Magazine

Things Are Just Different at Ellevest Private Wealth

By Sallie Krawcheck

In Ellevest’s early days, when Dr. Sylvia Kwan and I were putting our heads together, she told me that she wanted the foundation of our Ellevest Private Wealth offering to be built on a foundation of three beliefs. Call it a three-step recipe:

  1. A high degree of personalization, with each investment portfolio constructed uniquely for each person.

    My POV on this: Personalization? Check. Definitely.

  2. Diversification — Sylvia’s second foundational belief — the tried-and-true tenet of building a robust investment portfolio, of not putting all of one’s proverbial eggs in one proverbial basket (even if the CEO of your company stock is really bullish on the company’s stock — and even if you are).

    Diversification? For sure. Check.

  3. Impact investing. The ability for clients to make a positive impact through their investments.

Wellllllll, that last one was a journey for me, given my “traditional Wall Street” background. I was like, don’t you have to give up financial returns to make a positive impact? Shouldn’t you just invest to earn the highest return regardless of what you invest in, and give the money away later? Isn’t impact investing pretty junior varsity? Aren’t all of the BSDs over at the hedge funds?

What I know now: no; I don’t think so; not at all; and so what?

As it turns out, the critical, head-slapping insight for me was realizing I already was an impact investor — that everything I do with my money has impact, wherever I spend it, whatever I’m investing it in, whether I’m aware of that impact or not. (Same for "gender-lens investing." That can also invite some side-eye from traditionalists. But if you think about it, we’re all gender-lens investors — we’re just investing in men.) So I might as well make sure the impact I’m making is the impact I want to make.

And then there’s the extra special ingredient.

To do all of this — personalization, diversification, impact — we would not only invest in stocks and bonds that drive positive impact; we would also search out alternative investments.

My view of alternative investments? Also a journey.

On Wall Street, traditionally, “alternatives” means hedge funds and private equity. Cue mental images: Barbarians at the Gate. Highly confident investor talking up his book on CNBC. Said highly confident investor then underperforming a pedestrian index fund while earning a fortune for himself.

But that’s not how we do alternatives at Ellevest — no hedge funds here. Here, we think of alternatives more broadly as “investments that don’t move the same way as publicly traded stocks and bonds.” With that definition, alternatives can provide investing opportunities that aren’t available in public markets — and often carry the potential for even deeper impact.*

So Sylvia and her team built that Private Wealth offering that she mapped out in those early days, all while hewing to our overriding mission: to get more money in the hands of women.

I know of nothing else like it.

The vast majority of other wealth management firms have been sticking with the more traditional stock and bond portfolios (with a traditional 60/40 portfolio down 14% as of the market's close on Tuesday, as stocks and bonds have declined in tandem), or “actively managing” by overweighting tech stocks (the tech-heavy NASDAQ is down 29% from the start of the year), or chasing cryptocurrency as their cool new thing (Bitcoin is down 42% year-to-date; stablecoin Terra crashed completely), or trading meme stocks (I can’t even).

Meanwhile, at Ellevest Private Wealth, we’re doing something truly different.

We’ve been investing your money through underrepresented asset managers — nearly 85% of our alternative investment managers have a person of color or woman on their senior investing team.

We’ve invested in affordable and workforce housing (renovated sustainably) and community development. In municipal bonds that benefit underserved and under-resourced communities. In fighting climate change and reducing carbon emissions. In water equity and eco-smart forest management. In closing the homeless gap. In women entrepreneurs and other underrepresented founders. In companies whose policies and practices advance women, especially women of color. And not investing in those that don’t.

I could go on and on. (And I often do. This stuff is just so cool.)

I wish I could share numbers with you — things like average investment returns per client and so on. But what we offer is carefully personalized: Every Private Wealth investment portfolio is bespoke.

But I can say this much: It’s times like these that overwhelmingly demonstrate the power of diversification. And it’s also times like these that underscore how important it is, in our society more broadly, to invest for a better world, for women and their families. (I mean, if not now, when?)

Some financial companies will be emailing you about their “women’s initiative.”

For Ellevest, it’s not “an initiative,” it’s foundational. It’s how we roll:

  • We are majority-owned by women and underrepresented investors.

  • Our team is 79% women and 47% people of color.

  • We’re laser-focused on helping women and underrepresented people across the wealth spectrum invest.

  • Those investments are often in other women and making the world better for women.

  • Plus, you know, for investment returns.


  • Sallie Krawcheck Signature


    Disclosures

Alternatives offered by Ellevest to PWM clients have a minimum investment requirement. There are risks associated with alternative investing such as higher fees and in many cases, long hold times. As such, alternative investments may not be suitable for all clients. See more information here.

© 2022 Ellevest, Inc. All Rights Reserved.

Alternatives offered by Ellevest to PWM clients have a minimum investment requirement. There are risks associated with alternative investing such as higher fees and in many cases, long hold times. As such, alternative investments may not be suitable for all clients. See more information here.

All opinions and views expressed by Ellevest are current as of the date of this writing, for informational purposes only, and do not constitute or imply an endorsement of any third party’s products or services.

Information was obtained from third-party sources, which we believe to be reliable but not guaranteed for accuracy or completeness.

Diversification does not ensure a profit or protect against a loss in a declining market. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.

The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice.

The information provided does not take into account the specific objectives, financial situation or particular needs of any specific person.

Investing entails risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time.

Sallie Krawcheck

Sallie Krawcheck is the Co-Founder & CEO of Ellevest. Her life’s mission is to help women to reach their financial and professional goals.