such as interview tips, transitioning back into work after a career break, or switching to new industries. These perks are meant to set you on a better long-term trajectory and avoid losing the opportunity to build your wealth by earning more income while still pursuing your passions in life.
Private Wealth
For those with $1 million or more in investments, you can qualify for Ellevest’s Private Wealth service. This utilizes a full-service wealth advisory team rather than the robo-advisor platform.
You’ll work directly with an advisor who learns about your financial goals and creates a plan to help you achieve them. They also take into account investing in a way that aligns with your values through the use of impact portfolios. As time goes on, you’ll have an annual review with your advisor, plus ongoing communication about any changes or recommendations in your investment strategy throughout the year.
Pricing Model
Management Fees
0.25%
Account Minimum
$0
In addition to your annual management fees, also expect portfolio fees to range from 0.05% to 0.10% per year for Ellevest core portfolios. Their impact portfolios range between 0.13% and 0.19%.
Additional Features
Impact portfolios let you maintain diversified asset classes while investing in companies that help women advance. Standards for companies in these portfolios include:
- Women in leadership
- Sustainability and ethical practices
- Women-owned businesses and companies that provide community services, such as child education, performing arts, and senior housing
Ellevest also offers an emergency fund savings account that helps you keep on hand three months of your income in case of a financial emergency. You don’t have to pay a management fee and the funds are kept in an FDIC-insured account. The downside is that you’ll only earn 0.01%.
You’ll also get an ongoing slate of education and content from Ellevest. A weekly newsletter, “What the Elle,” delivers resources along with articles on women, money, and power. There’s also an online resource center called the Ellevest Magazine. Anyone can sign up to find answers on how to invest, manage money, and careers.
Advantages
Regardless of what Ellevest plan you choose, you automatically qualify yourself for some unique advantages. Customer service is one area where Ellevest truly shines. All clients get unlimited access to the Concierge Team by asking questions via text, phone, and email. Common topics include getting help consolidating your existing IRAs and old 401ks, customizing your accounts, and getting professional financial advice.
Another perk is that there is no fee for emergency funds. While the rate of return is low, your funds are protected in an FDIC-insured account and you can view that aspect of your savings plan alongside your other financial goals.
If you have friends who may be interested in Ellevest, there’s also a competitive referral fee program. Every time you get a friend to fund their account, you’ll each receive a $20 credit to your highest-priority goal. The compensation limit is pretty high at a maximum of 20 referral credits per calendar year.
Ellevest also provides tax optimization through a couple of different strategies. This includes asset location and rebalancing, as well as withdrawal sequencing.
Disadvantages
One of the downsides of working with a robo-advisor — Ellevest included — is that you can’t pick individual stocks. This helps to reduce your overall risk and instead opt for a long-term strategy. But if you’re passionate about incorporating your own mix of stock picks in your portfolio, you’ll need to invest elsewhere.
You also won’t enjoy a tax-loss harvesting feature as part of your automatic portfolio. Some of the larger robo-advisors employ a strategy to sell a security at a technical loss but replace it with similar stock to maintain your portfolio balance. This can help reduce your capital gains and taxable income each year.
Who It’s Best For
Obviously, Ellevest is geared towards women, from the overall branding to the different types of data used to inform their personalized recommendations. But that doesn’t mean that men can’t benefit from this robo-advisor as well, especially with the Digital plan. The fee is comparable to some of the other top-tier automated investment platforms, and you don’t have to worry about meeting any type of investment minimum. You can also integrate your emergency fund into the platform. While you won’t see an amazing return, it serves its purpose well by giving you a holistic view of your finances.
Ellevest is also ideal for those with higher balances who can benefit from executive coaching services. You might not feel the need to commit to a long-term coach to guide you through different life and career events, but you may want some extra support when it comes time to make some big decisions. For those at the Premium plan level, having that coaching session in your back pocket could potentially pay off big time if it helps you negotiate a better salary or weigh the pros and cons of a career move.
The Bottom Line
No matter your gender, Ellevest can be a powerful tool to reach your financial potential both from investments and by crafting a strategic career path. What really sets them apart is using both lifespan and long-term salary forecasts to give a more accurate outlook to your portfolio contributions and earning power, regardless of your gender. And for those who wish to support companies that empower women, Ellevest’s impact portfolios make it easy to provide investments that are based on returns and personal values.
