Sallie Krawcheck, co-founder and CEO of Ellevest, a female-focused automated investment platform or so-called robo advisor, called out fellow robo Betterment for a company Instagram post comparing an investor's "right team" to a row of foosball players, who look to be all white males. Ellevest quickly responded with its own Instagram posting questioning whether Betterment's post mirrored the firm's actual diversity. By contrast, Ellevest's row of foosball players is culturally and gender diverse.
Betterment has since taken down the post and replaced it with an image of two hearts, saying, "We messed up today. We posted an image that doesn't reflect our diverse community or our employees. You shouldn't have had to call us on that, but thank you for holding us accountable. To our customers, our company, and our community, we are truly sorry."
In a post on Ellevest's newsletter, Krawcheck said that the concerns extended beyond Instagram, posting a screenshot of Betterment's website indicating there were no women on the firm's investment committee. She wrote that those who questioned the value of these critiques misunderstood how essential industry diversity was, pointing to a lack of cognitive diversity as a core driver of the financial crisis. Without diverse perspectives, the status quo can too easily prevail, she asserted.
“I saw the far-reaching impact that the financial crisis had on people," she wrote. "So many people lost their jobs and their homes. I lost my own job because I worked to return some client funds from products that had been incorrectly sold,” she wrote. “If you go through something like that close up, it can lead you to deeply respect how important cognitive diversity is. Cognitive diversity is driven by diversity of background, perspective, life experiences, gender, skin color. You get the picture. It’s important. Not an afterthought; but important.”
Ellevest premiered in May 2016, with Krawcheck saying she wanted to build an automated investment platform that would be designed to take into account the particular needs of female clients (for example, the platform utilizes an algorithm that takes into account the need to save a larger retirement target amount for potentially longer lifespans). The platform currently has about $283 million in AUM and recently raised $33 million in its latest round of funding.
