 Hey, so I have been following Sally Krocheck's career since 2007, so it was a total privilege to spend time with her at the offices of her latest venture, and you're going to love listening to her. Not only is she a Wall Street legend on a mission to help women and best, but she's witty and frank and full of life, and she has this great advice for her daughter that's going to make you laugh out loud. So listen in. Hey, we are in Midtown Manhattan at the headquarters of LVEST Elevate Sally Krocheck, founder of both Here With Us. You are a legend on Wall Street, but you, even more so, just got yourself like $35 million for LVEST. How does that feel? It feels really good, and it feels like we have a lot of work to do when you have investors who believe in your business and believe in your vision and are investing money behind them, and particularly when they're individuals like Muhammad El-Aryan and Venus Williams and Melody Hobson and Karen Finerman, and who you have such high regard for, rethink, impact, penny, pritzker, PSP growth. We've got these amazing investors, but boy, you want to do a great job for them. What changed though? Because in 2015, you started with some seed money, and I say some, we sleep $10 million, a lot of money. Muhammad was there. Well, here we are. Only two years, what? Two years later? But we're building a business. That's what changed. $35 million. So what are you doing? You're investing in women-run companies. No. Okay. So LVEST, to date, has been a digital investment platform for women. And so it helps women invest. Women do not invest in this country as much as men do. They keep more of their money in cash. As a result, women can tend to lose hundreds of thousands, if not millions of dollars over the course of their lives, because they're not as invested. Having spent my career on Wall Street, I saw this and said, wait, something is broken. Can we build a company? Can we build a product that can help them fix it? What has happened in the two years is that we've gone from people saying, women won't invest. Women won't invest online. Women are too risk-averse to invest. The men do it for them. It's a niche market. Can you really get them to change their behavior? Two, we believe we are one of the fastest out of the gate digital investment platforms ever. We're getting feedback on the brand. We're bringing in. Our community is now tens of thousands of women. It's early days, but thousands are investing tens of million with us. What's changed is that we've begun to build a business. The reaction has been good, and the women really excitingly are asking us to do more for them. They're saying, not only do I want to do the digital investing with you, but how about planning as well? It's really exciting. Then explain what Elevate is. Elevate? I like to confuse people. Yes. That's what we do. Very important to confuse people. There are two separate businesses, legally separate, Elevest, the digital platform, Elevate Network is a global professional women's network. It brings women together. If you think about it broadly, they're both targeted toward professional women. This one is, we hope, to help them, we hope, make more money through accessing the returns that investing has historically driven. This one, Elevate Network, we hope, will help women make more money by helping them advance at work. By getting women more money, we get women more equality. You and I both know women will not be fully equal with men until we're financially equal with men, and we've got a wealth gap. We retire today with two-thirds the money of men. For women to live their fullest lives, quit the job they hate, quit the man they hate, quit the woman they hate, all that stuff, we need more money. That ripple effect of women having more money helps the economy, society, our families, it's a win-win-win. It sure does, but how do you make up for, we do step out to have kids, we still are the ones that step out to help aging parents. How do you make up for that? I can't. I can't. I can't. That's so honest. But what we can do is hear the numbers, which is if a woman making $85,000 a year takes a two-year career break, do you know how much that cost her? You're going to say it cost, oh, yes, I can do the math, $170K, $1.7 million, $1.7 million because of the raises she doesn't get, which trickle through her life because of the 401K she's not investing in because she's not working, exactly. So I can't change society and say, we shouldn't have women take breaks or you men step up or whatever. What I can do is say, excuse me miss, ma'am, you've got 71% of your assets in cash, right? If you open a diversified investment portfolio with L of S, remember I talked about women lose hundreds of thousands, some millions of dollars over the course of their lives for investing. So having her then invest can make up some of that ground for it. Do we really invest differently because at the end of the day we all want to make money? No, we don't. This is a myth, right? The myth is women are so risk averse, women want less risk, no, no, no, no, no, no. What women want is to understand risk and sadly when women say, what's my risk? The street, the investing industry today answers in standard deviation or drawdown risk, right? Or high yield. Because they want to make you feel stupid. Right. Well, or we just, God used to speak our own language, it's sort of cool to have this secret language and you know the guys, we love them, we love, love, love, love them, they will invest through the jargon. Women tend to say, whoa, I want to get my A, you know, I'm going to go figure out, I'm not, I don't want to bother you, I don't want to ask too many questions, you know, I'm very respectful of your time. I'm going to go get a book on financial education and figure out what standard deviation is. You know. It's so true. Of course it's so true. I'm laughing. That's unique. And you know what she does when she gets home? Anything but that. Right. She never actually, right. Right. And I usually like to say everything is more interesting than figuring out what standard deviation is, including the laundry, including the laundry. Right. And even if she buys the book, it sits there. And so what we have found is, all right, we need to put it in English, right? For everybody to understand. And by the way, we need to not ask her what she thinks are risk tolerances. She doesn't know. Right. She doesn't know. He doesn't know. She doesn't know. She doesn't know if you ask her. Instead, as fiduciaries, we determine how much risk she can afford. And so if she's, of course, got a longer term portfolio and outlook, then we give more equities for her. If she needs to have an emergency fund, even if she said she was aggressive, we can't put her in anything but cash for her emergency fund. So I hope you're enjoying my conversation with L of S CEO and co-founder Sally Krajek. But you have to tune in next week when we get to hang out with Nikki Palmer. She's the chief network officer at Verizon. We went to their super cool operation center in New Jersey and we're going to talk hurricane relief, 5G, getting girls into stem and steam and how she survived breast cancer. So be sure to tune in. There is this amazing transfer of wealth that's about to happen over the next couple of years, right? Like in the trillions. Right. From husbands to wives. You know it. And these are my words, not yours. White men talking to white men financial advisors who are all in their 50, 55, 60s. So play that out. What happens? Well, I'll tell you what happens today. In the businesses I used to run, the Merrill Lynch, Smith Barney, et cetera, do an amazing job for middle-aged white guys. And middle-aged white guys do not leave their financial advisors. They leave in any year at a single-digit percent rate, much lower than people think. And the year after that gentleman's death, his wife leaves at a rate of 70 to 80 percent. And so what happens today is she goes and people say, where does she go? She puts money in the bank. And oftentimes she leaves and says, look, dude, you know, you didn't talk to me for all these years. You know, 20 years or 40 years, you all played golf. You had the option straddle strategy that I never, you know, you weren't dealing with my needs. And so I'm gone. And so that industry, if it doesn't figure it out, will begin to decline. So then are you worried about the robo-advisor stepping in at a time like that? Well, I hope they do, since that's essentially what we are. But the robo-advisor can't really, the true robo-advisor can't take you through life. I mean, eventually you're going to need to talk to people. Depends on the person. You know, my view on this is that in our industry we manufacture pitched warfare. And that for some period of time it was, no, the big firms, the Merrells, the Morgan Stanley's are going to, no, it's going to be the independents, you know, the RIAs, the fiduciary versus the broker-dealer. And we paint it in black and white. The truth is they both have survived. Same with robo, you would call it digital-advisor, I would call it in people. You know, there's going to be a mix. And there will be some clients who are going to want digital only. And there are going to be some clients who are going to want people only. But there are going to be a whole bunch who are going to want either or, perhaps for part of their portfolio, perhaps at different points in their lives. But these things will come together and coexist in an elibest, which began as digital only. You would say robo only. We're adding planners and advisors. And the big guys who are people, started off people, are adding digital capabilities as well. So the whole thing will come together. It will be a mix. What are some of the biggest mistakes women do make? Oh, in investing? Yeah. Different from men. So I always say that all of the articles out there say, mistakes people make in investing and they should all be changed to mistakes men make in investing. And so the mistakes men make in investing are typically over-trading and falling in love with their winners and not, you know, two high fees. For women, it's not investing. It's pretty straightforward. It's inertia. It's just not putting money in. It's just inertia. It's, I'm going to do it. I'm going to do it next week. And then next week doesn't come and doesn't come. And she misses out on the enormous power of compounding, which is just massive. That's what gets her to missing out on those hundreds of thousands of dollars over the course of her life. When she does invest, she tends to have a longer term perspective than gentlemen do. She tends to not trade as much as gentlemen do. And she tends to perform better than gentlemen do. Are you seeing changes? Are you seeing this change? Are you seeing more and more women actually start to understand this? This is what is so exciting. So two years ago, when we started, I Googled the term gender investing gap, nothing. I bet there was one article and then it was like tumbleweed sort of going through Google. Today we're hearing women talk about it back to us. Today, we're, you know, I went on, it was about to go on stage a couple weeks ago and there was an individual from one of the large financial services companies who got up there, began talking about the gender investing gap, began talking about, as we do, the fact that women live longer and that we need, we are the only ones today who plan for it. Women's salaries peak sooner. We are today the only ones who plan for it. Women take more career breaks. We are today the only ones who plan for it. But this individual in this large financial services company started using my lines, used a couple of my jokes, which I was like that. Now you have crossed the line, right? Although that's the ultimate form of flattering. I know, but then I was sort of waiting for her to say end our solution as she did not. But it was fascinating, I mean then I had to her scramble to put together a new talk. But it was fascinating that we went from two years ago nothing to the industry conversation has started and more importantly women are talking to us back at us about this on social, in the speaks alley, in the email feedback that we get. But the statistics are there. We run most households and by we, I mean, I know, I have been for 17 years now. So we handle all financial investments in the household. We pay most of the bills. We make most of the purchases. Why has it taken so long for, I mean, the word to get out? Because, because we do all that, we are typically the treasurer of the household. We have not been the CFO. So we have not, we have left the investing to the men. And I would argue it's because the messages we got is it's a manly man world, right? That if you look at investing TV, it's sport analogies, sports analogies, beat the market, outperform, pick a winner, right, you know, it's this sense of winning. It's a sense of picking the right. The industry symbol is a bull, it's a phallic symbol. It's that financial advisors are 86% male. The messages come through loud and clear. This is not for us. Our mothers didn't do it. It's the manly man's game. And so we felt left out. Now, you know, now we're starting to, as we talk to women saying, look, you know, 90% of women manage their money on their own at some point in their lives. Some because they want to, many because they must. If we're living five, six, eight years longer than men, and this is so important because if we have a retirement shortfall in this country, saving shortfall, which we do. And we live six, eight years longer than men, and we are 80% of nursing home residents as women. If there's not enough money, it's our problem. And you're beginning to see articles about elderly women moving in together because they can't support separate households. They're doing a golden girls thing in order to split the expenses. It's tragic. It's tragic. And the guys, I love them. We love them, but they're going to be dead. Right. Which, by the way, God forbid. I mean, and God forgive me, it's a good thing because it will change the mentality. And again, these are my words, not yours, but it will change the overall mentality, won't it? Like, won't we then start to see differences in the boardrooms? Because right now, to your point, the next sea is filled on the golf course when a bunch of guys are out golfing together. Like, because even that has to change. How do we make a better boardroom? Well, now we're on to the other topic, right? Which is we've stalled out in terms of the advancement of women in business. You know, rewind, again, two years ago, we didn't know the term gender investing gap, but we were all leaning in and it just felt like we're on our way, we're going to have a female president soon, and we were just making progress. And now it just feels like the whole thing has come to a screeching halt, that we're not advancing as quickly. The gender pay gap isn't closing as, I mean, as quickly or at all. The gender gap in the boardroom, it's going to be decades before that thing closes. You know, the number of women CEOs, we hit a record and then we went right on back down in pretty rapid fashion. I agree. 28 of the S&P 500. And more people believe that we will see time travel in our lifetime than that we will see gender parity amongst Fortune 500 CEOs. Okay. Why? Hello. I mean, again, is this because that generation has to go away, that mindset has to go away? Because if I talk to my teenage daughters. Do the pipeline thing to me. Do not do the pipeline thing to me. Why? Because it's not true. So, you know, everybody, we just need to let those young people come up. They're so different from us, et cetera. When I got to Wall Street, I said the same thing. I'm like, you know what, my investment banking class is a third woman. I don't see any women senior levels, but we just need to make it through. And then, you know, what happens in the 20s, you're like, this is amazing. Everybody is happy and we're, you know, not quite equal, but you know, they're 30 or 40 percent of us. Then you get your 30s and the guys start to get promoted over you, but you cannot pay attention because you just had the second kid, right? You got the PTA, you got the sick parents, you got the whatever. And then in your mid-40s, you pop up after they go away to college, maybe your early 50s, you say, where the frick are all the women? And that's what happened to our generation and is what happened to the generation before. And what I've fred about is if we are just, hey, we just need to let the kids make it through, the impact of society is so great. You know, we still, today, our kids were brought up in an environment in which you say CEO and they think male, you say leader and they think male, you say president and they think male, right? So it's not just let's sit back and let this happen, it has got to be very active action on all of our parts. And what is that active action that you need to see? Well, I actually think what's going to change things is women starting their own businesses, that it, you know, that the cost of starting businesses has come down so much that this is a real option for us today. Whereas before it was, hey, if they don't promote me, I guess I can go to another company or go home. Today, hey, if they don't promote me, I can go to another company knowing a lot more, because there are all these sites out there that will give me crowdsourced, you know, views on culture at a company. Other women, if I'm looking for that, I can go home or, you know, with the cost of technology coming down, the cost of real estate, you no longer have to rent a whole place, it's WeWorks, you don't have to get on a plane, it's video conference, you can hire freelancers, you can hire part-time people. All of a sudden starting businesses is becoming much more in the grasp of individuals. And so what I think may happen is some companies will get it, some companies won't, and those that don't will see a talent exodus for those who don't want to stay home to start their own things. That's not a good sign for corporate America, then. Well, but it could be a great sign for the economy. The jobs are created in small and medium businesses, right? And by the way, the feedback loop could be really interesting, because if companies start to say, we're losing these great people and they're starting successful businesses over here, maybe we should work a little harder, right? Whereas, suppose if your only choice was to go home, you know, okay, you lost the woman who's at home with the kid. I don't know, you know, whatever. I would like to see that happen, actually. And I hope you're right that there's going to be these people lifting each other up. Did you have someone who lifted you? I mean, we could talk for hours about 2007, and I don't want to bore you with that again, because it's over. But did you have mentors back then? Oh, yeah. I had mentors, I had sponsors, I had amazing people who coached me and critiqued me and promoted me. I mean, it was amazing. And in fact, I would say that of my generation, the very successful women I know all did. I mean, almost without exception, had that somebody who really took an interest in them and sort of paved the way for them. Now, I can't tell you any of those were women, because there weren't more senior women. And so it, you know, certainly had a new generation. But I made a list of the women of your generation that all went, I mean, I feel like they took a bullet. You had Zoe Cruz at Morton Stanley. You had Erin Callahan at Lehman. Yourself, all during the financial crisis, all women. Yes. This is what happens. That during crises, you would think, in coming out of crises, you would think that the management teams would become more diverse. Oh, this group A, by definition, caused the crisis because they were in the leadership. So let's let group B have a chance. The exact opposite tends to happen after crises, which is there actually becomes less diverse. Because what happens during a crisis is I never saw, I absolutely never saw a group say, you know what, now that we're in the middle of a crisis, let's get rid of the women or let's get rid of the people of color. What I did see was, you know what, we got to cut people and just not Joe, who happens to look just like me and be just like me, because I, Joe can get it done. Joe's, you can count on Joe. And then when it comes time to promote somebody, well, I'd love to promote Susie or Jamal. But you know what? It's got to be Joe, because I can trust Joe and we just don't have the luxury now, right? We just don't have the luxury. And so that false comfort of somebody like me happens during crises. And so it's not surprising at the time, but not surprising in hindsight that some of the high-profile fatalities were women. I know it's been a while and you've digested this and stuff, but it seems like. Digest it and digest it and retweet it over. But you're, I mean, you came out of Phoenix, right? You came out of the fires. And it's, I find it very interesting that, you know, people always ask, people would never ask a man, oh, how did you handle that failure? And yet it's the first question they ask a woman. Oh, sure. Well, I'll give you another. I remember talking to a journalist after getting booted out of city running Smith Barney. I was the one executive who returned client money during the downcour. We've missold products. We've done wrong. And I said, let's partially reimburse the clients. We eventually got it done. But my CEO said, you stepped out of line. You were, you know, you didn't sit down and shut up. You're done. And I remember talking to a journalist who said, you're never going to come back. The guys can come back from such a public firing, but women cannot. And so I said, damn it, I'm coming back. And then I went to Maryland. Bank of America got re-orged out a few years later. Who would say that? A woman. A woman. You know, as in the, you know, I'm just so sorry. And I'm so empathetic with you. And what a shame. And I'm sorry it had to happen to you. And I'm like, hell, effin no. And I just have too much energy. And quite frankly, I'm too grateful, you know, that for the downs that I had, you know, the ups were more than worth the downs. And I can't believe that I grew up in Charleston, South Carolina, and ended up, you know, in the boardroom of Citigroup and ended up the boardroom of Bank of America and ended up in the White House. I mean, like what? And so for me then to have had these amazing experiences, to see that there is a gender investing gap that is impacting women to such a big degree, to see that nobody is addressing it, to see that the people that I was talking to, the CEOs of the big banks, when I went to them and said, hey, here this is, let's work on this together. I'll work for you for free, but let's figure this out. No, no, no, no, no, no, no, no, no, no. It'll never work. It'll never work. And I thought, if I don't do this, nobody's going to do this. And if I don't do this, I can't look myself in the mirror quite frankly. I love that. Thank you. What do you tell your daughter these days? I mean, just, I said, put down the beer. OK, after that. That's great advice, by the way. It's really, really good advice. She's in college. Do you worry that she's going to be in college? She called me the other night. I ripped the tendon in my foot, I said. I said, what happened? And there were high heels and alcohol involved. I'm like, yeah, OK, that does it. That's amazing. But you are an amazing role model for her. I mean, in every way. I mean, I didn't hide the downs from them. I remember both kids coming in the morning after I'd been fired to check on me. You know, as I sort of lay in bed, like, I don't know if I can get out of here. I might just stay here for, like, the year. Spring, the fucking year, right? And I remember them checking on me. And I remember thinking, you know, I'm going to get back up and I'm going to fight partly for them. But, you know, they've been so great for me. Because whenever I had a tough decision that I had to make, it worked. My, you know, you'd get advice from this person, that person, this person. And it would always be conflicting advice. And the only thing I ever had to do was to think to myself, if my kids were standing here and here, what, as I make this decision, what would I want them to see me do? And when you phrase it that way, to me, it always becomes crystal clear, the answer. Do you worry she's going to hit these little glass ceiling roadblocks along the way? Well, that's why I think we have to work hard to close these gender money gaps, right? That this generation, we've been so blessed. You know, each of us, yeah, it's hard when you're 22. You don't want to come into work and be like, I'm all about breaking the glass ceiling. But when you get to a certain level and have a certain platform and are able to talk about it, I mean, I love that Cheryl Sandberg used her platform to put out this message. And that others have used their platforms to debate that message and, you know, move the message forward and move the message differently. And so for those of us who've reached a certain level of success to pay it forward, so to speak, for these young ladies, it'll never be perfect, I'm sure. But to try to help them make their way forward. So before I let you go, what's next? You got? What do you mean, what's next? Come on now, you got all this money. You got a book. There's gotta be something. Well, we're doing what we're doing. We're really trying to build an iconic, great business. And so we have a long way to go to do that.