Will this robo-advisor close the gender wealth gap? Qplum review

wealth gap single moms women

If you follow this blog, you know that I’m on a personal mission to help close the gender gap — with a special focus on getting women to earn, save, and invest more.

It is not enough to qualify income for men and women. We also must ensure that women are saving and investing at equal — if not greater — rates.

Women need more money than men for the long-term

We outlive our partners and are far more likely to be caregivers of sick and older relatives, as well as children when they are both young and adults.

Part of the reason that women do not invest and save as much as men is that the entire financial world is grossly dominated by men.

Men create the financial products at our disposal, dominate the marketing campaigns that explain and sell these products to us, and design the user experience for signing up and giving banks and brokerages our hard-earned money.

In other words: If you’re overwhelmed, confused or dismayed when it comes to money management, it’s not your fault.

You are being asked to trust one of the most important parts of your wellbeing to a system that was not designed for you.

That makes me really, really mad.

Needless to say, when I learn about financial firms that are lead by or that target women, I am all ears.

The fact that these organizations even exist is progress. When they are fantastic organizations, my heart sings. There is hope!

Enter qplum

Qplum is a robo-advisor that specializes in artificial intelligence to maximize investments. There are other robo-advisors that offer similar services, but qplum is co-founded by a woman, Mansi Singhal, a New Jersey mom with more than a decade of experience managing portfolios of more than $100 million.

She told the blog Making Sense of Cents:

I used to be a high-profile portfolio manager for big banks and hedge funds. I was very successful and made a lot of money for them. But I didn’t like how they had access to certain money management tools that regular people – like my friends and family – didn’t even know existed. We created qplum to make those tools available to everybody.

Keep talking … I’m all ears!

What is a robo-advisor?

A robo-advisor is an investment tool that relies almost entirely on computer algorithms to invest. This is a good thing. Machines have proven over and over that by taking human error and emotion out of the equation, they make better investors than people.

Says Mansi of qplum:

“Our biggest differentiator is our asset management techniques. You simply cannot get access to these strategies unless you are investing through a private wealth management group or directly in hedge funds and even then, you cannot beat our fee structure and transparency.

Our strategies are a combination of long-term outlook and short-term opportunities. For example, we rebalance daily, which can alone add up to 2% in fees every year. We use many established artificial-intelligence-based methods in strategy construction.

Our in-house trade execution and structural risk management in all portfolios have been huge technological advantages for us compared to other online advisors.”

How does qplum work?

  1. You sign up with qplum here.
  2. Connect with an advisor who listens to your needs and goals, and together identify a portfolio of strategies for you. They promise to speak plain English. If you don’t understand something, ask. They will break it down, and not make you feel dumb (because you’re not).
  3. Your money is placed in a separately managed brokerage account under your name.
  4. Qplum experts execute your chosen portfolio on your behalf.
  5. The robo-advisor manages your money for you. Trust me when I say this: You don’t need to understand the inner-workings of investment tools to be a successful investor. Just like I don’t need to know how to use this Macbook to successfully run a business, you don’t need to understand artificial intelligence algorithms to build wealth and security. That’s qplum’s job. For that, you pay them 0.5% of your managed funds per year — or $4.17 per month for every $10,000 invested.

Why is qplum focused on investing for women?

Qplum’s site speaks specifically to families.

And more than 40% of households are headed by single moms — women who make 100% of all the decisions for their families.

The irony of the gender wealth gap is that women are actually better investors than men. You read that correctly. As Mansi wrote:

Though the financial world is still heavily dominated by men, it’s sobering to know that it’s a scientific fact women are better at managing money. (Editor’s note: We love scientific facts!) Women make better traders at banks. They also make better portfolio managers at hedge funds. This has nothing to do with smarts learned from books and everything to do with discipline and following through to the end of an endeavor so there are no loose ends. As you might’ve imagined, success in financial management and investing is the result of hard work.

Further, Mansi brings an important, female perspective to the organization. I cannot emphasize enough how important gender diversity is in this regard.

For example, I was moved by an essay she wrote on NJMom.com about her parents, both of whom went to medical school:

Today my dad is a surgeon, while my mom has put aside her medical ambitions to become a homemaker. Life takes over, just as it has for generations of women in the years preceding my mother’s story, and in similar fashion, my mom made sacrifices in order to pursue a different dream, that of raising a family. There’s nothing wrong with choosing family over professional ambition, but many women must make the sacrifice to put certain parts of their lives on hold in order to foster another. The problem with this story is that love does not equal respect.

My mother was very qualified, but she wasn’t given equal footing when it came to decision-making in the household. She truly believed that would never change. Then, one day my aunt suggested a simple trick to her: start managing the household finances.

After mild consideration, my mom suggested this idea to my dad. He was shocked. Although he didn’t shoot down the idea he didn’t exactly embrace it. The conversation was rocky at first, but it set the stage for what was to become a series of talks my parents held about their financial future. With each discussion, my mom became more confident about making financial decisions for the family. One simple change, managing our household’s finances, improved my mom’s standing in her world.

I love that Mansi is so bold and transparent about how money is power — whether in the financial world, in a marriage, a family.

It is brave, important work to call this out, and that she is helping to create tools to help manage this power imbalance is important work.

Related posts:

How to get started investing for women

Best savings accounts for single moms

11 steps to a rich life as a single mom

Credit tips if you’re divorcing or separated

 


Some of the links in this and other posts generate a commission. I never recommend products that I don’t truly believe in. Seriously – I get asked to write about stuff all the time and turn down hard cash if I’m not feeling it.


 

Women earn less than men, but also save and invest less — even though we are better investors (science proves) and need more money long-term. This female-founded robo-advisor says it will help families and women build wealth — with low fees. It's now easier than ever to start #investing!

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