Season 2 - Ep. 3 | Break the Bias: Closing the Gender Wealth Gap

Redefiners Podcast
Hosted By:
March 01, 2022 | 39 min
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Sallie Krawcheck | CEO and co-founder of Ellevest

Season 2 - Ep. 3 | Break the Bias: Closing the Gender Wealth Gap

Sallie Krawcheck has boldly redefined companies, entire categories and, several times, her career. Former CEO or CFO of a long list of investment banking heavyweights, Sallie is now the CEO and co-founder of Ellevest, a digital investment platform uniquely created by women for women.

In this episode, we’ll talk about Sallie’s determination and work to help close both the gender pay gap and, perhaps more importantly, the gender wealth gap by encouraging women to invest. Because, as Sallie tells us, when women become investors and cultivate their own wealth, they ultimately have greater freedom and flexibility in their careers and lives. We’ll also talk with Sallie about the positive power of career setbacks and how she used her Redefiner moments of two widely publicized corporate dismissals to springboard into wildly successful rebounds.

We’ll discuss how Sallie’s early career as a research analyst helped her hone her contrarian conviction, a trait she’s leaned into ever since with remarkable success.

To learn more about how you can build a fairer, more equal workplace for everyone, go to www.RussellReynolds.com/insights

To hear more about diversity, equity and inclusion, check out the Redefiners episode, “From Harvard to Hollywood: A Conversation with Debra Martin Chase."

 

Sallie Krawcheck
CEO and co-founder of Ellevest

Sallie Krawcheck is the CEO and co-founder of Ellevest, an innovative financial company, by women for women. Ellevest is one of the fastest growing digital investment platforms and has been named a #24 on CNBC’s top 50 "Disruptor" list, #14 on LinkedIn’s 50 “Most Sought-After Startups”, and one of Entrepreneur Magazine’s Top 100 Brilliant Ideas.  Before launching Ellevest, Krawcheck built a successful career on Wall Street: She was the CEO of Merrill Lynch, Smith Barney, US Trust, Citi Private Bank, Sanford C. Bernstein and CFO for Citigroup. Krawcheck has also been called one of the top 10 up and coming entrepreneurs to watch by Entrepreneur Magazine and has landed on Vanity Fair’s “The 2018 New Establishment List.”

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Sallie Krawcheck is now best known as the CEO and co-founder of Ellevest, an innovative financial company that aims to put more money in the hands of women. Before starting Ellevest, Sallie had a long and impressive career on Wall Street: after cutting her teeth as a sell side equity research analyst, she served as the CEO of Merrill Lynch, US Trust, Smith Barney, Sanford C. Bernstein, and then CFO of Citigroup. But it wasn’t always a smooth trajectory. She had the singular experience of being fired in a very public way—twice—experiences that fired her up to start the first investing platform by and for women.

Here’s a taste of what you’ll hear from Sallie in this episode, in her words (edited for length and clarity):

“There's not a single venture capital firm in the United States of America that's saying, ‘You know the kind of entrepreneur we want to invest behind? A woman in her fifties who used to be the CFO of Citi Group.’”

Sallie’s Redefiner Moment: On finding purpose with Ellevest
My thoughts kept going round and round post running Merrill, post running Smith Barney, post being CFO for Citi private bank. What do I want to do? What am I good at? Where can I have an impact? I was sitting there and all of a sudden the big thought was: the retirement savings crisis is a women's crisis.

Why? 80% of women die single. Women outlive their partners by six to eight years. And when men manage the money in the family, which they still traditionally do, 74% of women have a negative surprise. There's not enough money for retirement, and she's the one who suffers.

At the time where there were a lot of “lean in” books. Everybody was working on the gender pay gap. I began to iterate through it and said, wait a minute, the gender wealth gap is the bigger deal. Women only own and have 32 cents to a white man's dollar, a penny for black women, a penny for BIPOC women. Well, what makes that up? The investing gap. And that's when I started down the road to Ellevest of what matters to me, mission and purpose and change.

On why she went into finance
I wanted money! It was informed by my childhood experience. Every month when my dad would sit down to pay the bills, like clockwork, this couple who were so in love would fight so hard about money that one of them would often leave the home. It was the only place in which they were unequal, where there was a toxic power dynamic between them because my dad made all the money and my mom spent all the money. It was worsened by the fact that they took out loans to send us to private schools.

So why did I go to Wall Street? Because I wanted to earn money because I didn't want to have that toxic dynamic in my life.

On being contrarian
The only way you could really have a hope of breaking through as an equity analyst was to be the one who's standing alone. And the only way you could be right in a big way was to be the one standing alone. Then everybody comes over to your side of the room. I really wanted to be successful, so I had to be contrarian, even though as a Southern female we're taught not to be contrarian—we're taught to be ladylike and to go along and smooth things over. That was a really important chapter in my career.

On helping women achieve financial freedom
At Ellevest, we're trying to solve a problem: how to get women to invest, which nobody's been able to solve at scale. We're not quite sure why they won't invest, but there's an industry hypothesis that they're risk averse.

Maybe they're not risk averse. Maybe it's the industry where 98% of mutual fund dollars are managed by men who are overwhelmingly white, where 86% of financial advisors are men. Maybe they built a business for themselves—not because they meant to, but they did. And maybe there's another way.

I love to say that investing is the best career advice women aren't getting. If you invest, considering that historically the stock market's gone up by 9.7% annually, you're compounding over time and earning the hundreds of thousands of dollars—for some women, millions of dollars—that you’ve been missing out on. So the work we're doing in Ellevest is about having more money, but it's really about having more freedom, more career flexibility, more “get out of the relationship that doesn't work,” “get away from the boss who's a jerk.” It's bigger than money.

To hear more about diversity, equity and inclusion, check out the Redefiners episode, “From Harvard to Hollywood: A Conversation with Debra Martin Chase."

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