Good morning, Broadsheet readers! A wave of LGBTQ discrimination litigation may be on the horizon, a race car driver earns a posthumous record, and Sallie Krawcheck’s Ellevest pivots. Have a thoughtful Thursday.
– Bridging the wealth gap? Today’s guest essay comes from Fortune senior writer Maria Aspan:
By now we have depressingly thorough evidence that the pandemic has eroded women’s already-shaky financial footing. Women are losing their jobs at a steeper rate, and facing more pressure to give up employment for childcare responsibilities. The economic situation is even worse for black and Latina women, who are also disproportionately affected by the health toll of COVID-19.
“Women have gone backwards during the pandemic,” as Sallie Krawcheck, the CEO and cofounder of women-focused financial startup Ellevest, told me this week.
Not that we were doing so great to begin with. Even before the pandemic, women on average were earning 82 cents for every dollar paid to a man, with black and Latina women making significantly less. Krawcheck, a former senior Wall Street executive, is even more worried about the gender wealth gap—the 32 cents that women have for every dollar owned by a man. In these terms, “wealth” is practically nonexistent for black and Latina women, who own a penny for every male dollar.
It’s a gap Krawcheck has been trying to address since cofounding Ellevest as a digital investment firm in 2014. “Our reason for being is to get more money in the hands of women,” she says. “And part of that mission is, ‘Who needs us?’ It’s people who in many cases aren’t ready to invest.”
Now her company wants to make those women into customers. Ellevest is pivoting away from its wealth-management roots to a membership-fee business model, one that also provides debit cards, savings accounts, and financial advice to customers who might not have enough money, or financial security, to care about what the stock market did yesterday.
As Krawcheck points out, that’s a relatively privileged worry: “A woman who’s investing means she’s paid off her credit card debt, she’s built her emergency fund, and she’s investing in her 401k. That’s a pretty high hurdle.”
The pivot, which Ellevest starting planning last year but accelerated after the pandemic’s onset, will also increase the competition it faces from other financial startups with similar models. Now Krawcheck is betting that this broader approach will both hasten her startup’s path to profitability and benefit other women, even as the pandemic and its resulting economic fallout add to the many obstacles facing our financial health.
Read the full story here.
Today’s Broadsheet was curated by Emma Hinchliffe.