Ellevest Review: The Only Investing Platform Tailored To Women's Needs
Women are starting to take more control of their money. But they’re still lagging behind men in several financial indicators–especially when it comes to investing. The vast majority of women don’t feel confident about selecting investments or making good retirement investing choices. They don’t feel like they’re in control of their financial futures, and they’re concerned about retirement.
This company was created as a robo-advisor investment platform created by women, for women. The idea is that traditional investment strategies are geared towards men. And women need new strategies to help them take control of their money.
What’s Different about Ellevest?
In all too many industries, the differences between men and women just aren’t accounted for. Take the medical industry, for instance. Women are often excluded from clinical trials, which means results are valid for men but maybe not for women with their vastly different biological makeup.
The same is true for investing. Most investing platforms and advice are based on men’s lifetime earnings curve and shorter average lifespan. That’s why Ellevest was founded. Its portfolios for women take into account women’s unique challenges: lower overall income, different earnings curve, and longer lifespan.
The company also offers an interesting impact investing program that lets women invest in companies that are forward-thinking about women. We’ll talk more about this particular issue later in the review.
How It Works
Ellevest is, at its core, not that different from other robo-advisors. It begins with a questionnaire about your investing needs and goals. Then it gives you portfolio options that let you invest in a way that makes sense for you. The portfolio you choose is automatically rebalanced so that you can continue meeting your goals year after year.
As with most robo-advisors, Ellevest offers different fee structures for different types of accounts. Their digital-only service has no minimum balance and charges a 0.25% annual fee. This is $25 per year for each $10K you have in your Ellevest portfolio. This is a pretty decent fee among robo- advisors.
Ellevest’s premium service includes additional features, which we’ll discuss below. It carries a $50,000 minimum account balance and charges a 0.50% annual fee. This equals about $250 per year for a $50,000 account balance.
Ellevest also offers a private wealth management tier for those with a $1,000,000 minimum account balance. The fees for this vary, and you’ll need to talk with a representative to find the fees for your particular situation.
Besides these basic fees, Ellevest, like other robo-advisors, includes expense ratios on the exchange-traded funds you invest in. The ETF expense ratios range from 0.06% to 0.16% and are a little better than the industry average.
The Ellevest model includes ETFs from 21 different asset classes, which means you can get a diverse, varied portfolio with it. In fact, it offers more variety than either Betterment or Wealthfront, two of the leading robo-advisors in the market today. Many of their funds are managed by Vanguard, which has very low-cost ETFs. This can help keep your overall investment costs low.
You can easily get started with Ellevest, event with no money, since the basic account option doesn’t have a minimum balance. To upgrade your account, you’ll have to have a minimum balance of $50,000. And Ellevest offers premium investment advising services for those with a balance of at least $1 million.
Types of Accounts
This is one place where Ellevest falls short of some of the other major robo-advisors on the market. It currently only supports a few account types, including: taxable accounts, IRAs, and 401(k) rollover IRAs.
If you’re already well into your investing journey, Ellevest premium might be the right option for your needs. This option has a $50,000 account minimum. But when you upgrade, you get more personalized asset management, including one-on-one guidance from Ellevest’s Certified Financial Planners for overall money advice. You’ll also get career-boosting advice in one-on-one sessions from Executive Coaches, who offer advice on career events and salary negotiations.
Besides this, Ellevest Premium offers a personalized investment portfolio with automatic rebalancing and unlimited support from the Ellevest Concierge Team.
You can choose to invest in one of Ellevest’s Impact Porfolios at any investing level. These let you invest up to half your portfolio in companies that advance women for social change. These include companies with women in leadership, companies that meet high sustainability and ethical practices, and companies that support women-owned businesses and community services.
Ellevest’s Impact Portfolios include asset class diversity with stocks, bonds, and alternative investments. You can learn more about these options here.
Most robo-advisors focus only on goals for retirement or financial freedom in general. Ellevest is unique in that it will also allow you to invest for other goals, including a child’s education or saving for a home.
You can set up goals for starting your own business, buying a car, or just about anything else you can think of. Ellevest will then provide you with a customized investment plan that makes it likely that you’ll reach your goal. You can also use their tools to look at a variety of ways to achieve your goal or how saving for one goal might affect saving for another goal. As you close in on your goals, Ellevest automatically pulls funds from more aggressive but volatile investments into more conservative investments so that your money is likely to be available when you need it.
Free Emergency Fund
With Ellevest, you can actually get a free emergency fund to go along with your investing goals. They’ll calculate your goal as three months’ worth of take-home pay and show you the quickest way to save it up. This fund, unlike those related to other goals, is stashed in an FDIC-insured account so that your emergency fund is always available when you need it.
One of the biggest drawbacks with Ellevest is that it offers relatively few account types. If you’re looking for a place to put your IRA, it can be a great choice for that. Or if you want to roll your 401(k) into an IRA, this will also work for you. And, if you’re investing for a specific shorter-term goal, Ellevest’s taxable accounts are a good option.
However, if you need a trust, 529 plan investment, or other type of savings plan, you’ll be out of luck with Ellevest.
Ellevest also doesn’t offer tax-loss harvesting, which can be a problem if you have a lot of money in a taxable account. It offers tax-efficient investing plans, but no formal tax-loss harvesting.
Is Ellevest a good Option for You?
If you’re a woman who doesn’t want to handle all your own investing decisions, Ellevest could be a great option for your needs. It does offer services to men, too, of course, and simply uses a more traditional income curve and longevity formula when making calculations for men. But for women, Ellevest’s customized algorithms that take into account our income and life-span differences could make a huge difference.
This is also a great robo-advisor if you’re interested in impact investing specifically in company’s that are good for women. Many robo-advisors do offer impact investment options. But most focus more on eco-friendliness or developing countries and communities versus women specifically.
Ellevest is overall an affordable option as a robo-advisor, and it can be a great way to put your money to work–both for you and for women-owned or women-benefitting companies.