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Women and Personal Finances

United States

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Contents

Trading Platforms in the US
Barriers to Entry in the US Trading Platforms
Disruptive Platforms
Competitor Analysis: Ellevest
Women Investing Habits
Current Financial Tools for women and pain points

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Trading Platforms in the US

PLATFORM	TRADE COST	ACCOUNT MIN.	OPTIONS	WHO IS IT FOR?	CONS
E*TRADE	$0.65 for 30 trades $0.50 for 30+ trades	None	Stocks, OTCBB, Options Trading, Futures Trading and Bonds	Best for beginners and great web service	Higher pricing for fewer than 30 trades per month.
CHARLES SCHWAB	$0.65 per contract	None	Stocks, Functional Trading, OTCBB, Options Trading, Bonds & International Trading	Best for IRA Accounts	Strict margin trading rules and relatively high margin rates
WE BULL	$0 per contract	None	Stocks, Crypto, Options Trading and ETFs	Best for no commissions	Limited tradable assets & new in the market
INTERACTIVE BROKERS	$0.65 or less with tiered pricing	None	Stocks, Functional Trading, OTCBB, Options Trading, Bonds & International Trading	Best for Advanced Traders with emphasis on options trading	Complex pricing
TASTYWORKS	$1 per contract to open. None to close	None	Stocks, Crypto, Future Trading, Option Trading	Best for Option Traders	Few Investment Options
AMERITRADE	$0.65 per contract	None	Stocks, OTCBB, Options Trading, Futures Trading, Bonds and International Trading	Good for Beginners	No access to International Market
ROBINHOOD	$0 per contract	None	Stocks, ETFs and Options	Good for Limited Research	Controversial order practices

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PLATFORM	TRADE COST	ACCOUNT MIN.	OPTIONS	WHO IS IT FOR?	CONS
TRADESTATION	$0.50 per contract	None	Stocks, Future Trading, Option Trading, ETFs, Crypto and Bonds	Best Trading Technology	A little complex for beginners
ZACKS TRADE	$1 for first contract	$2,500	Stocks, ETFs, Option, Bonds and International Trading	Good for slow investors	Complicated account opening
ALLY INVEST	$0.50 per contract	None	Stocks, ETFs, Option Trading, Future, Mutual Funds & Bonds	Good for current Ally customers	Limited Research & Tools
MERRILL EDGE	$0.65 per contract	None	Stocks, OTCBB, Options Trading, and Bonds	Best for Research Tools & Bank of America customers	No Fractional Share Trading
FIDELITY	$0.65 per contract	None	Stocks, OTCBB, Options Trading, Futures Trading, Bonds, International Trading and Fractional Trading	Best for Everyday Traders Only brokerage with $0 for stock trades	Banking Services offered by third party
FIRST TRADE	$0.00	None	Stocks, Options, ETFs and Mutual Funds	Best for Chinese Speaking Investors	Beneficial for Chinese Investors
BETTERMENT	$0.00	None	ETFs and Stocks	Best for Hands Off Investing	Limited Portfolios & ETFs
VANGUARD	$0.00	None	Stocks, Mutual Funds, IRAs, ETFs	Best for Low-Cost funds	Complex Commissions
SO FI	$0.0	$1	Stocks, ETFs and Crypto	Best for low account minimum	Lacks advanced tools

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Barriers to Entry in US Trading Platforms

PLATFORM	LEVEL	ENTRY BARRIERS
E*TRADE	BEGINNER	Higher pricing for fewer than 30 trades per month. $19.99 transaction fee for mutual funds not on the no-transaction-fee list Automated investment accounts require a $500 minimum to open High margin rates relative to its competition
CHARLES SCHWAB	BEGINNER	No automatic cash sweeps Limited number and regions for international stocks Relatively high margin rates
AMERITRADE	BEGINNER	$6.95 fee per trade for penny stocks. No access to international stock markets
ROBINHOOD	BEGINNER	Lacks trading tools and market research offered by the competitors
BETTERMENT	BEGINNER	No Individual Stock and High Fee on Personalized Advice
SO FI	BEGINNER	No tax loss harvesting
WE BULL	INTERMEDIATE	No fractional trades, mutual funds, or crypto trading available Provides a lot of data, so much that beginning investors may find it overwhelming Automatic dividend reinvestment not available
TASTYWORKS	INTERMEDIATE	Less Trading Options Intimidating user interface

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PLATFORM	LEVEL	ENTRY BARRIERS
FIDELITY	INTERMEDIATE	Higher Margin Rates and Complicated Banking No custom screening on mobile
MERRILL EDGE	INTERMEDIATE	Extremely beneficial for Bank of America Customers No Penny Stocks and OTC as well as no fractional trading
FIRST TRADE	INTERMEDIATE	Firstrade Navigator trading platform requires at least $10,000 in your account.
ALLY INVEST	INTERMEDIATE	Extremely beneficial only for Ally Bank customers
VANGUARD	INTERMEDIATE	Limited Research & Unviable for active traders
INTERACTIVE BROKERS	ADVANCED	Mutual funds have a transaction fee of $9.95 No fractional share trading
TRADE STATION	ADVANCED	Research trials industry leaders. Educational content split between two sites
ZACKS TRADE	ADVANCED	Limited educational and research tools

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Disruptive Platforms

TRADINGVIEW

BEST FOR ALGO TRADERS

For algorithmic trading or any kind of high frequency trading, having a solid, backtested trading strategy, complete with entry and exit signals and a risk management framework, is key to success. Zen Trading helps in devising those strategies for making trading easy.

ZEN TRADING

TRADE IDEAS

EQU BOT

INVESTMENT COACHING

Using the most advanced Simulated Trading Platform available, investors learn how to trade and invest without risking actual money. Trade Ideas becomes their coach and partner in navigating the stock market

AI POWERED ETF KNOWLEDGE

By gathering and processing data from various sources around the world, the company systematizes the investment process to “build a cause-and-effect understanding of markets, companies and management.

BEST FOR TECHNICAL ANALYSIS

100+ built-in technical indicators for market analysis, which covers most popular trading concepts and indicators. It also offers 5,000+ custom-built indicators.

INVESTMENT PLATFORM FOR WOMEN

A platform made for women to help them with investing, banking, learning and coaching. Easy planning for future and retirement, with plans starting at $1 per month.

ELLEVEST

INVEST AT PAYPAL

POTENTIAL UNIVERSAL STOCK TRADING PLATFORM FOR US CUSTOMERS

The payments giant has been exploring ways to let users trade individual stocks. Paypal is looking at direct rivalry with Square. This platform will result into widespread easy investing.

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Competitor Analysis: Ellevest

Key Considerations

Questions of social responsibility: It is considered more expensive than other robo advisors. Even though it is meant for women, people feel it charges them more with their hidden costs (tax slabs & membership prices). Ellevest charges $1000 quarterly for talking to an advisor.
Low Risk Portfolio: Millennials & Gen-Z who have recently started earning believe in having high risk portfolios. Ellevest only goes up about 55% of stocks, which is frustrating for many people
Aversion to Robo Investing: A lot of people like to physically choose their stocks and a percent of cash needs to be kept in the portfolio. No control over investments can really turn off some people.
Non Transparency in Fee Structure: Their fees are non-transparent. It looks like they charge a monthly/yearly fee for being a customer, plus various other fees that are not overly clear. Fidelity, Schwab and Vanguard are more transparent about their fee structure.
Interface Issues: Customers have preferred Betterment over Ellevest simply because the User Interface is better. People have reported issues on unresponsive app and lagging with the app.
Elderly Hostility: The investment recommendations to the elderly people may come off as aggressive. Different age groups have different priorities when it comes to investing. The major drawback here is portfolios can’t be changed much beyond adjusting the risk level.
Overt Attempt to Appeal to Women Customers: Many customers are advocating investing as a gender neutral approach. While Ellevest is meant for women alone, it has narrowed down the definition of who is a women and excluded the men entirely.

Noteworthy Considerations for Choosing Ellevest

Futuristic Investing Approach & Financial Advice: Impact Portfolios, Retirement Funds etc
Goal Wise Saving: Customers can choose their goals and save accordingly.
Selling Emotions Sale Technique: Ellevest has made sure it touches the emotional side of investors by talking about systematic racism and gender pay gap.
Intersectional & Feminist Communication: Their plans are very women centric with inclusive communication.

Flaws of Ellevest

Low Interest Rate on Short Term Savings : Ellevest Save accounts currently earn 0% interest. Other robo-advisors offer savings accounts or cash management accounts paying 0.30% or more.
Few Accounts Supported: Ellevest offers only individual taxable accounts and IRAs (Roth, traditional and SEP). IRA access requires a Plus or Executive membership. Ellevest doesn’t offer joint taxable accounts. 401(k) and 403(b) rollovers are only available for Plus and Executive members.
No Tax Loss Harvesting: Ellevest doesn't offer automated tax-loss harvesting. That could be a turnoff for the wealthiest investors with high balances in taxable accounts.

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Women Investment Landscape

Source: McKinsey (2020)

5 YEARS

Additional years of life expectancy for women compared to men

30%

Increase in number of married woman making financial decisions in the last 5 years

70%

Women change financial advisors within 1 year of spouse’s demise.

Women & Financial Management: Target Areas

Greater Demand for Advice

Affluent female financial decision makers are likelier to have an adviser. They are also more willing to pay a premium for in-person financial advice.

Lower Financial Self-Confidence

Only a quarter of affluent women say they are comfortable making investment and savings-related decisions on their own

Less Risk Tolerance

Women tend to prioritize capital protection over alpha generation and manage their money through passive instead of active investment strategies

Greater Focus on Real Life Goals

Health and Retirement are top focus in life for women. Women are roughly ten percentage points more likely to say they are concerned about outliving their assets.

19%

Black and Latinx women started investing in 2020, compared to 5% white women.

60%

Women let someone else manage their investments in the stock market

75%

Women have learnt how to choose their investments through educational tools.

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Disadvantages faced by women towards investing

Source: NerdWallet (2021)

62%

Americans think you need $1,000 to start investing.

45%

Women think investing is for retirement fund.

46%

Women value the kinds of investment accounts offered..

32%

Women value the availability of human advisors.

70%

Women save 10-20% of their monthly income.

20%

Women have no experience in investing.

Determinants of how women invest

Patience

Overconfident investors believe they know more than they actually do, and that results in frequent traders. Women earn higher rewards as they are more patient with Investing.

Discipline

Male investors tends to invest 100% of their accounts in stocks. They are also 6x more likely to make massive allocation shifts as compared to women.

Willingness to learn

Women are more likely to seek financial and investment advice as compared to men.

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Management Matrix & Market Size

$8.28 Bn

Value of Global Online Trading Platform Market (2020)

5.1%

CAGR during the period 2021-28

$12.16 Bn

Projected Market Value by 2028.

$3.47 Bn

American Online Trading Platform Value.

3400+

Broker Dealer Firms are regulated by FINRA in US

Women Save More	Women Score Lower	Women Invest Less
On an average women save 9% of their salary compared to men.	Women score relatively lower than men when it comes to financial literacy mostly due to limitation of resources	According to a survey by Wealthsimple, women invest 40% less than men.

WEALTH MANAGEMENT GAP
Women think differently than men when it comes to finances.

Changing Concerns	Working with Advisor
Most women need goal-based investment strategies. The top priority areas are: Child Care & Retirement	Women are constantly working with new advisory platforms. Women make up for 30% of users on Robinhood.

RESULT
Financial Independence by women across all regions, ethnicity and age groups.

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Current Financial Tools for Women

Budgeting Apps

Some of the popular budgeting apps among women are: YNAB, Freshbooks, Mint and Quicken

Social Security Estimator

Social Security's Website for Women provides information on retirement, disability and other issues. The Estimator enters earning information and records estimates.

Free Educational Tools

Various free programmes have been developed for women to make better financial decisions. Eg: The Women’s Saving Initiative, Better Money, Average Jane Investing

Women Centric Financial Advisors

Many websites/financial advisors have been curating content centred around women exclusively. Eg: HERMONEY, Wealth Choice

Money Personality Quizzes

Surveys & Quizzes for assessing the earning and spending type, and customized financial advice.

Money Personality Quizzes

Surveys & Quizzes for assessing the earning and spending type, and customized financial advice.

Courses on Personal Finance

Clever Girl FInance provides free courses on building a good personal finance base, side hustle and freelancing.

Women Community Based Investing

Women with Cents is a platform to engage financial tips

Debt Pay Off Aggregators

Credit Karma & Bank Rate are great platforms for calculating/planning debt and loan repayments

401k Savings Calculator

When the financial obligations are restricted to a small budget, it is sensible to use the 401k savings calculator.

Commute Cost Calculator

Financial planning has a lot to do with how women are traveling to work. Commute Cost Calculators can calculate the transportation expense and provide a solution

Future Planning Calculator

Customizing future financials according to heavy investments can be helped with Financial life calculators.

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Research Material

Trading Platforms in the US & Barriers to Entry

Disruptive Trading Platforms

Competitor Analysis

Management Matrix

Women Investing Habits

Financial Tools Available for Women