Robo-advisory aims to become more targeted as Ellevest secures funding for …

Ellevest is looking to take a new twist on the explosion of excitement around robo-advisory. The just-announced platform, which received $10 million in Series A financing, will launch a robo-advisory site targeting women in early 2016.

The platform had help gaining attention of potential investors by the strong name recognition of its founder, Sallie Krawcheck, who formerly headed Bank of America Wealth Management and Citi Wealth Management before that. She will serve as the new platform’s CEO. ¬†

Charlie Kroll, who founded cloud-based customer acquisition technology company Andera, which was sold to Bottomline Technologies last year, is co-founder of the Ellevest platform and will serve as president and chief operating officer.

The $10 million funding round was let by investment research firm Morningstar, and included funding from former PIMCO CEO Mohamed El-Erian; president and CEO of MasterCard Ajay Banga, Brian Finn, former president of Credit Suisse First Boston; and Robert Druskin, executive chairman of the DTCC and former chief operating officer of Citigroup.

“It’s time to turn our attention to another gender gap: the investing gap,” Krawcheck said in a statement. “It’s time to give women an investing experience built specifically for them.”

Details of the platform and its features have not yet been released. Its announcement comes just months after the August announcement of the launch of SheCapital, founded by Tina Powell, who serves as director of business management for Hackensack, New Jersey-based registered investment advisor Beacon Wealth Management.

SheCapital focuses on the novice female investor, emphasizing financial literacy, and adopting approachable, easy-to-understand language, resources and automated tools. The site also donates 10 percent of its profits to She’s the First, a non-profit organization that sponsors girls’ education in developing countries.

Alexa von Tobel, founder of LearnVest has suggested that in starting her company she was also motivated to help women better understand their finances after watching her mother struggle to get up to speed with the family finances after her father’s death. LearnVest, however, does not target that segment of the market exclusively.

It remains to be seen whether the robo-advisory business can succeed in a more targeted niche model. The Web site RIABiz quoted an unidentified head of another robo startup as suggesting the targeted niche would be a challenge.  Still, Krawcheck has the advantage of strong Wall Street connections in bringing her concept to market. So far, her investors seem impressed with the concept and business model.

“Sallie and Charlie have put together an outstanding team with the drive to successfully execute this vision, addressing the unique financial needs of women,” Joe Mansueto, CEO of Morningstar Inc. told RIABiz in an email.

For more:
– read the RIABiz article
– read the ThinkAdvisor article
– read the Fortune article

Related Articles:
Betterment opens new frontier with online-only robo 401ks
BlackRock gets a robo-advisor with FutureAdvisor acquisition

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Tuesday, September 29th, 2015 EN

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