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‘Not just Sallie’s view’: How Sallie Krawcheck sets Ellevest apart

Ellevest’s brand has something no other digital investment startup has: Sallie Krawcheck.

If you’re a customer of Ellevest, you get targeted Instagram advice in the form of short “Ask Sallie” questions, answers and video clips, interspersed with quotes from iconic women. You’re also receiving weekly newsletters from Krawcheck called “What the Elle,” in which she provides her thoughts and advice. And sometimes you’re getting emails from Krawcheck with quick reactions to current events to let clients know where Ellevest stands. The company has been developing its brand without a big marketing or creative team, Krawcheck said. It launched in May 2016. Last month it hired its first chief marketing officer.

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Ellevest has 24,300 followers on Instagram, whereas Betterment’s following stops at 2,419. Wealthfront’s account isn’t active. Krawcheck, once a Wall Street heavy hitter and now Ellevest CEO, said she’s used her own brand to get Ellevest going.

“You do it from a standing start at Ellevest, with one Twitter follower, and it’s hard to make a lot of impact there. But given that I’ve got a substantial following, beginning the conversation there and also bringing it to Ellevest made a lot of sense.”

“It’s really important to get this message out,” Krawcheck said. “We talk a lot about equality and empowerment and the positive impact of women moving ahead, but the truth is money is at the bottom of so much power in a capitalist society. But it’s sort of viewed as tacky to talk about.”

But Krawcheck has been building her own personal brand since before the launch. If you’ve seen her in the news for the past two years, you’ve probably seen her talk about how women’s careers are different from men’s — so their retirement planning should be too; how women control over $5 trillion in investable assets; or why men and women won’t be equal until they’re financially equal.

The timing couldn’t be better. Krawcheck’s vision for Ellevest extends back long before the 2016 U.S. presidential election, but she said the business began seeing significant momentum this spring — shortly after Donald Trump moved into the White House, inciting the Year of the Woman and the movement to make women’s voices heard better now than ever. It’s a very good time for Krawcheck, who’s already so outspoken, well known and politically “on,” to tie her own brand into Ellevest’s.

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Krawcheck does not hesitate to talk about her own experiences — failures, specifically.

“On the messaging branding side it really came from putting our heads together,” Krawcheck said. “From spending time with and understanding Elle.” “Elle” is the name Ellevest employees use to personify their typical customer.

But there’s a level of Inception-like marketing-speak. “But it came from us too because we are, to some extent, Elle.”

Today, 40 percent of Ellevest engineers are female; women comprise 47 percent of its product engineering organizations. Its executive leadership is 70 percent female.

Again and again Krawcheck tells stories during media appearances of the two times she was publicly fired when she was at the top of her game (in her last career) first as CFO of Citigroup and then as president of Bank of America’s global wealth and investment management division; about how much the timing of her outings sucked since her children were hospitalized shortly after that; why she thinks she was fired because she was a woman (since women tend to be more focused on client relationships and long-term outcomes than men); or when she learned of her ex-husband’s affair with a friend.

And she makes fun of herself, noting how “after drinking all the wine” she picked herself up, or quipping: “I’ve got nothing against middle-age white guys. I’ve been married to a couple of them.” Of course, she’s always selling Ellevest to readers and viewers. But Krawcheck’s cult of personality is so strong, maybe the ones that can tell don’t mind.

“We are looking to build a company for the long term,” Krawcheck said. “That said, what we hear from Elle is she wants to know us, know who’s behind the company and she wants to take her measure of them. Naturally that means it’s me.”

It’s not just the fintech companies whose products are starting to look the same. Just as they’re adding human advice, legacy firms whose value proposition have always centered around human advice are adding the digital feature. The growing competition doesn’t phase Krawcheck, who believes multiple firms can meet the array of different client needs. It’s harder for legacy firms though, who may not fully understand their clients, she said.

“Everybody is kind of borderline offering the same thing,” she said. “I will argue until the end of today with you that ours is better in X number of ways, that there are a number of things we do that are technologically more advanced than others and I expect that people will catch up with that at some point… but I think the truly great, iconic companies are ones that had great brands and really understand their client base.”

Last week Ellevest raised $34.6 million in fresh funding. Its lead investors — Rethink Impact, a new U.S. venture capital impact fund with a gender lens, and PSP Growth and Salesforce Ventures — are pretty on-brand for Ellevest. At the head of PSP Capital is Penny Pritzker, the former U.S. Secretary of Commerce.

“I went to sleep one night and thought to myself, if I could have any investor who would it be? And I woke up at 3:30 in the morning and thought: Penny Pritzker. Because of the work she had done at the Commerce Department for advancing women and because of their reputation for building long-term successful companies.”

Krawcheck maintains that despite how well her own brand has translated to the Ellevest brand, there’s an important distinction between the two, noting that Ellevest isn’t about “just Sallie’s view for what women want.” The company has clients in the office frequently to hear about their needs and what they want to see in the service.

“Everybody told me not to [start Ellevest]. ‘Women don’t wanna invest, their husbands do it for them, they’re risk averse’ — I’ve heard it all. But so be it… if I want to make an impact in this life, in this world, and given my background, this is really the way to do it.”

Photo: Getty Images

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Why microinvesting app Acorns is trying to become a publisher

In the age of infinite content, every financial brand has a content marketing strategy. But Acorns, the popular microinvesting app, insists its online magazine is part of a much deeper mission to educate customers.

In the winter of 2015, Acorns hired Jennifer Barrett — who came from CNBC and has held various editorial roles covering personal finance at Daily Worth, Newsweek and the Street, as well as other roles at Hearst Magazines and NBC Universal — to launch and run Grow, a personal finance site for millennials that’s separate from the app itself, as its founding editor. The following summer, she added another title to her name: chief education officer of Acorns.

“When we launched the Grow site at the beginning of last year, there really wasn’t much out there that was targeting millennials in terms of money sites,” Barrett said. “That’s obviously changed in the last year and a half. But at the time… we were filling that need.”

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Though Grow is published by Acorns, its content is pretty Acorns agnostic. Recent news headlines include How Amazon’s Whole Foods Takeover Could Affect Your Money, How Much Impact Does a CEO Have on a Company’s Stock? and What to Know About Trump’s Budget Proposal.

The only ads it runs are for the Acorns app, but it otherwise operates like a standard editorial site. Barrett, now as editor-in-chief of the site, leads a team of about 20 financial reporters recruited from news outlets like the New York Times, Bloomberg and Kiplinger on a freelance basis. There are about 12 reporters she counts as its most frequent contributors.

The site has also formed editorial content-sharing partnerships with sites like Business Insider, Refinery 29, Forbes and Marketwatch — though it doesn’t pay for placement, Barrett said.

“There are various arrangements — traditional editorial syndication arrangements or editorial partnerships where we promote their content and they promote ours,” Barrett said. “They’re based on the understanding that the content they get from us is going to experience a pretty high level of vetting and we aren’t sending them content that promotes Acorns.”

Grow has had more than five million since its early 2016 launch, according to Barrett. Readers and converted to Acorns users and vice versa, Barrett said, though she didn’t specify a conversion rate. Acorns runs some Grow content in the app, and Grow has a specific section dedicated to showing users what Acorns is and what they can get out of it that doesn’t mix with the rest of the editorial site.

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In its inception, the company saw the site as a value-add for Acorns users, but Barrett maintains that vision has extended beyond its existing Acorns user base to include all potential users or even just passers by of the editorial site. She declined to say how much of Acorns budget is dedicated to Grow.

“There was an intention from the beginning to integrate education into the product so we can help our customers become confident and successful investors,” she said. “Beyond that, our mission is to look after the financial best interest of the up and coming.”

Acorns has more than 2 million customer accounts, it reported earlier this summer — 600,000 of which were opened in 2017 alone — and projects it will have processed a billion trades by the end of the year. Its large legacy competitors, like Fidelity, are expected to do 60 million in the same period.

Acorns is currently in the midst of a Series D fund raise, which currently totals $70 million from backers like Bain Capital Ventures, PayPal, Greycroft Growth Fund, e.Ventures Growth Fund, NYCA, Capital Group, Rakuten, Point72 and Ashton Kutcher’s Sound Ventures. As the app evolves, Grow is sure to evolve with it. Barrett teased potential features, like video and “bite-sized” content.

Such ideas are part of ongoing conversations about how to measure impact, Barrett said.

“We’re at the point where we can integrate more articles into the app and can think about different formats,” she said, adding that it’s easier to measure impact with existing Acorns users because they already have insight data and insight on their behavior.

“One of the challenges or frustrations is you write a story with the intent of helping the reader but you don’t really know what kind of impact you’ve had. We spend a lot of time talking about how we can measure that impact.”

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Why finance brands are so hot on content marketing

With more and more companies — startups and legacy firms alike — increasing content marketing for their customers, it’s no longer much of a “differentiator” as it once was for some fintech startups trying to distinguish their offerings.

For example, Acorns recently ran an article called “First-Time Home Buyers Share What They Got Right—and Wrong.” Chase ran something similar under the headline “How this millennial woman bought a home on her own.” Meanwhile, Wealthsimple ran “How To Know What Kind of Mortgage You Can Afford.” A sea of sameness engulfs these companies, a problem when you’re trying to stand out.

Firms from Chase to Acorns to Bond Street are on a mission to educate customers and promote financial literacy through content marketing — something previously done, for the most part, by employees of the bank — to keep up with customers’ increasing need for control and self-service. It’s clear they’re trying to keep emotional ties with customers strong, since most opt to manage their money digitally now, through a banking app or roboadvisor.

“They don’t want people to park their money and go,” said April Rudin, chief executive and founder of wealth marketing strategy firm The Rudin Group. “Content is one way to make people return back to their site to add more money, to add value… The problem is there’s no one-size-fits-all advice for customers, and the majority of the firms haven’t figured out how to serve up content that’s not one-size-fits-all.”

Good advice — and content — will ensure people will return back to their site to see new updates, buy new products and invest more money. Many of the accounts being targeted in the content are on the lower asset level, but to keep business running, firms need more investors, larger investors and ultimately to grow their assets under management.

“Content marketing is not a nice-to-have; it’s a must-have, but it costs money,” said one conference goer at the Digiday Content Marketing Summit this week. “Where is that money supposed to come from? A sale makes it easier to justify, but you can’t always be selling. That’s a huge turnoff.”

Fintech firms love content marketing. Acorns, the popular micro investing app, has an online magazine called Grow that features news, financial how-tos and interviews with celebrities like Kevin Durant, Ian Kahn and Tony Robbins. Online lending company Bond Street has an online magazine that looks at the cultural and economic impact of independent businesses in New York as well as a podcast. Investing app Stash has a Learn page that aims to help “build a community of confident investors” that includes tips and primers on different money matters and concepts. Last year, Chase redesigned its online banking website to offer news stories as well as advice, guidance and support “the way we have a banker relationship at a bank,” the bank said at the time.

And at a time when people are consuming more content more frequently than ever — and all with one bias or another — so-called advice, education and information offered on their financial services platform can start to become just as noisy as the content coming through their various news streams on their various devices.

“The question is how frequent should it be? They have to figure out what the value is of the content they put out based on how people react to it and if they’re building more confidence and putting more money into their account,” Rudin said. “The fact is that they’re really trying to replace, to some extent, the advisor.”

It’s not just millennials that want advice, and every customer wants to consume advice differently. That’s why despite the popularity of robo advisors, there’s still a role for advisory relationships in financial services, hence the need to create online “communities.”

USAA is addressing this differently. With the creation of its Alexa skill for Amazon Echo devices earlier this month, it’s pushing insights — not advice — to help customers make more sound financial decisions.

“You’ll start to see spending advice as more of a mechanism to make a decision than to get some help,” Darrius Jones, assistant vp at USAA Labs, told Tearsheet at the time. “We think conversationally is the best way to deliver it.”

About 42 percent of ultra high net worth investors will change advisors if they don’t like the digital interface of the company, Rudin said, citing research by Capgemini. But the idea of a digital interface is broader than what people think, she said. It includes communication, not just advice.

In a way, depending on the consumer and his or her needs, content marketing reformats the traditional model of advice. By bringing in technology, as USAA has done with its Alexa skill, financial firms can figure out what customers really need.

“All these things need to be evaluated by banks,” Rudin said. “All that does is give it a remodel instead of a retool. Banks need to take a step back and retool themselves and think: how does this stuff really work?”