The XX Factor

Women live longer, earn less and are less likely to be overconfident about investing. But will they pay extra for their own, femalecentered robo-advisor?

- Samantha Sharf

Sign up with an asset allocation service or hire a new financial advisor and you’re likely to be presented with a questionnaire asking how much risk you’re willing to take. Not so at Ellevest, a new “robo” investing site designed explicitly for women.

“No one really knows their risk tolerance,’’ CEO and cofounder Sallie Krawcheck declares. Yet men, she says, will answer that they’re ready to take average or above-average risk, while “women will stop, say they are going to research it, then you never hear from them again. It really stops them cold.”

That observation—based on Ellevest’s own research and supported by academic findings that women are less willing to guess about consequential matters—wouldn’t seem by itself to warrant a separate investing platform just for women. But Krawcheck and her big-name backers are betting that such behavioral insights, combined with women’s longer lives, lower earnings and distaste for Wall Street, will create a demand for the service, which opened to the general public in November.

At Ellevest, for a fee of 0.5% of assets a year, a woman gets savings plans and individualized portfolios of low-cost ETFs matched to distinct goals such as retirement, a home purchase or having a child. While that’s half what a real human advisor would charge, it’s twice the typical fee at Betterment, the largest independent robo-advisor. A second robo designed for women, WorthFM, opened to the public in February. It also charges 0.5%.

Krawcheck, 52, is a key part of Ellevest’s branding. For more than a decade, she held a series of high-profile Wall Street jobs, running Sanford C.