Ellevest Brand Audit

Executive Summary

Ellevest is a niche leader in the financial portfolio services industry. Other brand category leaders like Wealthfront and Betterment focus on portfolio and security management. Companies such as Ellevest, Wealthfront, and Betterment replace conventional financial advisors. Brokers like these buy or sell stocks, bonds, mutual funds, ETFs, options, and other assets. Ellevest is considered a challenger brand and primarily focused on female consumers. The Ellevest vision includes acknowledging pay and career gaps, amongst many factors. Ellevest differs from competitors in robot advising in a few ways, mainly due to a massive push in financial literacy efforts geared toward women. This analysis goes in-depth about the industry, competitors, and positioning of the Ellevest brand. Finally, with primary and secondary research, this analysis takes a deep look into the target customers through research that settles three recommendations for the brand.

Background

Brand audits provide the knowledge necessary so companies such as Ellevest can make informed decisions and discover key market issues. The benefits of establishing this information offer Ellevest insight into the industry by identifying the competition and establishing industry leaders. This section also reveals the strengths and weaknesses of one or more brands based on factors such as differences in product quality, pricing, and buyer perceptions. This audit also includes inventory or exploratory sections highlighting the essential brands by providing a point of parity and point of difference analysis. The final point of a brand audit is to specify three to five priority-based recommendations on the research provided.

Key Market Issues

This month’s article stated that Fidelity and E-Trade are the top online brokers to look out for in 2023 (Voigt, 2023). At the end of 2022, E-Trade announced more modifications to the trading interface to offer more sophisticated tools catered to consumer feedback. Robot advisement is on the cusp of convenient offers within the financial management category. In the case of a worsening economy, some consumers may find ways to invest independently without paying for services, especially with the growth of online courses and YouTube advisement; people may choose this route. As consumers worry about inflation and interest rates, they may be less inclined to pay for more costly investment services.

Industry Overview

Ellevest began in 2014 with a small team of industry experts and is now an established SEC-regulated community with over three million employees, supporters, investors, and users. From its inception, Ellevest ensures that even from its foundation, the underrepresented are now overrepresented. Sallie Krawcheck is the original Ellevest founder, and at the beginning of her career, worked at large banks known as Citi Bank and Merrill Lynch. Ellevest has 84% of women on leadership teams, compared to the finance industry, where women represent only 23% of teams. 50% of the teams at Ellevest are people of color compared to the finance industry, where people of color only make up 11% (Ellevest, 2023). Ellevest has about 120,000 users and represents a significant market share compared to competitors. The difference with Ellevest compared to others is the engaging user experience. The usability of the application and the interface are accessible to the average user with access to portfolios. It offers a variety of investments that are all channeled from a specialized algorithm that forecasts efficient recommendations for each user.

Competitive Landscape Overview

The online stock brokerage industry is extensive and focuses on maintaining portfolios of cash and securities on an online trading platform. These services are meant to replace conventional financial advisors for buying and selling stocks and bonds, mutual funds, ETFs, options, and other assets. Betterment and Wealthfront are the two competitors in this industry.

A look at competitor membership shows that Betterment surpassed 910,000 users in 2022 (Nasr, 2023). Wealthfront has just under 500,000 users (Nasr, 2023), and Ellevest has 120,000. Wealthfront and Betterment have almost identical data concerning active membership (61% — 63%). The activity at Ellevest is almost exactly reversed, with 65% of women and 34% of men utilizing Ellevest investment services (Similar Web, 2023). Remember, Wealthfront and Betterment were founded eight years before Ellevest’s inception. It seems Ellevest has accomplished the goal of a predominately female-based ecosystem but still gains enough of the male demographic to balance out the discrepancies in the competitor’s data. Ellevest enrollments will compete with brand leaders as time passes, especially as more women become interested in investment services.

Introduction and Corporate Overview

The Ellevest brand has a lot of appealing aspects, especially for those interested in brand initiatives. Some issues related to the messaging include hesitancy in investing with a young financial company. Other companies like Wealthfront and Betterment have more history and visibility in the financial world. Second, some consumers may not prefer to avoid investing in a brand with specific political designations. Lastly, the brand is so focused on women that it may not be the most significant focus for men to use this platform. However, with secondary brand associations in mind, there may be ways to effectively communicate and brand Ellevest in a manner that also appeals to men. The Women in Tech Global Conference is one of the largest business groups in the United States. Ellevest’s mission would align closely with the women at these conferences because these women are working and, most often, interested in acquiring capital and aspire to learn and grow. This global conference is famous for being held three days a year in May and has a high attendance rate as people can attend virtually from anywhere.

Challenger Brand Marketing

The fact driving the Ellevest initiative is that women typically hit salary peaks earlier in life than men and have lower salaries due to the gender pay gap (McGrath, 2021). Ellevest started as a long-term wealth management tool but now offers workshops and financial planning. Ellevest predominate business is a subscription-based model with two membership tiers (Aspan, 2020). Ellevest offers the Ellevest Plus and Ellevest Executive membership tiers. In 2021, both membership offerings won two awards for the best robot advisor for IRA investing on behalf of Nerd Wallet and Apple.

Product Lines

Ellevest Plus

The Ellevest Plus membership offers 1:1 coaching at a 30% discounted rate. This membership tier offers the IRA and retirement planning account and a no minimum investing account to get started. The last benefit includes countless free live workshops on budgeting, investing, and more (Ellevest, 2023).

Ellevest Executive

The Ellevest Executive membership offers 1:1 coaching at a 50% discounted rate. This membership tier includes an IRA retirement account, five more accounts toward a down payment, kid-related expenses, and more. The last benefit includes countless free live workshops on budgeting, investing, and more (Ellevest, 2023).

Non-Members 1:1 Session

Ellevest offers different sessions, including knowledge regarding retirement, budgeting, homebuying, debt, and complete financial planning. Ellevest’s best-selling sessions are 30 minutes with a CFP Pro, Budgeting and Debt Planning, and Budgeting Sessions. The 30-minute session is the most affordable class for nonmembers and covers general information about emergency savings, 401(k) vs. IRA, and any other questions people may have.

Place

Ellevest operates in the United States, Alaska, and Hawaii. Ellevest is an online business with no physical locations where consumers can access Ellevest services from any contiguous place in the United States.

Price

Ellevest offers public sessions related to different financial goals, which range from $229 to $1,999 per session. The Ellevest Plus memberships range from $5 a month to $60 annually. The Ellevest Executive membership ranges from $9 a month to $108 per year.

Secondary Brand Associations

Ellevest could be more vocal about its founders and investors. The brand is affiliated with Google, Microsoft, and various philanthropic organizations and companies that consumers may be excited to hear about.

Country of Origin

Establishing the company in a new country would allow Ellevest to market or brand more products. This would allow Ellevest to compete more with Vitamin, a financial brand with a very similar mission, but it is only based in the UK.

Channel of Distribution

Ellevest could work directly with other distribution channels, such as HeForShe or the Engaging Men group that the UN Women Organization founded. Both groups intend for men to empower women.

Brand Affiliations

Ellevest could partner with brands like Vitamins in the UK and attract a new segment of consumers from different regions.

Characters, Spokesperson or Endorsements

Ellevest may be able to partner with celebrities or visible female figures in the media to promote and stand by some of the product offerings. These types of collaborations and licenses often create influential campaigns.

Key Brand Elements

Slogan

“Invest with the experts in women’s wealth.”

“Invest like a woman.”

Brand Positioning Statement

Ellevest is a robot advisor to women with financial ambitions who encourages them to control their economic destinies while considering gender concerns and offering wealth management tools for impact investing. Ellevest offers two different membership tiers and various non-membership sessions. Ellevest hopes to award women with the tools to create healthy budgets and relationships with money through financial literacy.

Exploratory

Ellevest is an online investing application catered to women to help them build wealth. Ellevest was founded in 2014 in part with Melinda Gate’s Pivotal Ventures. This brand offers discounted access to professional help and resources, financial literacy, and freedom. The algorithm stands out against competitors because of Ellevest factors in pay gaps, career gaps, and other factors. The mission is to get more money in the hands of female investors. Ellevest aims to help primary customers who hope to help career-oriented people make better financial decisions. Ellevest is mostly geared toward women aged 35–44 who are willing to pay a membership fee to ascertain impactful investing.

Buyer Profiles

Research Reports

Primary Research

1. Based on primary (Vitamin) and secondary (Wealthfront, Betterment) competitors, do you believe Ellevest needs to distribute other tools to customers?

A. Tax Related Products

B. ETF or fund types

C. I don’t know

As shown above, 50% of participants are unaware of the differentiation between Ellevest and its competitors. In comparison, the remaining 50% of surveyors are concerned about Ellevest’s lack of tax loss harvesting and potential differences in funds or ETF types.

2. How would you prefer to pay for banking services?

A. Based on a one-time fee annually

B. Based on a percentage commission structure dependent on contributions

3. Do you feel as comfortable using a startup finance service as an established provider?

A. Yes

B. No

In the survey, 50% of the surveyors feel less secure using an established financial provider, and the other half would be willing to take that risk.

4. What standard do you value the most?

A. Reputation

B. Representation

C. Customer Service

D. Accreditations

5. Do you currently use any investment services, and if not, what companies are you considering?

A. Fidelity

B. Merrill Lynch

C. Fountain Financial

D. Unknown

In the survey, 100% of participants partake in some sort of investing, whether it is a local or major investment bank service. Each institution that participants do business with is a varying company, such as Fidelity, Fountain Financial Services, or Merrill Lynch. The fourth participant has a 403 (b) plan from an unknown organization but is still enrolled in a retirement plan.

Secondary Research

Membership Costs

An article published by CNBC states a few cons regarding Ellevest. Unlike many other institutions, Ellevest does not offer a savings and checking account with APY. Competitors such as Wealthfront and Betterment do not charge monthly membership fees. The main issue with Ellevest membership fees and expense rations is that if the consumer isn’t investing enough, the extra fees may not be worthwhile. “For example, if an Ellevest Plus member with $10,000 invested in a Core Portfolio, you will spend up to $64 a year, $54 on the membership fee, and up to $10 on the expense ratio. If they opted for robot advisor Betterment, they would be charged a 0.25% annual fee in addition to the expense ratio, typically between 0.07% and 0.15%. If you had $10,000 in a retirement account with Betterment, they would be charged about $25 for the annual fee and up to $15 for the expense ratio, or about $40 total” (Paul, 2022). Looking at this article and for lower volume investors, this example will likely deter consumers from using Ellevest.

Recommendations

1. Reconsider the membership fee structure. For young investors, membership fees are a deal breaker and can be more significant. This fee structure is not the best strategy for the brand if its mission is to attract early investors and improve financial literacy among consumers.
2. Configure a way to make exclusive services available geographically. Ellevest could market or brand more products by establishing the company in a new country. Ellevest could compete more with Vitamin, a financial brand with a very similar mission, which is only based in the UK. Financial companies with a mission like Ellevest are few and far between, and there is a need for financial investment services for women in many other countries as well.
3. Consider services or plans that make Ellevest stand out more than competitors. Ellevest doesn’t offer tax loss harvesting, nor does it permit the use or maintenance of cryptocurrency, as the brand does not believe in speculation-based risks. It’s evident that Ellevest does not offer these services. Other than marketing geared toward women, the brand should look at what other significant services can be provided to exclusive members — especially for those paying high fees.

References

Aspan, M. (2020, June 24). Sallie Krawcheck’s women-focused investment startup expands to debit cards and a membership model. Fortune. https://fortune.com/2020/06/24/sallie-krawcheck-ellevest-debit-card-membership/

Cannon, C., Halford, D., Harris, B., & Burgess, J. (2023, April 10). The Bloomberg Billionaires Index is a daily ranking of the world’s richest people. New York. Bloomberg.com. https://www.bloomberg.com/billionaires/profiles/eric-e-schmidt/

Langley, M., & Vascellaro, J. E. (2008, October 20). Google CEO Backs Obama. WSJ. https://www.wsj.com/articles/SB122446734650049199

Voigt, K. (2023, April 3). 11 Best Online Stock Brokers for Beginners of April 2023 — NerdWallet. NerdWallet. https://www.nerdwallet.com/best/investing/online-brokers-for-beginners

MarketWatch. Online Trading Platform Market Size, Share and Forecast 2031. (2023, March 30). https://www.marketwatch.com/press-release/online-trading-platform-market-size-share-and-forecast-2031–2023–03–29

McGrath, M. (2021, March 23). Sallie Krawcheck Leads Ellevest To A Landmark $1 Billion In Assets Under Management. Forbes. https://www.forbes.com/sites/maggiemcgrath/2021/03/23/sallie-krawcheck-grows-ellevest-to-1-billion-in-assets-under-management/?sh=7009e01b2395

Nasr, T. (2023). Wealthfront Statistics (2023): AUM, Users, Revenue, & More. Investing in the Web. https://investingintheweb.com/brokers/wealthfront-statistics/

Palios, S. (2020, May 28). Nine Steps to Build Your Personal Brand. https://www.business2community.com/branding/9-steps-to-build-your-personal-brand-02315235

Paul, T. (2022, January 26). Ellevest Review: A robo-advisor that accounts for women’s unique financial issues. CNBC. https://www.cnbc.com/select/ellevest-review-robo-advisor-for-women/

Similar Web. Challenge Validation. (2023) https://www.similarweb.com/website/ellevest.com/#demographics