Ellevest, co-founded and helmed by financial services veteran Sallie Krawcheck in 2016, is like most other robo-advisors in every way except one: It’s unabashedly pro-female. And that’s not just a pat marketing hook, either.
Gender-based investing at Ellevest means factoring women’s generally lower incomes, different lifetime earnings curve and longer lifespan into portfolio construction. (And, yes, men can be clients, too: They get recommendations that account for their salary curves and longevity data.) Another notable feature is Ellevest’s additional planning layer, which helps clients achieve short-term financial goals — e.g., building a home down payment or amassing an emergency fund — in addition to long-term financial security.
The company’s 0.25% advisory fee (or 0.5% of assets for Ellevest Premium, which includes access to Certified Financial Planners and executive coaching services and requires a $50,000 account minimum) makes them highly competitive among robo-advisor rivals. Standout features include a customizable portfolio mix, $0 account fees, free emergency fund cash management and free analysis and tracking of clients’ existing 401(k) plan assets.
- Management fee: 0.25% - 0.5%
- Account minimum: $0
- Promotion: Up to $750 cash bonus with qualifying deposit
Ellevest is best for:
- Goal-based investing
- Hands-off investors
- Beginning investors
- Automatic rebalancing
Ellevest at a glance 2018
|Advisory fee||0.25%: Ellevest Digital
0.5%: Ellevest Premium
0%: emergency funds
|Investment expense ratios||ETF expense ratios range from 0.06% to 0.16%|
|Portfolio Mix||ETFs from 21 asset classes|
|Account minimum||$0: Ellevest Digital
$50,000: Ellevest Premium
|Account fees (annual, transfer, closing)||No fee to open, close or transfer accounts|
|Accounts supported||Taxable, IRAs, 401(k) rollovers|
|Tax strategy||Tax-optimized asset location, rebalancing and withdrawal sequencing|
|Customer support||Email, phone, text and chat, Monday-Friday 9 a.m.-6 p.m. ET|
Where Ellevest shines
Addressing women’s needs: As the list of automated investment advisories continues to grow (we review more than 20 of the biggest players before we highlight the top picks), Ellevest’s full-on female-focused approach is certainly an eye-catching differentiator. But is it just a marketing hook?
While a lot of it has to do with approach and tone (which aren’t necessarily gender-specific), one practice is worth highlighting. The advisor says that while the gender pay gap is well-known, less appreciated is the fact that women’s incomes top out and decline sooner than men’s. Combine the earnings gap with a longer lifespan, and women have to surmount a tougher set of obstacles than men to reach their financial goals.
Ellevest addresses this in two ways:
- While other robo-advisors might treat men and women equally when considering their future earnings, Ellevest might recommend a higher savings rate for a female client than it would for a similar male client, because of that lower future earnings potential.
- Ellevest Premium (with a $50,000 minimum) comes with access to one-on-one executive coaching from the company’s career team, which can help women with impactful financial issues like salary negotiations and career transitions. (Premium members also get unlimited access to guidance from CFPs.)
Account minimum and low account fees: There’s no minimum required investment amount to get started at Ellevest. Plus the company is among a select group of robo-advisors that charge no account fees for opening, closing or transferring an account.
Free emergency fund management: Also nice is that the advisor charges no management fee for money held as part of an emergency fund — an improvement over robo-advisers that charge for similar “safety” investments. This emergency fund is invested as cash in an FDIC-insured bank account and earns only a trickle of interest, but it won’t lose principal either. That’s in contrast to Betterment, a competitor at which emergency funds are invested in the market and carry a management fee, too. While holding cash at Ellevest isn’t necessarily better than holding it at your own bank — interest rates are puny everywhere — seeing it incorporated into your plan may help you get a more comprehensive view of your finances.
Supports multiple financial goals: Like large robo-advisors such as Betterment and Wealthfront, Ellevest focuses on getting investors to their longer-term goals. The more unique feature is that the service is designed to help clients reach non-retirement goals, too.
Investors can select any number of savings goals — including saving for a car, house, kid-related expenses or starting your own business. Based on your time horizon, Ellevest produces a customized investment plan that, based on simulations, gives you a 70% likelihood of reaching your goal.
It also provides a dose of reality in terms of trade-offs that may be necessary to achieve multiple goals — for example, how buying a new car this year might delay buying a house and retiring, or how a lower savings rate and less aggressive investments now might affect paying for college in a few years.
Each Ellevest portfolio has specific target allocations: more aggressive funds for long-term goals and more conservative ones for the short term. As you near a goal, Ellevest automatically invests in more conservative funds, helping you stay on track and reach the end. If the portfolio veers too much from the target allocation, Ellevest will rebalance the investments for free.
Large number of ETF classes: Also like other robo-advisors, Ellevest portfolios are comprised of a mix of exchange-traded funds. It chooses from 21 ETF classes, which is more than what even the leading players Betterment and Wealthfront offer. Many of the funds Ellevest uses are managed by Vanguard, a leader in low-cost ETFs. That’s important because on top of the advisory fee, investors pay for the management fees (a.k.a. expense ratios) on the ETFs in their portfolio.
Where Ellevest falls short
Accounts supported: Currently, Ellevest offers only taxable accounts, individual retirement accounts (Roth, traditional and SEP IRAs) and 401(k) rollover IRAs. Trusts and other savings plans such as 529 college education accounts aren’t available.
No tax-loss harvesting: Ellevest does not offer automated tax-loss harvesting, in contrast to its larger rivals. That could be a turnoff for investors with high balances in taxable accounts. The company says that there are too many “ifs” in each investor’s situation to automate the process and that competitors overstate how much tax-loss harvesting boosts a portfolio’s performance.
Like most robos, Ellevest takes pains to put any tax-inefficient securities in tax-deferred retirement accounts and tax-efficient investments in taxable accounts. And when it comes time for clients to make withdrawals, clients are advised in the ways of tax-smart withdrawal sequencing to minimize the IRS’s cut.
Difficult to find information: If you’d like to investigate further on Ellevest’s website, it’s not the friendliest to navigate. Information is distributed across multiple pages, and it’s harder than it should be to locate what you need, such as fees and the types of ETFs.
Is Ellevest right for you?
Being able to meet your goals is the point of investing, and Ellevest is all about helping clients balance shorter-term goals against longer-term ones and understanding the trade-offs across all goals. But it’s not the only robo with that approach: Betterment, for example, also offers goal-based planning with a lower advisory fee (0.25% to 0.40% versus Ellevest’s 0.25% to 0.50%, though Betterment Premium requires a $100,000 minimum balance versus Ellevest Premium’s $50,000 minimum). Both also offer unlimited human advice through their Premium offering (either phone-, chat- or email-based).
What sets Ellevest apart is that it is not gender-neutral: Its investing algorithm takes into account the salary curve and lifespan of whatever gender profile the client chooses. Offering career coaching to premium clients is another way this robo-advisor aims to better its target customer’s financial well-being. Both of these features can benefit investors of all stripes.