Robo-advisor for women targets literacy not assets

Robo-advisor for women targets literacy not assets

Robo-advisor for women targets literacy not assets

Canada’s first robo-advisor for women is targeting 600,000 sign-ups by early 2021 as it aims to provide a “safe zone” for new investors.

The platform is the brainchild of Tuula Jalasjaa, the former head of Holliswealth, who has delved into her experiences and “tons” of data that show how women are still struggling to understand basic financial concepts. Smart Money for Her is a robo-advisor designed to help women understand the fundamentals before moving on to more advanced financial scenarios.

With women set to manage more than $4 trillion of the world’s wealth over the next decade, Jalasjaa last year also launched The Women’s Collection, a website that aims to improve financial literacy for women via courses, podcasts, webinars and social events.

Smart Money for Her is an extension of that, providing an online tool where women can put into practice what they’ve learnt with a minimum investment of $500 and a management fee of 65 basis points. The B2B product is being marketed to companies so they can make the tool available to employees or advisors, who will then pass it on to clients.

While a profit-making venture, Jalasjaa told WP she was not focused primarily on assets, with the motivation clearly on growing the number of financially literate women who are then able to invest and put their learning into action.

Being first to market in Canada is a feather in Jalasjaa’s cap but after also holding executive positions at DundeeWealth and Scotiabank, and juggling her career with being a single, divorced parent of two, it’s a business model that has been on her mind for a long time.

So, with a plethora of robos now in the market, and banks having rolled out numerous offerings, does Smart Money for Her offer enough of a differentiator to attract customers? Jalasjaa said that misses the point.

She added: “I don’t see it as a differentiator thing; I see it as a tool for our students to access where they can put what they learnt into perspective. A lot of the assumptions that were built into the questionnaire on the platform are from a women’s perspective. We looked at each goal and how a woman would look at it – that’s a nuance we have.”

The result of two years’ work, the team worked at making sure these assumptions were accurate and intuitive from a women’s perspective. According to reported statistics, about 60% of women would rather talk about death than their finances and The Women’s Collection courses focus on anything from how to buy an RRSP to the difference between index-linked and an ETF.

Jalasjaa said: “There are a wide range of topics around life events that help you understand different things – from budgeting to estate planning to what happens when your spouse dies or when your parents pass away and what type of financial tools do you need.

“This is a robo platform which is there to guide you and be a safe zone to start investing. The support of a professional is available but the idea is that once women receive the education, they should have the knowledge and confidence to use the robo on their own."

The portfolio contains a number of ETFs, including the MacKenzie Global Leadership Impact Fund, which is focused on firms that have gender diversity or women leaders. The low-risk portfolio, which is called the “Income Portfolio”, also includes Canadian investment grade bonds, US high-yield bonds, Canadian large caps, REITS, FTSE Canadian high dividend yield and some iShares.

The 65 bps also gives customers access to The Women Collection articles, podcasts and invites to the events.

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