Me? Start a "For Women" Business?? It's Complicated...
By Sallie Krawcheck
“Sallie, you should build a digital investment platform for women.” This from a serial entrepreneur.
I’ll admit it: I bristled.
We women don’t need our own investing platform, I argued. After all, there are plenty of platforms out there, plenty of products out there, plenty of advisors out there, plenty of financial education out there. What’s more, women aren’t some monolith to be marketed to, on the basis of our possessing different body parts than men.
Driving my reaction was what I assumed was the undertone of this gentleman’s message: I’ve heard over the years that women are “bad at math,” we need more financial education to even get us ready to invest, the experience needs the old “pink it and shrink it” treatment. Junior varsity stuff.
Well-intentioned, no doubt, but no thank you.
This view was reinforced by my experience in the investments industry. The substantial majority of clients at the large investing firms are men. Thus, the thinking goes, we women actually won’t invest. It’s because we’re too risk averse to invest or be good investors, and we leave it to the guys.
But I started digging.
And the excuses not to take a run at this business idea continued to pile up: others who have launched investment offerings targeted to women have failed, including Women & Co. at my old company, Citigroup. Those who started higher-end content offerings in the space shifted to more “lifestyle” type of stories, in order to pick up more clicks.
And so women are a “niche market” for the industry.
But, I began to wonder, is the “women are a niche market” thing a cause (we just won’t invest, that’s just the female DNA) or an effect (no one has figured out how to serve us well)?
I dug some more. And some of the conventional wisdom around women and investing began to fall away. For example, the view that women are “worse” investors than men simply isn’t true. In fact, the research indicates that we earn equal – or higher – investment returns. This is true for women hedge fund managers, mutual fund managers and individual investors.
Among other findings: the genders seem to process risk differently. While I have been told for years that we women are more “risk averse” than men, I would reframe it to say that we are more “risk aware” than men. This heightened attention to risk is not being fully addressed today.
So perhaps there is a bridge to be built here.
But, I’ve got plenty on my plate. And did I mention that others have failed when they took a run at this?
Add this to the recognition (which I’ve written about) that the retirement savings crisis in this country will disproportionately affect women….and that money is a top-rated stressor for women….and that women are less-well-prepared for retirement, and it seems to me that “Hey, it’s been tried before and people failed, so it just won’t work” feels like the wrong answer.
But, honestly, the first step on this journey has been my peeling away my reflexively defensive preconceptions of what “for women” has to mean. As well as any urge to be cynical about it. And any fear that we’ll fail as we try something different.
In my opinion, this issue is too important for all of that.
And so I’ve challenged myself, and the Ellevest team, to take this on: not to build a business that simply markets to women, but to work first to really understand what women need in order to invest, and then to bridge the existing gap. To do so, we’ve pulled together a diverse group, to look at this challenge from several new perspectives. As we've spent months researching and testing, the conclusion that an innovative approach is needed is coming through loud and clear.
Stay tuned. And keep up with us as we build this at Ellevest.com.
(Oh, and if we fail, I hope a bunch of folks are lined up right after us, with their own approaches, to work on solving this problem.)
This originally appeared on Linkedin.
Have more questions? Follow up with the expert herself.
Sallie Krawcheck’s professional mission is to help women reach their financial and professional goals (or, put more bluntly, to get more money into the hands of women), thus enabling them to live better lives and unleashing a positive ripple effect for our families, our communities and our economy. To that end, Krawcheck is the Chair of the Ellevate Network, a 135K-strong global professional women’s network; she is also the CEO and co-founder of Ellevest, a... Continue Reading
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