Ellevest Review November 2020
Posted on November 3, 2020
Ranked Top 3 for Complex Financial Planning Needs (Summer 2020 Robo Ranking)
Founded by Wall Street veteran Sallie Krawcheck, Ellevest caters to a historically underserved segment of investors—women. Ellevest is poised to scale quickly, as women are estimated to control north of $11 trillion worth of investable assets in the United States. Since its founding, Ellevest has managed to raise an impressive $78 million in venture capital funding, including support from familiar names including Melinda Gates and Google co-founder Eric Schmidt.
Ellevest has educational content and a tone tailored to women investors, and the platform has earned an honorable mention from Backend Benchmarking for its ability to handle complex financial planning needs. Members have access to coaches with CFP designations that cover detailed personalized financial planning, and there is a unique offering of career coaching as well that covers topics like negotiation.
In June of 2020, Ellevest started a new pricing model, moving from an assets-under-management fee to a dollar-per-month membership fee called Money Membership. Ellevest offers investing services at the lowest tier, $1/mo. Members also have access to banking services that include an Ellevest debit card and round-ups that flow into a savings account. The membership fee scales up to $5/mo and $9/mo, which offers discounts to their coaching service at 30% and 50% respectively.
- Easy-to-understand educational material
- Private Wealth offering
- Dedicated advisors are CFP-certified
- Career coaching
- Limited online planning tools
- No performance benchmarks
Return Summary: (as of 9/30/2020)
Additional Returns: (as of 9/30/2020)
*The Normalized Benchmark is a method of comparing each account against a comparable asset allocation. Details can be found here.
Digital Advice Ratings (Summer 2020 Robo Ranking)
Access to Advisors (3.25/5)
Although Ellevest’s basic package is digital-only, clients can access advisors by upgrading to the premium tier. Advisors are required to hold a CFP or relevant professional designation. Clients also benefit from having access to a dedicated advisor, as opposed to a call-center model used at other digital advice firms. Additionally, Ellevest makes available executive coaches who help advise clients on career-related issues like salary negotiations. The one shortcoming is that CFP professionals and executive coaches are only available at the premium level, which has a $50,000 minimum.
Financial Planning (4/5)
Ellevest scores above-average in regards to digital financial planning tools. While clients can model different goals and test “what-if” scenarios, plans incorporate neither Social Security assumptions nor additional retirement income, such as a pension benefit. Clients are also unable to use the tools to determine an amount to sustainable spend in retirement.
Transparency and Conflicts (2.5/5)
Ellevest ranks average in terms of transparency. It does not provide access to traditional or blended benchmarks to assess performance, nor does it publish its model’s performance. It does, however, provide white papers detailing the investment strategy. Also, Ellevest does not invest clients’ portfolios in proprietary funds. Finally, Portfolio models are made available before account opening, based on the planning goal and results of the risk tolerance questionnaire.
Features and Customer Experience (3/5)
Ellevest is average in regards to features and customer experience. There are no cash management features or portfolio-wide dividend reinvestment. Ellevest does have a mobile app and educational material available and specifically tailored for women who are interested in financial planning and investment topics. It does not provide the ability to include outside accounts for a holistic financial picture.
|Membership Fee||Fund Expenses||Total Cost|
*Per $10,000 invested.
The basic package is low cost for a $10,000 investment – it its all in-cost is equivalent to 0.19%. The Executive platform costs close to 1.15% for our 10,000 investment, which is actually quite pricey. This flat fee works much better for the client as either they invest more, and it lowers the fee proportionately, or as the client finds significant value in the coaching. Finally, the fund fees are competitive regardless of the membership tier.Posted in Profiles
Tagged AUM, Ellevest, Fees, Financial Planning, Minimum, Performance