Aug. 01–A robo-adviser just for women?
That’s the latest step for Amanda Steinberg, the South Philly native who founded DailyWorth, a financial-advice newsletter with more than one million women subscribers.
Last year, Steinberg expanded Chestnut Hill-based DailyWorth into financial advice and money management with the launch of WorthFM, which offers a pre-selected portfolio of eight exchange-traded funds.
WorthFM is similar to robo-adviser start-ups such as Wealthfront or Betterment, with portfolios that are pre-selected and rebalanced automatically.
WorthFM women start out with memberships of $2 a month to try the service, which opens three accounts at the same time (savings, investment, and retirement). Once a member accrues $5,000 in invested assets, WorthFM charges a 0.50 percent flat fee.
Steinberg said it’s a way for women who aren’t familiar with traditional finance to get started in all three areas to build net worth.
“Our readers are very interested in investing, but they don’t read Yahoo Finance or MarketWatch,” she said in an interview. “Our women were asking repeatedly about products, such as, ‘What account should I open first?’ So clearly, the marketplace wasn’t addressing the need. As an entrepreneur, I couldn’t pass it up.”
Money management for women might seem like a small niche, but for Steinberg, it’s been a successful one. She has raised $9 million in venture capital so far and expects to complete another round of financing in 2017.
She started DailyWorth in 2009 as a free financial email for women, giving advice on budgeting, savings, investing, and boosting earning power. Steinberg then found her own portfolio managers weren’t cutting it, so in 2015 she created WorthFM as an online platform with Michelle Smith, the CEO of Source Financial Advisors, a practice serving divorced women.
Smith’s clients were mostly high-net-worth divorced women, but “she wanted to expand into a broader audience,” Steinberg said.
WorthFM’s portfolio is sub-advised by North Capital, and a moderate-risk portfolio includes the following holdings and allocations: SPDR Barclays High Yield Bond ETF (2.01 percent); SPDR Dow Jones Global Real Estate ETF (2.04 percent); Vanguard REIT ETF (4.18 percent); Vanguard Emerging Markets ETF (4.35 percent); Vanguard Small Cap ETF (7.55 percent); Vanguard FTSE Developed Markets ETF (9.75 percent); iShares Core S&P 500 ETF (32.17 percent); and iShares Core U.S. Aggregate Bond ETF (37.96 percent).
Robo-advisers are the latest way brokerage firms and money managers are trying to attract younger, digital-only investors (read, “millennials”).
Last week, Fidelity Investments launched Fidelity Go, a robo-adviser with a $5,000 minimum investment and all-in costs, including advisory fee and underlying fund fees, ranging from 0.35 percent to 0.40 percent.
Investment options include Fidelity index funds, BlackRock iShares ETFs, and muni-bond funds for taxable accounts.
For her part, Steinberg wants to expand WorthFM portfolios to include a socially responsible investing offering or fund, but that’s still in the research phase. About two-thirds of WorthFM wait-list members have expressed interest in socially responsible portfolios, she said, but often the underlying fund fees are expensive.
“I personally had an actively managed SRI fund at Calvert, but the fees totaled about 2 percent, which is two to three times what we’re now offering. And the performance didn’t warrant it,” Steinberg recalled.
Her firm has just hired David Wieder, cofounder and CEO of Domini Social Investments until 2002, to figure out how to offer SRI funds. (Domini also runs socially responsible investment funds.)
“I’m thrilled to have Wieder invest in us and join our board of directors,” she said.
DailyWorth readers have converted over to become WorthFM clients at a rate of about 1.5 percent of those who have been invited, she noted.
Steinberg herself has all her money invested in WorthFM’s portfolio.
“We have about 250 clients on the platform, and assets under management of just $500,000 — it’s tiny, but we’re brand new, and a lot of women are now converting their 401(k) accounts over to us.”
At some point, WorthFM may offer one-on-one financial planning, since clients are asking for it.
Also, she said, “we’re exploring perhaps a crowdfunding round or [Regulation] A option, because having women as investors and shareholders as well is my dream.”
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