My Experience Using Ellevest – Robo Investing for Women, By Women and Supporting Women
I remember half-listening to a financial advisor visiting my first full-time job nearly a decade ago, stressing the importance of long-term investing and retirement planning. But as a 24-year old barely making enough to pay her bills, building a retirement fund, and investing portfolio was far from my mind.
“I’ll do that when I’m older,” I thought — a thought that many young people have. It’s a catch-22 really because investing more at an earlier age is the best way to grow your wealth. But it’s often when you’re older, earning more, and beginning to realize retirement isn’t so far away that you realize the importance of growing your money.
That’s when I stumbled upon Ellevest, a unique robo-advisor platform tailored to meet women’s specific investing and retirement needs.
- What is Ellevest?
- How much do you need to start?
- The bottom line
What is Ellevest?
Ellevest is an innovative, socially conscious robo-advisor designed by and for women. It’s no secret that women tend to live longer than men, and yet, women tend to retire with only two-thirds the amount of money as men. Women also make less than men, on average, and that’s especially true for women of color.
Ellevest realized that in order to obtain financial security after retirement, women needed to change the ways in which they were investing their money. That’s why in 2014, Ellevest officially launched its investing platform, which offers a variety of financial services geared towards women.
Not only does this investing software focus on meeting women investors’ needs, it also supports social change by encouraging users to invest in female-fronted companies. (Ellevest is not exclusive to women, however; men are also encouraged to open an account.)
My Experience Using Ellevest
Before I became an Ellevest member, I started to realize that I needed to get serious about my retirement planning. I had an old 401k from a former employer floating around (don’t worry, it’s in the process of being rolled over into an existing account) and a Roth IRA for my current employer, but I wanted other options.
Full disclosure, I’m still a fairly new Ellevest user. However, after a few months of paying attention to the data and reviewing Ellevet’s projections vs. expectations, I’m excited to keep building wealth for my future using an app that’s focused on social justice and women’s issues.
I signed up for the highest tier, Ellevest Executive, and currently have two retirement accounts set up and one investing portfolio. I do have an outside Roth IRA with my employer but wanted to open a Traditional IRA as well.
I have not set up banking through Ellevest and I’m not sure if I will. While their banking services are on par with many online banks, I have an Ally online account and am very happy with it. (It provides higher interest rates than most banks.) I might end up using these services in the future, but I’m not in a rush right now.
I’ll walk you through my experience setting up and using Ellevest so far.
Getting started with Ellevest investing
After getting burned out by actively investing, I was eager to work with a robo-advisor focused on long-term growth, so I could check in on my investments less often and adjust accordingly.
To get started with Ellevest’s investing accounts, you’ll create a Build Wealth Account. As you start to set this account up, you’ll need to decide what type of portfolio you want to invest in. Ellevest offers two types of portfolios to choose from:
- Ellevest Core Portfolio - offers a diversified selection of three asset classes: stocks, bonds, and mutual funds customized to your financial needs, with a 70% chance of success.
- Ellevest Impact Portfolio - offers a diversified selection of three asset classes: stocks, bonds, and mutual funds that support female-led companies, sustainable and ethically responsible companies, and businesses dedicated to community development, with a 70% chance of success.
It’s important to pick the right account from the start, otherwise, you might owe capital gains tax if you switch later on.
From there, you’ll set an investing goal (x amount in x years) and Ellevest will make a recommendation on how much you should deposit monthly to meet this goal. You can then adjust that number up or down, depending on your financial needs, and Ellevest will automatically adjust your projection.
You’ll also be able to link your bank account directly to your Ellevest account to transfer money right away and/or set up recurring transfers. There’s no minimum investment and no minimum account balance required.
If you have an Ellevest bank account, you can set up savings rules to automatically move money from these accounts every time you round up or on a specific day each month.
Here’s an example with a recent Core Portfolio account I opened in January 2021. (Told you I am new but I'm a financial writer and made it my New Year's Resolution to finally start investing.)
You can also decide if you want to invest more aggressively, at Ellevest’s recommended rate, or more conservatively. I chose the middle option because I want to safe yet with my age I don't have to be too conservative.
You can also take a closer look at your portfolio mix and asset allocation, so you can learn more about each stock, fund, and bond you’re investing in. Since I was looking to invest in a mix of Vanguard ETFs, the Core Portfolio was a perfect choice for me.
It’s also easy to adjust any of your goals with just a few clicks (or taps if you’re using the mobile app). You can change your monthly deposit, which will recalculate your goal amount, change your years until retirement, add one-time deposits, or adjust your goal amount to get monthly recommendations.
Ellevest will tell you whether or not you’re on track and offer investment advice to get you back on track if you’ve fallen under your goal.
Since this is a new account, I haven’t invested too aggressively, but will be looking to increase my monthly deposit from $200 to $750 in the future. Let’s look at how this will change my projected long-term investment.
By increasing my monthly deposit to $750 a month, Ellevest predicts I’ll earn over $1 million in investments by the time I reach retirement age. This is a huge jump from the $99k I was on track to earn by depositing $200 per month. Is $750 a stretch versus $200? Of course it is, but when I can see I'll have a million by retirement versus less than $100,000, this is important.
But, it’s also easy to decrease your contributions so if money gets too tight, I can cut back.
Getting started with Ellevest retirement
While I was very interested in investing with Ellevest, I was primarily focused on retirement goals. I do have an outside IRA through my employer, and I love that Ellevest allowed me to factor that amount into my goals, to give me a more accurate picture of how my monthly contributions would help me meet my retirement goals.
After answering a few questions (like how much money I hoped to have per year and when I expected to retire), Ellevest recommended I open an Ellevest Investment Account and Roth IRA. Again, Ellevest’s forecast calculator allows you to better see how your money will grow over time and whether or not you’re on track to meet your retirement goals.
Ellevest also shows you a convenient snapshot of how much money you’ll be likely to have per year once you reach retirement age.
You can set a target and adjust as needed, pausing, reducing, or increasing your payments at any time.
How much do you need to start?
Like many of the new robo advisors targeting new investors, you don't need a lot to invest. You can start with just $1, if you'd like.
A perk for robo advisors is not charging you fees to invest – we already have limited funds to begin with, right? Ellevest doesn't charge fees; it's included with membership, which is $1 per month, $5 per month, or $9 per month, depending on the tier you elect to invest in.
This female-focused investing platform has a few different products you can enroll in, along with different member tiers.
Ellevest’s primary service is long-term investing. When you sign up, you’ll be prompted to answer a few questions, including your age, zip code, gender, and degree level. From there, Ellevest will recommend an investment portfolio composed of stock ETFs, bonds, and alternative funds. The way Ellevest diversifies your specific portfolio is designed to help you minimize your risk.
Whether you already have a retirement plan or know you need to start saving, Ellevest can recommend the right retirement portfolio for your age and financial goals. Ellevest will also take into account any money you already have in outside accounts before recommending a traditional, Roth, or SEP IRA.
Another feature that Ellevest offers is checking and savings accounts. The Ellevest debit card is linked to your Ellevest Spend account and earns you 5% back when you shop qualifying brands and stores and allows you to round up your spare change so it automatically transfers into your Ellevest Save account. Ellevest’s banking accounts have no minimum balance fees, no transfer fees, no overdraft fees, and ATM fee reimbursement guarantees.
Lastly, Ellevest provides one-on-one coaching with qualified female financial advisors to answer your questions or help you build a roadmap to financial freedom. You won’t just get advice and generic answers during these sessions — you’ll actually leave with an actionable financial planning guide designed to help you meet your goals.
|Membership Includes||Ellevest Essential||Ellevest Plus||Ellevest Executive|
|Cost||$1/mo or $12 per year||$5/mo or $36 per year||$9/mo or $72 per year|
|Investing||Full access||Full access||Full access|
|Coaching||20% off financial planner or coaching sessions||50% off financial planner or coaching sessions||50% off financial planner or coaching sessions|
|Education||Full access to online videos, articles, workshops, and courses||Full access to online videos, articles, workshops, and courses||Full access to online videos, articles, workshops, and courses|
|Banking||FDIC-insured checking and savings accounts (with debit card access)||FDIC-insured checking and savings accounts (with debit card access)||FDIC-insured checking and savings accounts (with debit card access)|
|Retirement||N/A||Personalized retirement recommendations and projections; IRA account options; ability to rollover existing retirement accounts via the concierge team||Personalized retirement recommendations and projections; IRA account options; ability to rollover existing retirement accounts via the concierge team|
|Multi-goal investing||N/A||N/A||Access to 6 personalized investment accounts; forecast projections for each savings goal|
Ellevest Pros and Cons
Low-cost, transparent monthly fees
I love that the platform did away with its fee-structure and now Ellevest charges a monthly membership price. It’s much easier to factor this cost into your budget and the lowest tier is only $1 per month for investing services, which is a price tag most of us can get behind. There are also no balance requirements, no monthly investment plan minimums, and no management fees.
Sleek digital interface
I’m a big fan of Ellevest’s digital app and online platform displays. Both tools offer similar services, but the app looks a little bit cleaner and gives you a better overview of how your accounts are doing. You do have a little bit more control over your account from a desktop, though. (For instance, I needed to add an outside IRA to my retirement account and could not do that from the mobile app.) Ellevest’s forecasting charts are easy to read and offer quick insight into your account’s health, so you don’t have to dig into individual stock performances.
When you open an investment or retirement account through Ellevest, you can personally set long-term or short-term goals. Ellevest allows you to determine how much money you need to have by a particular age and offers suggestions for how much to deposit per month. If that amount is higher than you can afford, you can easily adjust it and update your goal to either stretch out for another year or two or minimize your total savings goal. It’s easy to spin these goals up or down at any time, and viewing your projections can really motivate you to increase the amount you’re investing.
Robust educational resources and coaching options
Members have full access to learning resources through Ellevest, including workshops, video sessions, articles, and additional investment strategy guides, tools, and tips. Ellevest really encourages their users to learn as much as they can about their own finances so they can make smarter savings and investing decisions. One-on-one coaching is also a helpful service that Ellevest provides, though you will pay extra for these sessions.
My favorite part about Ellevest is that I can set up a portfolio and let it work it’s magic long-term, while I focus on other savings goals. Ellevest offers rebalancing services automatically, adjusting your portfolio over time to stand up against market changes and trends.
Limited portfolio options
Ellevest offers only two portfolio options, Impact and Core, with the option of increasing or decreasing your investing risk (and potential reward). However, if you want to invest in a stock you’re hearing a lot of buzz about, like Tesla or Zoom, Ellevest isn’t the right platform. Your money will be placed in ETFs, bonds, and funds, where you’ll own partial shares in stocks, in order to minimize your risk. However, you cannot pick and choose specific companies to invest in or avoid.
Low savings rates
One of the reasons why I haven’t yet opened an Ellevest banking account is because they don’t offer interest rates on their savings accounts. While their checking account has some innovative features, their savings account isn’t very notable. It’s not technically free (since you’re paying at least $1 per month) and it’s easy to find high-yield savings accounts with interest rates from 0.50% to 1%. I use Ally Bank instead.
Access to certified financial planners cost extra
It’s great that Ellevest allows you to connect with real-life financial advisors, but none of the three tiers of membership allow you to do so for free. You’ll need to purchase this session ala carte, though you will save a percentage on the cost depending on your membership level. It would be nice to offer at least one free service as a signup bonus.
How Ellevest Stacks Up Against Competitors
There were two other similar services I reviewed before ultimately settling on Ellevest — Betterment and Wealthfront. Both of these robo-advisors are top competitors in the space and are more well-known than Ellevest.
Betterment charges a 0.25% fee for its digital investing plan and 0.40% fee for premium investing. Unlike Ellevest, they offer tax-saving strategies such as tax-loss harvesting, though Ellevest does work to minimize taxable events that would trigger capital gains taxes and other situations. Betterment also offers a savings account that earns 0.40% APY, which is much better than Ellevest’s savings account.
On the downside, Betterment’s premium investing account requires a $100,000 minimum balance, though it does gain you unlimited access to financial professionals.
Wealthfront charges a 0.25% flat fee for investing services and requires a $500 minimum account balance to get started. They offer a large variety of savings tools and credit features (including college savings planners, tax efficiency resources, even lines of credit). They also offer a high-yield savings account that currently earns 0.35% APY.
On the downside, Wealthfront doesn’t purchase fractional shares of stocks or funds, which means it’s rarely possible for the robo-advisor to invest your entire account balance. There’s also a minimum balance requirement which may be too steep for new investors.
Ultimately, I preferred Ellevest’s goal-setting tools, educational resources, ease of use, and social standing more than the other two platforms. However, both Betterment and Wealthfront would be great options for anyone looking to invest long-term or save for retirement.
The bottom line
Ellevest is quickly earning a name as a premier social impact investing platform, geared specifically towards women and their financial goals. Ellevest is designed to take women’s pay differences, long gaps in employment, and longer lifespan into account when customizing a retirement and investment portfolio. It’s a great platform to start investing with and ideal for beginners and those looking to fund additional retirement savings.
Can you earn more money by actively investing in the stock market on your own? Sure — if you know what you’re doing and have the time — but if not, I highly recommend giving Ellevest a try.