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uld Consider Ellevest?
Ellevest is designed for new investors looking for guidance in starting their investment journey, saving for retirement, or achieving specific financial goals. The platform functions similarly to other robo-advisors but is tailored with a focus on women’s unique financial needs. Users answer questions about their goals and preferences, and Ellevest provides a customized portfolio based on risk tolerance.
One advantage is the lack of a minimum investment requirement, allowing quicker market access than some competitors like Wealthfront. However, Ellevest’s higher fees may become noticeable for those with smaller balances, and the platform doesn’t offer features like tax-loss harvesting.
How Ellevest Works
Setting up an Ellevest account is straightforward. Users provide details such as age, gender, and income, and then specify financial goals like saving for a home, retirement, or building a business. Based on the responses, Ellevest recommends an investment portfolio and savings targets.
Ellevest offers three membership tiers:
- Essential ($1/month): A taxable brokerage account.
- Plus ($5/month): Adds an IRA along with a taxable account.
- Executive ($9/month): Includes taxable and IRA accounts, plus multiple goal-based portfolios.
The fees for these tiers increase with balance size, so the plan that works best depends on how much is invested.
How Ellevest Manages Money
Ellevest constructs portfolios from a range of ETFs and mutual funds across 21 asset classes. Portfolios are tailored based on user profiles, and Ellevest considers factors like inflation protection and gender-specific challenges like the income gap and longer lifespans. For those interested in socially responsible investing (SRI), Ellevest offers portfolios focused on companies with strong ESG performance.
Other Features
Ellevest provides discounted financial coaching based on membership tier, along with options for personal coaching on careers and other aspects. The platform also includes a Spend and Save cash management account, which operates like a checking account with a debit card. While it has no minimum balance and offers ATM fee reimbursements, it doesn’t earn interest.
Ellevest Fees and Costs
- Essential ($1/month): Taxable portfolio, cash management account, 20% discount on coaching.
- Plus ($5/month): Includes IRA, retirement planning, and 30% coaching discount.
- Executive ($9/month): Multiple portfolios for goals-based investing, 50% coaching discount.
Ellevest’s fixed fees can be higher for smaller balances, but they become competitive as assets grow. For example, someone with $10,000 would pay 1.1% in fees annually under the Executive plan, but the fee becomes more competitive for balances over $40,000.
Advantages of Ellevest
Ellevest is ideal for those seeking personalized support and clear financial goals. The platform is user-friendly, offering low-cost index funds and impact investing options. Fixed monthly fees can be cost-effective for those with larger balances, and Ellevest’s integrated coaching makes it easy to access professional advice.
Disadvantages of Ellevest
Ellevest’s fixed fees may result in higher costs for smaller balances, and its coaching services, even at a discount, can be expensive. Additionally, the Spend and Save account offers no interest, unlike competing cash management products that provide some yield.
