Ellevest's founder Sallie Krawcheck climbed the glass cliffs at Wall Street only to see a growing issue once she reached the top. The wealth inequality between men and women was staggering, and women's wealth was even going backwards compared to men's. Knowing that the investing industry tends to mostly serve men, Krawcheck took it into her own hands to build a $2 billion empire dedicated to helping women build their own wealth.
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00:00I think my gender was always a factor.
00:02I think it was a factor in my success,
00:05and I think it was a factor in times when I stumbled.
00:08It seems weird to sort of paint gender over everything,
00:11but it's such a core to who I am.
00:14It's sort of hard to say,
00:16no, gender had nothing to do with anything,
00:18because it's so core.
00:20I found as a research analyst,
00:22because I was the only woman,
00:24or one of the only two women,
00:26whether I wanted to or not, I stuck out.
00:29And I used that to my advantage.
00:32There's a reason that I was successful
00:34very quickly as a research analyst.
00:36One, I worked hard.
00:37Two, I was very analytical.
00:39Three, I took risks.
00:41But part of it was, you couldn't forget me.
00:44You just couldn't forget me.
00:46I'm Sally Krawcheck, I'm 59 years old,
00:48CEO and co-founder of Ellevest,
00:50and this is my secret to success.
00:52You may find this hard to believe,
00:54but I'm a Charles Stoney, and I'm from the South.
00:56I have three siblings.
00:58My dad was a lawyer.
00:59He was a sole practitioner lawyer,
01:01even in his young 20s.
01:02My mother worked within the home.
01:04So those early days when I was younger,
01:06things were, you know, pretty tight.
01:08I remember sitting in the breakfast room
01:11and peeling the wallpaper off the wall,
01:14and actually not getting in trouble for it,
01:16because that's sort of how run-down
01:18the place was at the time.
01:19Charleston, you think of it as hot,
01:21but it has a chilly winter.
01:23My parents, to save money,
01:25used to turn off the heat at night.
01:27They'd wake up at 5 or 5.30 in the morning
01:29to take that shower.
01:30It was freezing cold.
01:32I remember putting on my pants,
01:34and they were freezing cold
01:35when I put my legs in them
01:36and getting back in bed to warm up.
01:38First of all, I always wanted money,
01:40and I had my little savings account,
01:42and how could I earn money?
01:43I worked for my father filing for him,
01:47and I got 25 cents an hour to work for him.
01:50So that's where I started.
01:52I babysat, of course, for all the neighborhood kids,
01:55and then we had a family store,
01:56which was on King Street.
01:57It was called Jack Krawcheck,
01:58and I think from ninth grade,
02:00I was on retail.
02:02So I can't think of a time
02:04that I wasn't working.
02:06So I went to the University of North Carolina,
02:07and I was a journalism major,
02:09a poli-sci major there.
02:10I worked at Fortune one summer
02:13as, I guess, a cub reporter.
02:15I remember seeing the first fax machine
02:17that I'd ever seen when I was here.
02:20Didn't get the full-time job,
02:22so I went to Wall Street instead.
02:25I think it worked out well for Fortune
02:26and worked out well for me.
02:28When I graduated,
02:29Wall Street was going absolute gangbusters,
02:31so even though I was a journalism major,
02:33I thought, let me go to Wall Street,
02:35if I can, for a couple years,
02:36learn a lot, learn about business,
02:38and then I can come back
02:39and be a business journalist
02:41or do something with that business.
02:43I think I got job offers with
02:45Salomon Brothers,
02:47Bankers Trust at the time,
02:48Goldman Sachs,
02:50Morgan Stanley,
02:51J.P. Morgan.
02:52So, I mean, I got some job offers.
02:54I remember calling my dad and saying,
02:56I've got these job offers,
02:57what do you think?
02:58He said, that's great,
02:59but let's, you know,
03:00forget about Goldman Sachs.
03:01And I said, why?
03:02And he said,
03:03because I've never heard of them.
03:04So I said, excellent, excellent.
03:06Thank you for that excellent advice, Dad.
03:08But chose Salomon Brothers
03:09because John Goodfriend
03:10had just been on the cover of
03:11Businessweek as the king of Wall Street,
03:13never knowing what I was getting into,
03:16never having any idea
03:18of what a rough environment it was.
03:21I was in investment banking
03:22for a few years.
03:23I came back to go to
03:25Columbia Business School
03:26with a sole goal of
03:28let me get out of investment banking.
03:30Worked at Time Magazine
03:31in the business office for the summer
03:33so I could get back into media.
03:35And I'm like, here I go,
03:36here goes the dream,
03:37my journalism major,
03:38my business degree.
03:39I'm going to work at Time Magazine
03:41and I did not get the ongoing job offer.
03:44So I ended up right back
03:45in investment banking on Wall Street.
03:48I didn't last long.
03:49Never anybody ever do this,
03:51but I quit my job.
03:52I was like, I've had it
03:53with investment banking.
03:54This is not where I want to be.
03:56At some point,
03:57right before I turned 30,
03:59had the epiphany
04:01that I wanted to be an equity
04:02research analyst,
04:03a sell-side research analyst.
04:05So the first time
04:06I was on the glass cliff
04:08was after the research scandal
04:10of the early 2000s.
04:13In the run-up of the internet bubble,
04:15research analysts really had two jobs.
04:17One job was to write research
04:20telling individual
04:21and institutional investors
04:22to buy low and sell high.
04:24And the other was to be
04:25part-time investment bankers
04:26and to advise the corporates
04:28to issue the stock high
04:30and buy it low,
04:31which was a direct conflict
04:32to each other.
04:33At Sanford Bernstein,
04:34we too were in those two businesses,
04:36but when I had the opportunity
04:37to run the business,
04:38I took us out of the
04:39conflicted investment
04:40banking business.
04:41The business struggled
04:42for a while,
04:43but when the internet
04:44bubble burst and it was clear,
04:46Elliot Spitzer came in
04:47and found old emails
04:48and it was clear that
04:49there was these conflicts.
04:50Our business did this.
04:51And I was on the cover
04:52of Fortune magazine
04:53as the last honest analyst,
04:55which then brought me job offers.
04:57I got a call from Sandy Weil,
04:59who was then the titan
05:00of Wall Street,
05:01running Citi,
05:02which was the largest
05:03financial services company
05:05at the time, I think,
05:06in the world.
05:07And the stock was under pressure
05:08because of the research scandal.
05:10And so I got a call,
05:11would you come and turn around
05:13our research business?
05:15And to which I was,
05:16I don't know about that,
05:17but would you run Smith Barney?
05:19And for those who don't know,
05:20Smith Barney was a Merrill Lynch
05:22of its time.
05:23And so I got the opportunity,
05:25the first woman to ever
05:26have run that company.
05:28It was a glass cliff
05:29because it was a turnaround.
05:32It was a turnaround
05:33that I got in part
05:34because I was a woman,
05:36in part because, of course,
05:37I had a different strategy
05:38than others,
05:39but a very visible,
05:41you're out there,
05:42the Wall Street Journal
05:43is watching,
05:44Fortune magazine is watching,
05:46your parents are watching,
05:47the world of Wall Street
05:48is watching,
05:49can you get this business
05:51turned around?
05:52And I knew very well
05:53that the only reason
05:54I got the opportunity
05:55was because it was
05:56a turnaround.
05:57That if I had not had
05:59this other set
06:00of career successes,
06:01no way I would have ever made it
06:03to the top of Smith Barney.
06:04And so it was only through
06:06having that glass cliff moment
06:07that I got an opportunity
06:08to go run a business
06:09of that size and scale.
06:12I was putting on my mascara
06:13one morning,
06:14and I came up with the idea
06:15for Ellevestor.
06:16I came up with the idea
06:17that led to the idea
06:18that led to Ellevest.
06:20And the idea that sort of
06:21dawned on me,
06:22you know, boom,
06:23retirement savings shortfall
06:25in this country,
06:26which we really don't
06:27talk about nearly enough.
06:29But if there's not enough money
06:30for retirement,
06:31it's actually a gender issue.
06:33It's actually a woman's crisis.
06:34Why?
06:35Because women live
06:36six to eight years longer
06:37than men,
06:38and half the marriages
06:39end in divorce.
06:40The stats are so compelling
06:42about how much less wealth
06:43women have,
06:44and about how women's wealth
06:45has been going backwards
06:46in comparison to men.
06:47There simply has to be something
06:49that we can build and do
06:51in order to solve this big issue.
06:54What I know is investing.
06:56What I know is that
06:57the really scalable way
06:59for individuals to build wealth
07:01has been through investing.
07:03The industry, you know,
07:04tends to look sort of past women,
07:07tend to mostly serve men.
07:09Maybe there's an opportunity
07:10to build something
07:11that can help women invest
07:12and make them comfortable investing.
07:14We launched at the end of 2016,
07:16right before the election.
07:17We've raised $144 million
07:19of venture funding.
07:21We're fortunate because
07:22we've got a number
07:23of prominent women investors,
07:25including Melinda French-Gates,
07:27Melody Hobson,
07:28Penny Pritzker,
07:29the folks that we think
07:30impact a number
07:31of the all-raised
07:32venture capitalists
07:33who've invested in Ellevest.
07:35The process was individualized.
07:37Penny Pritzker,
07:38I remember going to sleep
07:39one night,
07:40and right before I was
07:41going to sleep,
07:42thinking to myself,
07:43if I could have one investor
07:45and forget about whether
07:46they're a venture investor
07:47or whether they do this often,
07:49who would that investor be?
07:51And I woke up at about
07:52three o'clock in the morning
07:53like Penny Pritzker.
07:54And I was in her office
07:55two days later.
07:56I talked to Melody Hobson
07:57about investing in Ellevest
07:58at the Fortune Most Powerful
07:59Women's Conference one year.
08:01We were both there,
08:02and I said,
08:03can you come over here?
08:04I'd like to sit down
08:05and walk this through with you.
08:07So for each of them,
08:08I think for Melinda Gates,
08:09going up to Seattle
08:10a couple of times
08:11and visiting with her team there,
08:12and visiting with her team there.
08:13So each one was individualized,
08:15but I was fortunate
08:16to be able to know
08:18these incredible women
08:20and be able to get in front
08:21of these incredible women
08:22in order to make the case
08:23for something important.
08:24So Ellevest really engages
08:26with women who have agency
08:28over their money.
08:29And I know whenever people
08:30ask me that question,
08:31they want me to say,
08:32her average age is 32,
08:34which is about what it is,
08:35and her income is about this,
08:36and her buh-buh-buh
08:37is about that.
08:38The truth is,
08:39we serve women
08:40who are in college
08:42and who have just got
08:43their credit card debt paid off
08:45and are ready to invest,
08:47through to women who've got
08:48multiple tens of millions
08:49of dollars with us.
08:50It's really trying to solve
08:51the same problem
08:52across the entity.
08:53It's a digital advisor,
08:55also known as a robo-advisor.
08:56We also have financial planners.
08:58Ellevest just hit
08:59$2 billion of assets
09:00under management,
09:01and our success
09:02is really driven by
09:03we've got a fantastic team
09:05who is willing to build
09:07differentiated products
09:09and really focus on
09:10our clients,
09:11who are women
09:12who have been underserved
09:13by the industry.