POWER Breakfast: Sallie Krawcheck, Ellevest

On September 17, 2019, a sold out crowd gathered at the University Club to hear Sallie Krawcheck speak about her experiences in the investment industry, how the industry landscape is changing, and her journey with Ellevest—a digital investing platform that she founded. It was an invigorating address in which Krawcheck tore up the script and gave an honest perspective on the investment industry and women’s current—and future—roles within it. Before diving into her journey with Ellevest she explained it’s origin.

Life before Ellevest (Sallie’s former perspective, parity in the industry)

Prior to founding Ellevest, Krawcheck had an illustrious career on Wall Street working for names such as Smith Barney, Citi, and Merrill Lynch. She was an accomplished research analyst at Sanford C. Bernstein & Co and quickly rose to be CEO. After continued success, she was offered the CEO position at Smith Barney and then the CFO position at Citi. She then transitioned to be the CEO of Citi Wealth Management followed by CEO of Merrill Lynch Wealth Management. After building such a stellar reputation she had some people approach her asking if she would ever develop an investment platform for women, “because I was a woman, and I worked in investments!” She admit that at first she shunned the idea thinking it was “junior varsity” while she was already excelling in the big leagues. However, a few experiences began to shift her perspective. Notably, her departure from Merrill Lynch wealth management made her think about the role of women in finance. Her experiences coupled with the habits of a researcher led her to more seriously investigate the idea.

Research that inspired Ellevest

Krawcheck informed the crowd that women hold 71 cents of every dollar in cash and only 2% of US households have women that lead investment decisions. She attributed these statistics to women’s general emotional block when it comes to money. She even shared some personal experiences from her own childhood that she believed made her more risk averse—or rather, risk aware. Krawcheck conjectured that these types of experiences are pervasive in American women’s childhoods. She further conjectured that the way women are brought up in America leads to modern money media not resonating with women because it is more male-centric. Thus, the messages from money media that supposedly geared toward women “are wrong.” The icing on the cake—women outlive men on average, often by several years. This means that many women are left to fend for themselves in the waning years of retirement. Armed with this information, Ms. Krawcheck came to the conclusion that “the retirement savings crisis is a women’s crisis.”

Early stages of Ellevest

After resolving that she would start an investing platform for women—a resolution that came to her in a moment of intense inspiration while putting on mascara—Sallie got busy doing what was necessary to build a world-class organization. She started by gathering a world-class team of people with experiences spanning from finance, tech, marketing, and operations—most of whom were women who identified with Sallie’s mission. That has persisted through the growth of the company as well. In fact, two-thirds of Ellevest’s employees are women. However, Sallie was not ashamed to reveal that there is also a mix of men on her team.

After her team was assembled they began looking for investors. Many of Ellevest’s early investors came from Chicago—Morningstar, Penny Pritzker, and Mellody Hobson were among those named. Once they had obtained funding and put together a beta product they embarked on research, largely through social media. Sallie and her team started with outreach to gauge interest in their product. What they initially found was startling but what they observed over time was exhilarating. At first women had one of two reactions to the idea of Ellevest: about 60% said “I’m interested” while the remainder said, “no thanks, why would I invest my money with Junior Varsity platform?” The latter was admittedly similar to Sallie’s initial reaction to an investing platform built for women. However, over time they saw a shift in sentiment.

As the women that responded with “no thanks” began to research Ellevest they became intrigued. They began to see that Ellevest wasn’t just some Junior Varsity platform. Instead, they began to see a well-constructed tool that resonated with them. Sallie and her team were diligent with their social media and their support base continued to grow through these efforts. Today Ellevest has the largest social media following of any financial firm.

Conclusion (vision)

Krawcheck closed her keynote saying that even while Ellevest continues to grow, she keeps an eye toward the future of women in finance. While she naturally hopes that Ellevest continues to find success and grows into a durable and profitable organization, she is also mission-driven and hopes that she is able to “create a world where fewer women are afraid of finance.” Krawcheck does this herself by acting as Chair to both Pax Ellevate Management and Ellevate Network—two organizations that are advocates for women in finance. Beyond her own endeavors and venture she simply hopes that more organizations find value by investing in women, even though that may lead to fiercer competition for Ellevest.

The keynote was then followed by Q&A:


What kind of outreach efforts does Ellevest employ?

None, really. Ellevest is a startup after all and so it is focused on survival. Due to the high entry costs of succeeding in the financial services sector Krawcheck and her team must prioritize their goals aggressively.

What, in your opinion, is the biggest and most positive change for women in finance?

That women are finally fighting for themselves. More specifically, that they are starting their own companies! Seeing people—men and women alike—join in to Ellevest’s vision of connecting with women has also been great, despite the competition it brings Ellevest.

What other organization help women with financial literacy?

Books of the academic persuasion have been the source for years. But they are dense and few people really take the time to understand them. Ellevest has been using social media to “chop-up” the education into more digestible bits of information. Another organization unaffiliated with Ellevest is Girls Who Invest, which targets female college students for asset management jobs and internships. The also provide a continuous community for women in asset management to access for guidance and growth.

How do we change the perception about women in the finance industry?

It is a message that has to first be communicated from childhood and money media needs to do a better job of connecting with women.

What is your 5-10 year vision for Ellevest?

To build a successful business, naturally. But to also change the way women talk about money and accelerate the national conversation about women in finance.

What is the fix for the fear resulting from the #MeToo movement?

First, people in the industry need to know that there has only been one case of a wealth management executive being fired for sexual harassment—and he was found to be guilty of the harassment in a court of law. But women can create a shift in this fear by starting their own businesses and bringing in fellow women.

What has been your secret to success?

Don’t be afraid to take risks. Krawcheck shared that the best advice she ever got when she was an equity research analyst was that she should make “big calls on big stocks.” This led to her making some controversial calls but they played well and she ended up making the right call.

What kind of men do you work with at Ellevest?

Feminists. But they are not feminist in the radical sense, they are feminist in the sense that they share Ellevest’s mission to create equality in investing.

Economic Outlook and Policies

On January 16, 2019, a profound reflection on economic policy, politics’ influence on it, and the US economic outlook took place at the Standard Club in Chicago. The discussion was moderated by CFA Society Chicago’s very own Lotta Moberg, CFA,—with William Blair’s Dynamic Allocation Strategies team—and featured David Lafferty, senior vice president and chief market strategist at Natixis Investment Managers; Nicholas Sargen, chief investment officer for the Western & Southern Financial Group and chief economist of its affiliate, Fort Washington Investment Advisors Inc.; and Jas Thandi, associate partner of Aon Hewitt’s Global Asset Allocation Team. The discussion began with setting up the big picture of the world economy with the US as the focus and then progressed to cover the panelists’ outlook on how central bank policies and deregulation will play out in the US. Finally, the panelists shared their perspectives on the future of globalization before offering some concluding remarks. After the panel discussion was completed, Moberg opened the panel to Q&A.

Sargen kicked off the discussion by encouraging the attendees to “not focus on the tweets”—referring to the President’s activity on Twitter—or even the Federal Reserve. Instead, he encouraged people to focus on economic policy. He walked through the story of Trump’s economic policy since he took office citing the corporate tax cuts and deregulation in 2017. Sargen explained his view that these policies carried the markets through 2017 and by 2018 most of this positive news was already priced in to the market. The realization that these policies were already priced in combined with the new developments in the China Trade War led to 2018 falling flat by the end of the year. He closed his opening remarks citing political gridlock in America and a global economic slowdown as the continuing risks for markets. Lafferty continued the conversation agreeing with Sargen on all counts and expanding with his views on the global economic slowdown. He laid out a view of global deceleration across all major asset classes stating that some of the pessimism is already priced in. Lafferty even conjectured that he believed most broad asset classes were not far from fair value. However, none of these broad asset classes are currently priced for recession. Thandi rounded out the opening remarks by emphasizing politics’ growing role in markets and bringing focus back to the U.S.-China trade war and its implications on global assets—especially in Europe. He expounded on his European focus by pointing to the ECB and the need for investors to be wary of their policy actions as well. He wrapped up the opening remarks by touching on the increase in supply of treasuries due to the runoff of the Federal reserve balance sheet and the impact we should expect to be seen in the credit markets. This final point set up Moberg’s next point of discussion: how will the U.S. markets react to recent U.S. government and FED policies?

Thandi picked up by stating his belief that the U.S. economy would experience a soft landing due to some growth from the tax stimulus. However, he has been surprised by the way capital expenditures by corporations has “fallen off a cliff.” Lafferty followed Thandi’s comments regarding low capital expenditures by explaining that the execution of economic policy can have an outsized impact. Lafferty explained to attendees that the corporate tax cuts should have incentivized companies to spend more on capital expenditures, however, due to recent protectionist rhetoric from the President many companies became cautious to make capital expenditures due to political uncertainty. Lafferty also stated that the current political gridlock in the U.S. government could be dangerous for markets should any major problems arise. Despite these warnings, Lafferty too expressed some optimism stating his belief that we are merely experiencing a slowdown. However, he cautioned that Federal Reserve adjustments could have already killed the expansion. Sargen agreed with Lafferty regarding Fed policy and shared his view that the Fed’s communication regarding policy has been poor. He also revisited Thandi’s point of the tax cut stating his belief that the resulting stimulus would run its course by mid-2019. However, Sargen also supported the view of a soft landing stating that the U.S. would not experience a recession this year—but a recession beyond that short horizon is likely.

The next topic for the panel was deregulation in the US. Before this topic was kicked off Lafferty offered thoughts by first stating that there has been a surprising focus on regulating new forms of systemic risk and investor protection. He cited the growth of the ETF market as a point of concern for regulators. After making this point he explained that deregulation has been positive for smaller shops as it has eased their regulatory burden. Sargen expounded on this point by saying that executives overwhelmingly prefer less regulation—no matter the size of the company. He pointed to the current political landscape saying it is no longer as supportive of deregulation due to the democratic party’s representation in the House of Representatives. Thandi offered the final thoughts on this topic by stating that deregulation has only had a small impact. He explained that there were short term gains from deregulation but they were muted due to tariffs resulting from the U.S.-China trade war.

After the deep dive into recent developments in the US the panel transitioned to discuss the future of globalization, both in the US and across the globe. Thandi started off by discussing the recent protectionist rhetoric not only in the U.S. but across the globe citing Brexit as a major example. He explained that such policies will lead to consolidation in equities as large companies seek growth through acquisition instead of organically. Ultimately, Thandi believes these policies will lead to a lower growth environment. Lafferty agreed that protectionist policies appear to be growing in developed markets and will lead to a lower growth environment. Further, this lower growth environment will lead to stunted performance in passive investment strategies. He also expects these protectionist policies to cause more volatility in markets. Lafferty’s final point on the matter was that with the combination of low growth and higher volatility investors will allocate more capital to active investment strategies.

Finally, the panelists concluded the evening with their final thoughts:


  • The trade war is not about prices but about national policy, specifically the U.S. is targeting the “Made in China 2025” effort.
  • Regarding monetary policy, backtracking on Quantitative Tightening is actually bad for equities because it signals the Federal Reserve doesn’t have faith in markets’ strength.
  • The dollar will be stable or bearish in 2019.


  • Reforms and policy decisions in Europe will be more influential than the media is portraying.
  • Assuming a soft landing for the U.S., emerging markets already had their correction and are due for a rebound.


  • Alternatives such as private equity are an attractive investment.
  • Passive investment strategies generally outperform hedge funds in the long run.

After the discussion was concluded Moberg opened the panel to Q&A:

Does it matter who Trump’s Economic Advisor is?

  • Sargen: No.
  • Lafferty: No.
  • Thandi: No.

Is international diversification out of date?

  • Thandi: No, however correlations have lowered with globalization. Currency risk still plays a big role.
  • Lafferty: No, however Emerging Markets are no longer as attractive in the long run because growth has slowed. Low correlations have become much rarer due to an interconnected global economy.
  • Sargen: No, but benefits of international diversification are not as attractive. Additionally, investors should be wary of diversification into bonds as the Federal Deficit continues to grow.

What is the big thing the general consensus is missing?

  • Lafferty: Bubbles in the capital markets.
  • Sargen: Global leaders are running out of policy ammunition to deal with crises.

What will volatility be in the next 6 months?

  • Sargen: Choppy.
  • Lafferty: Low 20s as opposed to low teens (referring to the VIX Index level).
  • Thandi: Choppy.

Fintech Part 2: Rise of Robo-Advisors

David Koenig, CFA

CFA Society Chicago hosted Rise of Robo-Advisors, the second fintech event of a three-part series. The event was held at The Standard Club on April 19, 2018, commanding a crowd of over 120 people. The event started with a keynote address and was followed by a panel discussion with thought leaders in “Robo-Advisory.” Those in attendance were able to participate in a Q&A session at the end of the event.

David Koenig, CFA, the keynote speaker, is chief investment strategist for Charles Schwab’s digital advice solutions. He helps oversee Schwab Intelligent Portfolios and provides research and analysis about automated investment advisor services. He opened with an introduction to what “Robo-Advisory” really means and provided some background on the topic as well as the agenda for the evening:

  • How technology is changing investment advice
  • Robo-Advice Landscape
  • The rise of technology in investing
  • Where the industry is going
  • Panel Discussion
  • Q&A session

Koenig continued to give a breakdown of how today’s clients interact with technology and how technology is developing in business. He explained that clients are using a variety of devices throughout the day for a variety of tasks from utilizing GPS to ordering lunch online. This attachment to technology has also become pervasive in the business environment from digitizing paperwork and payment systems to hosting virtual meetings. After highlighting the breadth of technology in our lives, he continued to discuss the types of technology we use today—such as social media, mobile processing, and automated payment processing—and what kind of technology we can expect to see in the future through machine learning algorithms and artificial intelligence.

Once the audience had an understanding of the current and prospective technology landscape, Koenig proceeded to discuss the current client experience in financial services. He brought attention to how little time the average investor spends contemplating investment decisions. For reference, he highlighted that, on average, people will spend more time deciding whether or not to take a vacation than make an investment decision. This appears to be due to customer’s lack of satisfaction with the advisory process. Customers tend to classify investment advisory as tedious, intimidating, and inconvenient. However, robo-advisory is shifting that mindset.

Koenig opened the discussion of the current robo-advice landscape by emphasizing that current models typically do not work directly with customers of investment advice. Instead, they work through traditional advisors to empower their decision making and automate redundant technical tasks. This technology has led to more sophisticated advice and asset management being delivered at a significantly lower cost. He went on highlight that this business model was developed by corporate fintech innovators such as Betterment and Covestor and validated by advisory incumbents such as Charles Schwab and Vanguard.

The discussion continued to present the different business models that have emerged over the years: the fully automated robo-only model, virtual advice using both robo and a traditional investment advisor, and institutional services. The robo-only model’s greatest advantage is the extremely low or non-existent investment minimums. The virtual advice model takes all the power of robo model and leverages the skills and experience of a financial advisor. These two models make up the current retail landscape of robo-advice. Koenig also briefly discussed institutional robo-advice in the business-to-business landscape. He highlighted the streamlined client communication and onboarding processes, automated risk profiling and account aggregation, intelligent portfolio construction and rebalancing, and the attractive interface of the modern advisor dashboard. All of these advantages have led to significant growth over the past four years alone—145% compounded annual growth to be specific.

After familiarizing the audience with current landscape, Koenig went into detail about what makes digital advice so appealing. He began by introducing many of the common myths associated with robo-advice and proceeded to break each one. First, he introduced the myth that “robo-advisors are only for millennials.” This was followed by a chart showing that, in fact, baby boomers and Gen X clients are actually the biggest consumers of robo-advisory taking up 44% and 34% of the market, respectively. Next he addressed the myths that “robo-advisors are only for less sophisticated investors” and “robo-advisors are only for small accounts.” These myths were met with examples from Koenig’s personal experience in robo-advisory where he has aided with the direction of several high-net worth and sophisticated accounts. Finally, he addressed the myth of “robo-advisors are going to replace humans” where he once again drew on his own experience to once again explain how the technology is actually used. He emphasized once again that robo-advisory is not replacing traditional advisory, but rather empowering it. His discussion of these myths was closed out by a series of metrics that displayed current investor interest in robo-advisory and highlighted opportunities to educate.

To conclude the keynote presentation, Koenig covered where robo-advisory is going. He drew attention to the fact that it is growing rapidly and differentiating across various financial service functions. He discussed how the implementation of newer technology such as artificial intelligence, chatbots, and machine learning algorithms will continue to empower and change the landscape of financial advisory by adding a heightened level of personalization to the technology. Additionally, he emphasized that he expects consumers will demand both digital and human advice; further perpetuating his message that robo-advisory will empower traditional advisory rather than replace it. He closed out his presentation with a quote from a recent Morningstar editor’s letter stating “Maybe [robo-advisory] automation will make the advisory experience more human.”

The second half of the evening featured a panel discussion moderated by Sunitha C. Thomas, CFA, regional portfolio advisor at Northern Trust, and included speakers Joel Dickson, Sylvia Kwan, and Dan Egan. Each of the panelists introduced themselves and discussed how they leverage robo-advisory for their clients.

Joel Dickson is Vanguard’s global head of advice methodology. As one of the first widely-recognized incumbents to enter the robo-advisory space, Dickson and Vanguard have focused on maximizing their advisors’ alpha, managing global portfolios, and maximizing short and long term goals for clients. They accomplish this through lowering incremental costs to attract clients and automating rules-based tasks as well as implementing continuous risk-profiling of their clients. This continuous risk-profiling is starting to replace more traditional portfolio “bucket” assignments. He also emphasized that robo-advisory has allowed Vanguard’s advisors to focus more on the advisory services by catering more to individual client preferences and goal-focused information.

Sylvia Kwan is the chief investment officer at Ellevest, a technology-enabled investment platform redefining investing for women. In her role, she is responsible for developing investment portfolios and proprietary algorithms that drive Ellevest’s investment recommendations. Ellevest is trying to bridge the investment gap between men and women as current data shows that women are substantially under invested when compared to their male counterparts. Kwan explained that portfolios are assigned through the use of a goals-based questionnaire and client engagement is maintained through a variety of communication channels including their “What the Elle” newsletter. They initially engage their clients through social media and their current community of female investors.

Dan Egan is the managing director of behavioral finance and investing at Betterment, one of the first-movers in the robo-advisory space. Betterment’s value proposition is to “connect common investors to quality advice.” They don’t assign portfolios as much as they allow customization coupled with quality education. With their current product they are working to automate as much as possible and allow their advisors to focus more time on the human element of the business. They use social media to engage clients but their primary source of engagement has been word of mouth and they maintain engagement through precise communication catered to individual clients. This communication includes sharing education on investment planning as well as market news. Machine learning is becoming an increasingly integral part of this communication process.

All of the panelists explained that their current business models are built on advisory fees and a focus on goals-based investing. Additionally, as technology continues to develop and automate the more mundane elements of financial advisory, they are increasingly seeking advisors with greater communication and people skills. The event concluded with a Q&A session.


As investing tasks become more automated will investment managers continue to be held accountable for performance? Yes, but accountability will be less focused on short-term and investment philosophy performance and more focused on goal achievement and catering to client engagement.

What has been the conversion rate from traditional to robo-advisory? While nobody could provide an exact metric, the general consensus was that it has been high, especially in more recent years.

Can behavioral coaching be coded? With enough time, yes. However, that technology appears to be in the far future and will likely not be a major impact in the next decade.

How satisfied are people with robo-advisory and how is satisfaction gauged? The success of robo-advisory platforms are measured through client surveys and the current data shows satisfaction rates are high. However, each of the events’ presenters were quick to point out that robo-advisors have yet to endure a recession.