Sallie Krawcheck’s Mission: Getting More Money Into the Hands of Women

Sallie Krawcheck is one of the preeminent women of finance, having run Merrill Lynch Wealth Management and US Trust, Citi Wealth Management and research firm Sanford C. Bernstein and Co. She’s also a straight talker with a passion for empowering women through investing. To achieve that, she co-founded Ellevest, a digital investment platform for women that offers not just financial services but also career coaching and financial planning.

Recently Krawcheck, who serves as Ellevest CEO, shared her vision at Invest for Kids’ annual Women’s Event, this year held online. Invest for Kids harnesses the power of the investment industry to benefit underprivileged children in Chicago. In conversation with Jenny Fortner, Director of Impact and Engagement at Goldman Sachs Philanthropy Fund, Krawcheck explained how investing for women intersects with sustainable investing, because, as she likes to say, “Only good things happen when women have more money.”

The following interview has been edited for length and clarity.

Jenny Fortner: How did you get started in the investment industry?

Sallie Krawcheck: I spent my 20s as an investment banker. I didn’t like it. At the time I wouldn’t have been able to articulate it, but it was an environment ripe with toxic masculinity. I thought, I don’t know how to be successful here.

At the age of 29 years and 11 months, the idea came to me that I should become a sell side equity research analyst. I interviewed with a double digit number of research firms. They all turned me down. One of them turned me down after they found out I had a baby at home, because I wouldn’t be able to do the job with a baby. Only Sanford Bernstein would give me a job.

I think I was born to be in the investing industry, both because of how interesting it is but also because of the mission-driven nature of it. You don’t know how much you actually help people through this. Our industry doesn’t do a great job of branding itself that way. This is all about American dreams, hope, living your best life with your family.

JF: Not a lot of women wake up knowing they want to go into investment. I hope that changes. For me, when I was a freshman in college my uncle asked if I wanted to trade futures and options with him. I fell in love with it; the fast paced nature, but most importantly the realization that I could actually do good while investing. I was able to help put my three younger siblings through school with some of my early investments. That was a powerful lesson to me, the idea that one can make a positive impact and give back while working in investing.

SK: I spent my career with the view that women don’t invest that much and it’s sort of their fault. And we need to change them.  Everybody knows they’re risk averse, don’t we? Everyone knows they aren’t as good at math as men. Everyone knows they aren’t as good at investing. Everybody knows they need more financial education. Let’s all start a women’s investing initiative in which we tell them to change and get more financial education.

But in fact most of what I said isn’t true. Sure, women need more financial education; so do men. Women are as good or better at math, and better investors, the research tells us, certainly not worse. As for risk aversion, I would reframe it as risk awareness. The gender difference is not that women won’t take risk, but that women need to understand the risk before they take it, and our industry hasn’t done a great job of helping them through that.

This sense that women have of “I’m not good at this” actually starts in childhood. We still talk to our sons and daughters about money differently. For young boys, it’s “go for it,” and “be wealthy,” and “watch Daddy invest.” For girls, it’s coupon clipping, and “be careful.”

When they grow up, there’s a ton of male money media; whether it’s Barron’s or CNBC, which is completely built on the concept of money as a sport. For women what is there? Take this money quiz, or are you a Carrie or a Miranda. It’s patronizing stuff. Two thirds of it is about how difficult money is.

For men it’s about trading and becoming a CEO. For women it’s guilt and a view of it being more difficult than it is. We internalize these messages that we receive. Even though girls get as good or better grades in math than boys, it’s “Investing’s not for me.” It holds us back in living our full lives. So part of what we are trying to do at Ellevest is change the conversation and the perceptions we have around women and life.

JF: What made you take the leap to start Ellevest?

SK: It came down to, what difference I can make given the unique career that I can’t believe I’ve had. Women don’t invest as much as men do. It costs them hundreds of thousands, for some women a million bucks plus, over the course of their lives. They can’t leave the job they hate, they can’t leave the relationship that’s turned toxic. They live smaller lives than similarly situated men, just because they don’t invest as much as men do. I thought, wow! A lot of people are working on the lean-in thing — make more money — but no one’s really working on this.

JF: What trends are you seeing in terms of women in investing and as entrepreneurs?

SK: Women are, in many ways, killing it. Look at the rate at which we’re graduating from college and graduate school and entering the workforce. As entrepreneurs our businesses tend to outperform those run by men only. So there’s a sense of long term, unstoppable motion.

That said, during this pandemic women have gone backwards relative to men. We have gotten fired at a greater rate. When we are privileged enough to work from home, women are losing productivity and men are gaining productivity. In a downturn, those who don’t have as much do worse.

We talk so much about the gender pay gap. The gender wealth gap is much more important. The pay gap is how much you earn, the gender wealth gap is how much you keep. It’s 32 cents to a white man’s dollar. For Black women or brown women, it’s pennies. And we are going backwards.

We’re working to help women to invest more. Get yourself financially straight. Pay off your credit card debt, build your emergency fund. When we do that as a woman, it’s the number one driver of our confidence and ability to reach future goals.

What we are seeing is that women are staying disciplined. While in our industry, many weeks during the pandemic have seen record outflow in mutual funds and ETFs, at Ellevest, we continue to have positive net inflows every single week. Women did not start moving money out and changing their asset allocation willy nilly.

JF: What can we do to best support women entrepreneurs and women in the workforce?

SK: When we are individuals in a position of power, what’s needed is bringing underrepresented groups along and promoting them — not just mentoring them.

I would argue that diversity outperforms meritocracy. When we let people just promote the people they think are best, we get un-diverse groups.

Think Wall Street. All the research says women are as good or better investors than men, as good or better traders than men. Yet it’s still overwhelmingly white male. All we have to do is look back at the financial crisis to say, maybe the performance wasn’t what we would have hoped as a nation.

How can you get better performance? Go against your gut and hire diversity.

Your money matters. When we started Ellevest, it was digital first, for young women who were on their way. I wasn’t going to do a private wealth business. But then I had successful women tell me, I am tired of having my money at companies I wouldn’t let my daughter work at. I’m tired of having a financial advisor who won’t look me in the eye; who looks at my husband. These were women whose names you would know.

JF: How do approaches like sustainable, impact and ESG (environmental, social and governance) investing impact women?

SK: The one you didn’t mention is gender lens investing. That’s an important way to have an impact. Nothing bad happens when you get more money in the hands of women. Societies moderate, nonprofits benefit, families benefit — particularly daughters, but also sons. When women have more money, women do better, but men do better too. At Ellevest, we want to get more money in the hands of women because the cascade of good things that happen is pretty powerful.

Let’s try to help a broader set of women. When something hurts everybody, it hurts women more. Gun violence: it hurts everybody but it hurts women more. We began to screen out companies that had policies and practices that hurt all of us, but hurt women more. We added the racial justice lens, on the recognition that you can’t advance women without specifically looking to advance black and brown women. You can’t be a feminist without also being antiracist. If something hurts women more, it hurts black women more. Deterioration of the environment? Hurts women more, hurts people of color more too.

It begins to capture a number of the focus areas for impact or values based investing, but doing it through the Ellevest mission, which at its core is: Get more money in the hands of women.

JF: When it comes to ESG, the #1 question we receive is, “Do I have to give up returns?” Can I have my cake and eat it, too?

SK: Explain to me why a gun manufacturer or a cigarette company is going to perform better than a company that’s working to save the environment. Why should companies with less diversity outperform companies with more, when every piece of research you see is about the power of diversity for higher returns, lower risk, greater employee engagement, greater customer engagement. Diverse teams outperform smarter teams.

Gender lens investment means I’ll have to give up returns? That’s an old way of thinking. The industry has evolved from being a mom and pop to a sophisticated undertaking.

Our research shows you might not get full market returns, just like you might not anyplace else. Not only do you not have to give up returns, there may be “impact alpha,” (enhanced financial results due to impact investing) which in addition to being able to sleep better at night because you’re investing in things you believe in, also means you’re reducing risk. If you’re doing things the right way, might you outperform every year? Maybe not, but missing the big scandal, the slow bleed, the impact of that is real.

JF: Explain the concept of mentorship versus advocacy.

SK: A mentor is someone who gives you advice; a sponsor is someone who fights for you behind closed doors as well as out in the open. The research tells us that women are over mentored. But we have a fraction of the number of sponsors.

I lived this. When I was let go from running Merrill US Trust, it was a shock and it wasn’t. I was beating plan, we were growing share. Then I was told we’re reorganizing and you’re out.

I called some of the directors and asked what could I have done better? They said that no one was in that room fighting for you. You gotta have those advocates for you. It can literally be the difference by being promoted and losing your job.

As women, historically we got hit for advocating for other women, and people of color for other people of color. White men don’t. We need to plow right through that. Maybe acknowledge it: Be like, in an earlier generation, if I had been an advocate for Susie I would have gotten knocked for it. But let me tell you what’s great about Susie. Spend some of our political capital to help others make the journey up.

Invest for kids has raised over $15 million for Chicago underserved youth and improved the lives of more than 80,000 young people. Due to COVID, the 12th annual Invest for Kids conference will be held virtually October 21.


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Carrie Kirby spends a lot of time asking people about something they think about but rarely talk about: money. Her work on personal finance, business and technology has appeared in San Francisco Magazine, The San Francisco Chronicle, Wise Bread and more publications. She lives on an island (Alameda) with her husband and three kids, and blogs about family travel and mileage rewards at The Miles Mom.