Sallie Krawcheck, at one time widely considered the most powerful woman on Wall Street, was fired twice from high-profile banking jobs, partly, she believes, because she was a woman.
"It wasn’t as though the boss said, 'We don’t like female parts,'" she told The Huffington Post recently. It was, according to Krawcheck, because she took an approach to business that she has since come to believe is inherently female -- focusing on long-term goals and relationships. (There was also a lot of office politics at play, to be sure.)
The "women are different" theory is now driving the 51-year-old's second act. Krawcheck has founded Ellevest, an online investing platform targeting women. Women do not invest their money at the same rate as men. The reason for this is up for debate; while some believe women are risk-averse, others note that they simply earn less money than men.
Krawcheck has a different take: Women simply face different challenges -- like financing long career breaks for care-taking, paying for maternity leave, living longer than men, etc.
The new site is still in beta mode, with a launch planned for later this year. Krawcheck also chairs Ellevate, a women's networking company. HuffPost talked to her recently about women, Wall Street and why we’re more likely to want to have a beer with the guy running JPMorgan than with Hillary Clinton.
Why don’t women invest as much as men?
Wall Street is for men by men, I like to joke. I know lots of outstanding financial advisers who do a great job for women, but overall the industry does a great job for men. CNBC looks a lot like ESPN. The goal of investing is beating the market. It’s male. It feels competitive. When you speak to women about investing, they rarely talk about beating the market. Women talk about what they want to do in life and how investing can help them get there.
Doesn’t creating an investing company targeting women specifically just serve to keep the financial industry male dominated?
For years, I bristled at the idea that women would need their own thing. Well-intentioned journalists would say we need more hand-holding. We need simple. That’s not it. Women’s needs are different. What do I mean? We talk about the cost of a career break. That’s not something men grapple with. Women on average take breaks of up to 11 years and they are extraordinarily expensive. Another issue that impacts women more is not having mandated parental leave.
You talk about how the retirement crisis is a big women’s issue.
It is an insight I had a year ago when I was putting on my mascara one morning. We retire with two-thirds of the money that men have -- and we live longer.
If we cast retirement as a gender issue, the solution becomes about keeping women in the workforce, mandating parental leave, helping women invest more -- all of which can help grow the economy. The solutions go from depressing to pretty much all positive.
Aren’t I better off just putting my money into a low-fee index fund, rather than letting a so-called expert pick stocks for me and charge higher fees?
Over time, if investing is your only goal, yes you are better off putting your savings into a diversified low-fee index fund. That is the portfolio that we will use. I would say advisers can bring other capabilities to bear. For example, there is enormous value in a financial plan. It’s hard to go where you want to go, if you don’t know where you are going.
What was it like to be a young woman on Wall Street when you were starting out in the '80s? How do you think it’s changed?
It was outwardly hostile. I was left with a Xerox copy of male parts on my desk every morning. I don’t believe that happens now.
All those guys who were hazing you back then probably run things now.
Your theory may be correct, but when I go person by person I don’t know where they are.
Does it ever frustrate you that for all your success, people still keep asking you “how do you do it” and “tell us about being a woman”?
Not at all. Because when I was in my 20s. Even in my 30s, there were so few female role models. When I would look around, I couldn’t see a path forward. I remember working at Salomon in London and being literally the senior woman there. I am really always very happy to talk about how I did it and how I didn’t do it and the approach, because there still aren’t enough role models.
The percentage of women in C-suites and in boardrooms is still absurdly low. Why?
If there were an answer, well-meaning people would have closed the gap. Some part is not mandating parental leave and that women don’t make it through the funnel [to the top]. Some is inherent gender bias. Likability and success in men is positively correlated. Think Jamie Dimon, you want to have a beer with him. [Editor’s note: Nope.] It’s inversely correlated for women; think Hillary Clinton. Men and women both have biases like this.
My mother told me, "I’m not going to vote for Hillary. She’s too ambitious." I said, "Mom, hello?" She said, "You do it in a nicer way, honey."
This interview has been edited for clarity and length.
CORRECTION: A previous version of this story misstated Krawcheck's role with Ellevate. She runs the organization but is not a founder.