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For The Women, By The Women: Unraveling Mystery Of Investing

  • JWB Post
  •  November 18, 2015

 

It’s been a long time since a talking teenage Barbie doll uttered the words, “Math class is tough!” That was 1992, and the uproar that ensued caused Mattel to banish the words from Barbie’s vocabulary.

Today, as men’s and women’s traditional roles continue to blur, companies are even more careful not to reinforce gender stereotypes.

Yet at the same time, two new online investment firms — known as robo-advisers — are introducing products that suggest women need extra hand-holding with their money. They are offering financial and investment advice tailored just for women.

Women are increasingly their households’ breadwinners, and they are more likely than men to enroll in and complete college. Women are also a growing market, exercising decision-making control of an estimated $11.2 trillion in investable assets, according to the Center for Talent Innovation.07money-web2-articleLarge

But do they really need specialized help — any more than the sort of personalized attention that many consumers crave? Or are these firms, backed by big investors, simply grasping for women’s growing wallets?

Amanda Steinberg — founder of DailyWorth, which sends its 1.2 million female subscribers daily emails about money — will soon introduce a robo-adviser for women with Michelle Smith, whose firm Source Financial Advisors caters to multimillionaire women who have been divorced. Their new service, Worth Financial Management, will make its debut next year. But the gendered focus isn’t necessarily being driven by women’s need for extra help, Steinberg said. “I know they don’t like what is out there,” Steinberg, a programmer, said of her subscribers, who, on average, are 38 years old and earn $78,000. “My mission from the beginning was about empowering women to build net worth. Not to get better at budgeting. It was to give them control over their futures.”

Women surely face their own set of challenges. They generally earn less than men, are more likely to take breaks from the workforce, and live longer, all intractable issues that demand societal and policy changes, like less male-focused workplaces and policies.

Helping women account for these handicaps is what is driving Sallie Krawcheck, a former Wall Street executive, into the same business: She recently announced plans to introduce her own robo-adviser, Ellevest, next year.

“Men have more room for error,” said Krawcheck, who became well known on Wall Street after she graced the cover of Fortune in 2002 as Wall Street’s “Last Honest Analyst.” She has held high-ranking positions at Bank of America and Citigroup, and along with her co-founder, Charlie Kroll, raised $10 million for her new venture from several heavy hitters (mostly men) in the financial industry.

The women at WorthFM, as the firm will be known, both divorced single mothers with an unstoppable entrepreneurial drive, have mapped out their approach and raised $2 million from investors — all divorced women. They will focus on the mass affluent, generally someone with less than $500,000 to invest. That amount is usually not enough to capture the attention of many human advisers because of sheer economics.

But an integral part of WorthFM’s approach is to act a tad more like a human adviser — that is, build a relationship first and then get into all the money stuff.

This article was first published here.

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