Full transcript: Ellevest CEO Sallie Krawcheck on Recode Decode

On a recent episode of Recode Decode, Ellevest CEO and co-founder Sallie Krawcheck told Recode’s Kara Swisher that she’s trying to fix Wall Street’s long-running ignorance of women.

You can read some of the highlights from their discussion at that link, or listen to it in the audio player above. Below, we’ve posted a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on iTunes, Google Play Music, TuneIn and Stitcher.

Transcript by Celia Fogel.

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Kara Swisher: Today in the red chair is Sallie Krawcheck, the CEO and co-founder of Ellevest, which offers investment solutions for women. Ellevest argues that women approach investing differently and that other firms cater only to men — no surprise. Sallie knows a lot about that, having previously worked at Citi and Merrill Lynch, and since May 2013 has been chairman of Ellevate, a professional network for women. Sallie, welcome to the show.

Sallie Krawcheck: Thank you Kara. Thanks for having me.

Oh, I'm thrilled to have you here actually. We met at Sheryl Sandberg's house. We were at a power lady thing.

I remember that. A few years ago.

Yeah. That's Ladyfest, as I call it. And you had come and talked there and talked about various things. Let's start with your history because you had quite a career on Wall Street. One of the few most prominent women, bankers essentially. Talk a little bit about what you've done and how you got to where you are.

Yeah, so my background is I spent, I guess it's decades, on Wall Street. Investment banker in the early days, hated it. Research analyst in my younger days, loved it. CEO of Sanford Bernstein. And then I ran Smith Barney, so I was the CEO of Smith Barney, the chief financial officer of Citigroup and then eventually the CEO of Merrill Lynch Wealth Management. So I've been around!

So you're a unicorn. Yes, you've been around. But these are high ranking positions.

I think I'm a unicorn dancing on a rainbow actually.

[laughs] Probably. Exactly. So talk about that experience. I mean you hated it but you were there …

Oh, no, no, no, I loved it! I hated being a junior investment banker. I loved the research business, the wealth management business. I mean I wouldn't have stayed so long if I didn't.

Talk about your experience there. So you had the very traditional coming up on Wall Street essentially.

I guess traditional, but not for many women. So very quickly. In fact, you know, Kara, I was telling my daughter this past week that it was about the age of 24 when I looked around and realized I was the most senior woman banker at the company in the city I was working in. So it was traditional in some ways, untraditional in others, because there were so few women. And look, it was a great opportunity to be in some senior roles that lots of folks don't get to do.

Why did you succeed, would you say? Given the paucity of women.

Well, I think super hard work. Luck and being smart enough or fortunate enough to be in jobs in which results mattered and were quantifiable. So as a research analyst, it wasn't, hey, you were part of a team of 10 people and then you sort of politic your way to get promoted; it's a research analyst, where your stock recommendations are good or bad. Also I made a very significant bet mid-career when I was running Sanford Bernstein that I got us out of the investment banking business. We were a research business, we were also in investment banking; there's a fundamental conflict between those two businesses.

Wall Street doesn't seem to mind that conflict.

Well, at the time I said, "Look, we can't do both of these jobs well." Serve the research investor and serve the corporate client. And so I took us out of the corporate business, lost millions of dollars, lost lots of analysts, and people told us we were dead wrong, and lo and behold, a few years later, in comes Elliott Spitzer, recognizes and reveals these conflicts of interest — the first time emails were used to prove these things — and Sanford Bernstein was the one. So our business soared and then Sandy Weill came to me and said, "We've got this problem at Smith Barney, come run Smith Barney for us." I said, "I beg your pardon? I'm sorry, I'm running 386 people, you want me to run 25,000, 30,000 people?" But it worked.

So your career on Wall Street ... talk about how it ended, because it's a really interesting story.

Yeah, so I got fired. Yeah, that happened. And was running Smith Barney into the financial crisis. I was running Smith Barney. We mis-sold investment products to clients. They were supposed to be low-risk; we thought they were. They were high-risk. They were supposed to lose eight cents on the dollar, they lost about 100. And I went to my then-new CEO of CItigroup and said I think we should partially reimburse clients. He said no, I said yes. He said no, I said yes. It went to the board. The board sided with me. And as happens, I don't have to tell you in these kind of debates when you go up against your boss at the board, I was fired.

Though you were right.

I think I was right. I certainly can see his point of view. "Jeez, you know, this quarter’s very important. If we start returning money now, other people will want to get their money back." I can see his point of view. I think I was right, and I thought I was right enough that I was willing to be fired for it.

And why did you think that? Why did you ... because a lot of people would just gloss over, just let it pass.

We did wrong. We did stupid, is what I should say. We ... you know I spent a lot of time saying …

Some people think wrong.

But I actually spent a lot of time, Kara, researching. I mean tens if not hundreds of hours. Was there an evildoer here? Did somebody do this to make extra money and hoodwink the little guy? I never found anything.

Well, is willful ignorance the same thing?

Well, sometimes you're just dumb, sometimes you just miss stuff. And I said, "Look, we were dumb, we should have been smarter, our clients paid us for being smarter. So let's partially reimburse them." You know, as time has passed I've come to the point of view, it's a relationship focus that I had as well as a longterm perspective on the business, which on Wall Street and in some publically traded companies is simply missing.

And even if the board sided with you, why did you have to be the one to get fired? Just because you went up against the CEO?

I know, and I'll tell you the truth, every once in a while now I'll run into a former member of the board. And they will say to me something — and it actually happened as recently as about six weeks ago — and they'll say, "You know, Sallie, sorry." [laughs] Okay! Okay! All right! I loved my job! I guess that's better than a sharp stick in the eye.

But not as good as a cup of coffee from Starbucks.

Yeah, exactly.

So talk about the way Wall Street thought about finance then. It's changed very drastically.

In terms of?

Everything. Or do you think it hasn't changed?

I don't think it has.

Because why?

I think the thing that's changed is the investment banks, the large banks, now have more capital so they're less leveraged than they were. But they're still highly leveraged. They're still one of the most highly leveraged industries out there. And I don't think we have a clue as to whether they will survive the next downturn better than the last downturn.

Right. Do you note any feelings of change on Wall Street? Given digital changes, given, you know, FiTech and all kinds of things. Or do you feel they still operate in the same way?

Well I've been out of …

We're going to get to what you're doing now.

Yeah, so I've been out of it for a bit. Everybody talks about the importance of innovation. I mean how can you not? It is extremely difficult to innovate within those large institutions.

Because?

Because how many of the young engineers who are working at a hot startup on your side of the country secretly really, really want to be working at a several-hundred-thousand-person bank? Like nobody.

Zero.

Right?

So there's a lot of technology involved.

There's a lot of technology, but it's mostly business as usual, and some folks are innovating but a lot of the great minds want to do the startups themselves. The only thing I'd say is a lot of the processes kill innovation. I saw it happen again and again and again. "We're going to report earnings this quarter, what can we cut?" Well, look, there's this team over here trying to innovate, get rid of them, okay? I mean we've lost a lot of talent on Wall Street over in the large banks over the past decade. So you've seen a talent drain. So the combination of all that and that march of quarterly earnings. I was there. I was at the big banks, and they said, "Well, now let's innovate." And people go, "Uhhh."

What does innovate mean to you, from a digital point of view, at banks?

Well, it's the ... I mean, hell, it's just getting rid of some of the underbrush that gets in the way of serving customers and clients well. I mean have you gotten a mortgage lately?

Yes.

Yeah.

It was a pain in the ass.

Right. Exactly. And so what you can see as startups come in with a fundamentally different perspective on these things and a completely fresh look on them, it's hard for banks to …

SoFi and other …

Yeah. And the regulators. I mean the regulators are leaning over into banks in a way that they aren't yet with some of the startups.

Do they have a sense of it? When you were there did they see the internet changes? Did they see what was coming? Because there are not a lot of financially oriented companies that are moving into the regulatory space.

What I would say is they certainly see it coming. What you're seeing a number of the large institutions do, which I think can make sense, is they're investing in some of the startups. They're saying — and they've done this for any number of years — where they say, "We hope we can do this inside; we're not sure that we can, so we'll invest in any number of these to get a seat at the table, to be early in, to sort of hedge our bets." And you've seen companies like Goldman do that for a long time, where they place a whole bunch of little bets and it's really not that much money for them to get that seat at the table, and I think that can make a lot of sense.

Do you see it changing rather drastically at all?

Well, I've been out of them for a few years so …

Right. But you're a smart observer of how they operate. Do you feel like it's sort of like health care, it's just going to continue the same way and not be impacted?

I think it's hard to change.

Let's talk about what you're doing at Ellevest and Ellevate. It's interesting, you having been one of the few woman investment bankers, you had up close how they think about it. It is similar to health care. Things are branded around men, and banking is oriented around men.

Yup.

And talk about what you're doing now. Talk first about Ellevate itself. It's a network for women.

Yeah, so Ellevate is the old 85 Broads. It's a global professional women's network.

85 Broads was the original.

It was the original one, which is the informal Goldman Sachs women's alumni network. Sort of a cheeky name.

There were 85 of them?

No, it was the takeoff on the headquarters. 85 Broad Street. They've long moved from there. And so that's something I bought a handful of years ago based on the insight that networking is the number one unwritten rule of success in business. Men tend to do it better and earlier than women do. And if I wanted to help women get ahead. This was a way by bringing them together.

So you had 85 Broads and you changed it to Ellevate. And explain what they do. What do they actually do?

They come together both online and in in-person events, share ideas, share connections, share job opportunities, share young people who want to get together, hear from speakers who motivate them, teach them, inspire them, both online and in person. So it's, you know, some people say it's a LinkedIn for women.

There's a lot of groups like this. Sheryl obviously has her Lean In things; there's a younger Levo-something.

Levo League. Exactly.

Stuff like that. Why are these important? Talk a little bit about them. Because they do them a lot in Silicon Valley. It actually happens I was just at an Aileen Lee venture capitalist ladies thing.

Yeah! She's doing a great job. It's important because getting women ahead in business is important. And before everybody turns off the podcast and says, "Oh, here we go," you know the research. Well, first of all, it started when I was on Wall Street, which was very male going into the crisis and was even more male coming out of the crisis, and I don't think there's anyone who can say, "You know, if there'd been more women on those trading floors..."

Iceland, right? Iceland is the example.

That's exactly right. But imagine it. These trading floors are just a sea of guys and that if there's more diversity, what has been shown is that businesses have lower risk, businesses tend to earn higher returns, businesses have more innovation. It's diversity of all kinds, gender diversity one of them. And having lived through the searing experience and the searing pain of the financial crisis and having the industry come through less diverse, this is a potential solution.

I think if I recall, research is that men tend to take more ridiculous risk.

You know it. And they egg each other on. And there's a correlation between testosterone and risk-taking. So bringing women in can settle things down. Just by the way, if you have too many women, that bringing some guys in can rev things up a bit. Diversity is the goal here.

And so you get together and have speeches and things like that. And Ellevest is separate from this.

And network, and what our results are showing is that women tend to get ahead when they have this strong network. Ellevest — sort of similar names, completely different concept, but both are around closing these gender gaps. Ellevest is a digital investment platform targeted to women. "Well Sallie! We don't need one of those, look at all these other digital investment platforms!" And then we sometimes we hear, "How dare you patronize me; women don't need their own thing." Well, back up. There's a gender investing gap in this country. Women don't invest to the same extent that men do. This can cost women, some women …

What are women doing with their money?

Keeping it in the bank.

Well, they have less.

Well, they have less of it, but a lot of folks will say that until we solve the gender pay gap, forget about the gender investing gap. That's like saying I broke my arm and I broke my leg — until I can fix my leg, I'll let my arm dangle. Both of these are important and the gender investing gap costs some women more. And it can cost women. If you're making $85,000 a year, putting aside 20 percent a year in the bank instead of investing it, it can cost you a million and a half, two million or more over the course of your life. These numbers are big. Big.

So you're bring up a group ... so address the concerns. Why do we need a separate women's investment?

Well, first of all because what's out there isn't working. Now one hypothesis as to why it's not working is, go back to my old industry, the advisers who worked for me, Merrill Lynch, Smith Barney, 85 percent male. If the adviser and the client, the male client, don't die in any given year, the attrition rate is less than 2 percent. In the year after the husband's death, the women's attrition rate is 70 percent or more. Or more. Women say the industry doesn't speak to them, can be condescending to them, doesn't understand their needs. Women say ... you know, women are sitting back in their chairs and it's costing them a fortune.

It's interesting, I agree with you. I have some financial advisers that were lecturing me about tech recently.

What?

I know, I just let them do it.

That's called mansplaining, Kara!

They were trying to be smart, they were very nice.

Mansplaining!

In a way, I just ... I was sort of like that's incorrect, that's inaccurate, that's incorrect. I'm pretty okay on this stuff. It was really interesting. But then how do you differentiate then when you're doing investment? So it's an online product. Explain the product.

Online product. So think of it ... you can think of it as a Wealthfront or Betterment targeted to women.

There's all these new online tools.

Exactly. We did hundreds of hours of research because I went in thinking, oh, look at me. I'm a woman, I ran Merrill Lynch, I got this. But some of my presuppositions ... is that a word? My expectations going in were wrong. For example, I thought women must have emotional blockages around money. Gender bias alert: No. What women told us is, we don't tend to think the way Wall Street thinks. This idea of earning and investing money to have more money leaves me cold. Outperforming the market leaves me cold. Picking the best manager, uh-uh. Really what I want my money to do for me, help me figure out how much my goals are going to cost and then help me invest to get there. That's what I want to do. Talk to me also about things like the fact that my career break can cost me more than a million dollars, I think it's a couple hundred thousand, but a couple-year career break has an ongoing drag through the course of your life. Other things that are super important: Take into account in my investing and my planning that I live longer than men. Oooh, that matters in an investing plan. That my salary peaks sooner than men's; oooh, hey, that matters too. And that my risk awareness is such that I want you to get me to where I'm going in the majority markets. So it's really, Kara, a fundamentally different way of approaching investing in addition to content and advice around issues that the Street overall or the industry overall just isn’t talking to.

Which would be what? What would be around these ... career breaks.

Again it's the career break. The financial cost of having a child, for example. What was interesting is that when folks go into it, some people say "Fantastic, love the for-women idea." Some people say, "How dare you? How dare you dumb this down." What's interesting so far is no one has said, "You know what? I'll bet this is smarter." And we believe we've got the smartest financial planning and investing algorithm out there right now. And so we're sort of aiming to change the way people think about the gender issue.

Talk a little bit about that. About the digital part of it. Because everything now in investment is digital. Everyone invests digitally.

No they don't.

Well, they go to their partners, right? They go to their storefront or else if they're wealthier they have private bankers.

Yeah, but there are still a lot of individuals who are investing for individuals.

Right, right.

I mean think about Merrill Lynch, Morgan Stanley, UBS.

Either they’re retail operations or they're for the very wealthy.

That's right.

I'm sorry I misspoke. What I meant is more and more young people are using Betterment and some of these tools.

They are. And I think these have a long, long way to go. I think it's a better way of investing.

Let's talk about your product. What does your product ... your product is all online?

It is all online. It really is an experience that we take her through in which she tells us a bit about herself. "My name is Kara, I'm 32 years old, I make $85,000 a year, I live in this ZIP code, I have a college degree," or whatever. And then you tell us, "Here's what I want to achieve. I want to buy a house, I want to start a business, I want to retire well, I want to have a baby." We calculate what we forecast is the cost of doing those things. You take a look at that and you say, "That's very interesting. You know what? I'll buy the house later because I want to have the baby sooner. I will retire a little bit later with less money because ..." whatever. You make these trade-offs. Very powerful technology that enables you to do that. The earliest set of digital advisers would say, "Now pick one of five management DTF portfolios." We put together a customized, completely customized, investment portfolio whose target is to get you to that goal or better in 70 percent of market environments. Why not 100 percent? Because that's saving, not investing. We then track you there and if you fall off track, you didn't make the monthly deposit, the market cracked more than we thought it would, we reach out to you and say, "Kara, you're off track for your retirement goal. Invest another $1,000 or retire six months later," or whatever those things are.

So how used to people are using these? Because you made your career getting people to use face-to-face investing, essentially. And again, whether it's wealthy people having the special rooms with the extra sodas and lovely furniture or it's just a storefront thing in a mall or things like that. How do you get people to turn to an online version of it?

I'm so glad you asked because not only did everyone say women in particular need face-to-face, the women told us they needed face-to-face. Now keep in mind what's out there isn't working for them right now. There's a gender investing gap. What we're finding is they were using the old model of what investing is. So women ... men will invest through jargon and complexity. Women will not. And so the women are going and thinking, "All right, you're going to use the word basis point, we're going to talk about alpha, you're going to ask me to choose between a large kept-value mutual fund and a small cap growth ETF, I need a person." When instead we said to her, "That's our job, we're fiduciary. We will choose the right investment for you, we had this experience doing it" — decades, I'm sorry to tell you, because that means I'm old and my chief investment officer has got years on her. That's our job. And we'll even tell you how much risk. You're not going to tell us how much risk you think you can take. We're going to let you know how much risk you can afford to take to get to your goals or better in 70 percent of markets. The only thing you, Kara, have to do is do you want a house that's more or less expensive and when? Do you want to have two kids? Do you want to retire here?

So you're doing it in real terms.

And so these are things she can control, and so what we're seeing, they tell us they need a person until they get in and then we see them go through, make these trade-offs. We're seeing a pop in traffic on nights and long weekends. What? The industry is not open nights and on the weekends. When she's got the glass of chardonnay and saying, "What if I do this? What if I change this?" So it's early days but this whole idea of "I need a person" is based on how the industry was, not where it's going.

Which wasn't good.

Terrible.

Let's talk a little bit about the broader financial picture for people, because there's so many more companies - there's FiTech and SoFi and whole bunches of them trying different things. How do you assess the market? Because this is one you're in now and you're trying to get people to change their behaviors.

Yeah, yeah. So I just think it's amazing what's happening and what's occurring that so many of these companies are approaching different parts of the business with a goal of bringing down pricing, using technology to bring that down and give the benefit of that to the clients and customers, clarifying what had been opaque business practices, sales processes, jargon, etc.

Well, it's purposely so. Isn't it purposely opaque?

You know, it's an interesting question, Kara. Yes and no. Yes and no. I was there for a long time, we never went into the "let's make this super complicated for everybody." But I think we all sort of like being the smart one, right? Do doctors really like pre-WebMD, when they were the expert? I think people like being the experts. And so the combination of being the experts, being able to charge some good money for it, and maybe not having to work all night and all weekend was not a really bad thing.

So how do you look at it? Do you think this is an area that is finally going to get disrupted? Again, things have fallen slower than in other parts of digital. You know, shopping, it's over pretty much. And food, it's moving that way, food delivery. All kinds of areas of entertainment for sure.

So some of the stuff is going to move more slowly because if you're an existing—- we talked about this a little earlier — if you're an existing client of an established wealth management firm, you know, and you're a 60-year-old guy and you've got plenty of money, why? Right? Why would you change? You're playing golf with your buddy, things are going well, you're feeling pretty well taken care of. I mentioned earlier the attrition rate is less than 2 percent. That's going to have to die off. It's going to die off. I actually was with the CEO of one wealth management firm — it wasn't one of the huge ones but it was a big one — who said they have more financial advisers over the age of 80 than under the age of 30.

Wow, wow.

Wow, right? So that business is going to slowly sort of ebb away. You've then got to bring in the millennials who have money but not a ton of money, and we hope bring women in too. So you really need to bring in these new client bases to take over from the existing client base of the industry.

Who are used to using Tinder, who are used to using everything digitally.

Who want everything online at the point in time when they want them to be delivered to them and a way that really speaks their language. But their parents aren't dying for it yet. The parents still have the money.

So how do you shift? So where are most of your clients now? Where are you getting them from?

A lot of social, a lot of content, some PR. Women hearing about it. A lot of referrals. Women talking to their friends about things. It's early days for us. They tend to be women who have agency over their own money. So it's not the women who's inherited a lot of money, but women who are sort of frankly bad asses in most parts of their lives but haven't figured out the investing thing, both married and single. So women who are married but who got their own money are coming to Ellevest, as well as the single professionals.

And how do you get them? You know, I can see them saying, "Why are you pandering to me? Why can't I just be with the big boys?"

Right. And they do that up until we say, "We take into account your longer life, we take into account the fact that your salary peaks earlier." I mean these things matter tremendously. You do these things wrong, you're out of money. And what we're also doing on the site is we're talking to them in their own language. The industry talks to them again through a lot of jargon and a lot of complexity and has a goal for them of picking this investment. And the women, they try to watch CNBC and they're like, "You know, it's a friggin' sports channel." They look at the brand of the industry. Kara! It's a bull! It's a phallic symbol! Not a single woman has ever said to me, "You know, Sallie, the brand just speaks to me. You know, I see the bull and I think investing." They see the bull, they think lots of things; it's not investing. And so we really are the ones and it's …

What's your symbol?

We have a little Ellevest insignia. It sort of looks like a designer's insignia.

Okay, all right.

By the woman who designed our site.

It's not like a swan or something.

No, no, no, no. Beyonce, that's our symbol! But the woman who designed our site led the redesign of Vogue.com. So what I went around for a long time saying is, "What if Tory Burch met Merrill Lynch's grandchild." If we combined the financial services, the financial service experience ... I say grandchild because Merrill's been around for so long, but a more modern view of that with a woman's aesthetic, a woman's eye. Do not dumb it down at all but do not use jargon — what would it look like? And it looks like Ellevest.

So when you're thinking about where investment is going, you've got to be thinking about how it's delivered. So right now you have a website; obviously you need to have a mobile experience. How do you imagine the millennials thinking about this? Because it is a mentality of using everything … again from Uber to Tinder to ... there's nothing that's not digital.

And we're seeing that. We're absolutely seeing that. We've got responsive design in building the site so at any point I look in and, "Oh look! It's more people on mobile. Nope! Now here comes the iPad, it's coming in strong. Nope! People on their desktops." I've hypothesized, and we're seeing this, when they're putting together their full financial plan, they typically are sitting at home, giving it real thought. Saturday afternoon types of things. But we're seeing them check in on it from all kinds of places at all kinds of times.

And who do you imagine your competitors are at this point?

It's everybody and really nobody. When you talk to her, of course we call her "Elle"...

Can men use your service?

Yes! Yes! They can! And when they do, and they put in that they're a man, Kara, we have them die sooner and we have them earn more.

[laughs]

I don't know if that's good or bad.

You kill them off. Sorry, algorithmically you're dead.

But at one point, you know, we said, "Well, maybe we shouldn't just be for women." And then we said, "Wait, wait, wait, wait." We're happy to be for everybody but without meaning to, the whole industry's talking to him, we should be the ones who are talking to her. And if she brings him along — and we had in testing and it was pretty funny — we had in testing that moment, right, where someone's testing and they're like, "Honey? You know, are we good for retirement?" And he says, "Oh, I'm watching Cramer and we're going to short this and we'll long this." And she's like, "Okay, but are we good for retirement?" And he said, "Well, you know, and then large cap value" and she's like, "Oh, I'll friggin do this too if it's a language that we can all understand." So it tends to be mostly women so far. But we certainly ... we've got some smart guys.

I want to finish up talking a little bit about the broader financial picture in this country. Obviously we're in the middle of a really ugly presidential election. There's all kinds of issues around the economy. Whether you get it online or offline, can you talk a little bit about where you see the economy? It's something you thought about a lot.

You know, it's interesting because through these businesses that I'm involved in, I keep hearing how bad the economy is. And there are swaths of people who've been dislocated by changes in the economy. And we need as a country to retrain these folks and get these folks back involved in the economy. I'll tell you on a day-to-day basis, the economy doesn't feel as bad from what I'm seeing through my businesses as what I see on CNBC. People are doing business today. I think we do have something that's looming for us as a country that I think about a lot, and to get back to the gender angle, we have this retirement savings crisis which is $13 trillion in size, which is going to bear down on us at some point. And part of the reason that I've gotten involved in …

Explain that for people.

Well, people just haven't saved enough for retirement. And they're going to outlive their money.

And Social Security certainly isn't going to …

Oh my! It's going to be gone at some point. And I had this insight a couple years ago ... I was putting on some mascara one morning, I said, "Son of a gun!"

Did you actually say "son of a gun"?

No, I did.

Very few people say "son of a gun" these days.

Okay, "son of a bitch," but in case my parents listen to this, but "son of a bitch, the retirement savings crisis is a woman's crisis!" Because we live longer than men; 80 percent of nursing home residents are women, or 85 percent, and we retire with two-thirds the money of men. And so once we begin to look at the crisis in that way, the solutions are less about tax increases and entitlement cuts, and things like, as we've talked about today, closing the gender investing gap. But also such things as having a mandated parental leave — that if we do that for women, they tend to return to work more quickly, saves companies money in the first year, research is now showing, and it has us save more in Social Security and 401k for retirement. So I've started to really think about there's some solutions to intractable problems, if we look at them in a different way, that can be a path forward for the country. But it always feels weird to put a gender lens on things.

But it is. If you think about it, the retirement issues going forward as the baby boomers age, it's really the great enormous group of baby boomers. What else? Trade? Right now trade is in the news.

Yeah.

Now nobody's for trade anymore.

I know.

Bad for the economy I think.

Yeah.

Good for politics. Bad for the economy.

You know it's hard because the benefits of trade are spread out amongst all of us and it's dollars. But if you are that individual who lost their job because of a trade agreement, it's your whole life. And so the fact that you go to buy something at the store and it costs you a few dollars less, you don't really feel that. If that is reversed, of course, that will be a big brake on the economy, very negative on the economy, but it's hard to get as whipped up about the few bucks you're saving as it is about the guy who has lost his job.

And lastly, you know after the crisis — you lived through that crisis and that's the thing that got you fired because you were trying to do right by people — are we in that vulnerable position again? What lessons did you learn from that? I ask everyone I have here, what mistake did you make. I'm sure there's plenty. Women always come up with mistakes.

So many. So many. Like my first husband. What a mistake. I gotta tell you, Kara, what a mistake! What a mistake. So besides him …

TMI.

I know, sorry about that. I ask this actually to everybody I worked with during the crisis. The truth is we may or may not be setting ourselves up for another crisis and will never see it coming. There's this concept called creeping determinism which is, gosh, the crisis was so obvious. I was there. It wasn't so obvious that it was occurring in sub-prime. In fact, I can tell you the company at which I worked, we thought there was a bubble and it was China and we were actively preparing for when China imploded. It would be XYZ. By definition ... these crises almost by definition are something you don't see coming — otherwise you'd be prepared for it. This time it was not Brexit, it doesn't appear, but next time it will be something like that. And so therefore having these large institutions have more capital is really the only answer. And they're still pretty highly leveraged.

Right. And last question — I do ask this to every speaker because you're an entrepreneur now; I would dub you an entrepreneur. What piece of advice would you give entrepreneurs? You know, you've changed your career rather drastically.

Oh my gosh, I think I'm trying to have every professional experience.

You used to be town cars and suits.

Oh, honey! Honey! Look at the jeans right here.

I know, but you still have the blazer.

Well, actually because I have a meeting in midtown, that is the only reason that I do.

I think you can't help yourself.

You know, entrepreneur, you just have to care. You have to be so passionate about this. You have to feel the way you felt me feel when we were talking about Ellevest earlier. Because I'll tell you, and I alone can say this, being an entrepreneur is harder than running Merrill Lynch. Only I can say that. The only time in my career I've lost sleep, wake up 3:30 in the morning and you know you're not going back to sleep, is when I've been an entrepreneur. Even in the financial crisis. Even in the financial crisis because I had such a team around me, you just felt like all of us together are going to figure this out. You know, as an entrepreneur you put your reputation on the line, you put your standard of living on the line, you put your family on the line, you put it on the line. And whereas I could make plenty of mistakes running Merrill Lynch ... I mean, hell, we had a couple billion dollars of cash flow! You've got two or three in you at best as an entrepreneur and I always say, "We're trying to create something out of dirt."

Right. So speaking of dirt, what is one mistake that you made that you corrected or is there something you've done that wish you hadn't?

Yeah. I went into this with embedded views of what women wanted that were built up over time by spending lots of time with men. And so one example is that I —I touched on this earlier — I really thought that women's blockages for investing was the fact that they had emotional things they had to work through. I mean how how male does this sound? And so I actually spent real money for a user journey that would help them identify their emotional blockages and get through them. And you know what the women did? In the hundreds of hours of research we did, but it only took a few to figure this out, they flipped me the bird. And they said, "I might have emotional issues around money, but I am so not interested in exploring this. What I want you to do is get me to the goal." And so we had an outside firm we were working with, we fired them. We just said, "Okay, keep on." And we really let the women lead us to it. And what's so interesting, Kara, I email personally everybody who registers. After they have the chance to go through the experience, Kara, I'm not getting "hey, what's the feedback," I'm not getting two lines, I'm not getting ignored — I'm getting paragraphs. I mean I was on the way over here, 12 paragraphs from a woman because they understand this gap, this investing gap, they understand what's out there doesn't work for them, and they truly want to be part of something that can make things better for themselves and for other women. It's really remarkable what's happening. If you're open to it.

Well, this is fascinating. Sallie, it was great talking to you, thanks for coming by.

This article originally appeared on Recode.net.