Sallie Krawcheck talks about how women can compete at work on their own terms.

krawcheckbookcoverFormer Wall Street maven Sallie Krawcheck made headlines after being fired as the head of Citi’s wealth management unit in 2008, following jobs as CEO of Smith Barney and Sanford C. Bernstein. She experienced firsthand the challenges of being a female senior executive in the male-dominated financial services industry.

Today, Krawcheck wants to empower women as co-founder and CEO of Ellevest, a digital investment firm geared towards the female life experience, taking into account their salary fluctuations, risk preferences and longer lifespans. She also heads a female networking group called Ellevate. Krawcheck joined the Knowledge at Wharton Show on Sirius XM channel 111 to talk about her new book, “Own It: The Power of Women at Work.”

 An edited transcript of the conversation follows.

Knowledge at Wharton: People talk a lot about the gender pay gap, but they might not realize there’s a gender investing gap as well.

Sallie Krawcheck: There sure is. It’s funny, I’ve spent my entire career in investing, and I never really thought about this gap. Then, over the past couple of years, I had the “aha moment” that it’s not just the gender pay gap that causes women to retire with two-thirds the money of men — and that’s Caucasian women; for women of color or women with disabilities, the numbers are quite a bit less — … I learned that women also invest less than men do. The result can cost them hundreds of thousands of dollars — for some of them, millions of dollars — over the course of their lives.

Knowledge at Wharton: Is it a matter of deciding to invest or is it not having the money, or is it a little bit of both?

Krawcheck: In my opinion, the investing industry and Wall Street really are very male[-oriented] in nature. The financial advisors are 86% male. Their average age is late 50s, early 60s. And the language of the industry is male: It’s about beating the market, outperforming, picking the winners. It uses war and sports analogies. Investing TV — CNBC, which I adore — is like NFL Sunday. Even the industry symbol is a [charging] bull. … In every way, the industry screams male.

But [imprint of masculinity] is even more subtle than that. The focus of the industry is on making more money. Women tend to say, “OK, that’s cool, but what I really want to do is start a business, buy a home, retire well, not simply make more money.”

Knowledge at Wharton: You are an entrepreneur now, with your companies Ellevest and Ellevate Network. How is entrepreneurship helping to shift the landscape and increase the importance and the power that women have in the workplace?

Krawcheck: I think it is everything. Back in the day, if I wasn’t happy with how much money I was making, or I didn’t feel like the company that I was working for was treating me or women well — and that certainly was the case because, of course, I started at Salomon Brothers on Wall Street, which was hardly a people-friendly environment — I could go into my boss’s office, ask for a raise, he could say no, and I could go to another company with no information, or I could go home.

“Until we are financially equal with men, we will not be fully equal with men.”

Today, I can walk into that meeting with information from any of a number of sites — whether it’s, Comparably, Hired, etc. — so I know how much I should be making, within reason. If I don’t get paid as much I’d like to be, I can go to another company with lots of information from places like InHerSight or Glassdoor, etc., which will tell me about the culture and the parental-leave policies of a company.

Or, I can start my own business. The cost of starting businesses has come down dramatically over this last decade, even over the last five years. It used to be I’d have to build a plant, hire a workforce and advertise on one of the big three TV networks. Today, I can put up a website. I can host my information in the cloud. I can get the word out on social media. Everything has changed.

Knowledge at Wharton: Those are options that really just weren’t available 30 years ago. Just having that availability of information and that flexibility opens so many more doors.

Krawcheck: It changes the field of play dramatically. There’s a reason that women are starting businesses at two times the rate of men. And by the way, the No. 1 reason men start businesses is to make money. The No. 1 reason women start businesses is to build and work at the company for the meaning and purpose they can bring to that work. The No. 4 reason is money. So, women are saying, “This company doesn’t fit me, and it’s not meeting a need that I see out there, so I’m going to go out and meet that need my way.” It’s really very interesting.

Knowledge at Wharton: How much of a shift is already taking place to meet those particular needs? Because based on what you’re saying and what you lay out in the book, it sounds like we may be very early on in the process, with a long way to go to reach that point.

Krawcheck: Well, I think what we’re seeing is the force of feminism — which is really at the forefront for so many professional women today, given the election of last year, given the recognition that the advancement of women in business has stalled — the force of feminism is reawakening. And the forces of entrepreneurialism are combining with that right now, such that more women are seeing this as an option.

The venture capitalists don’t get it. Women continue in this day and age, if you can believe it, to get a single-digit percentage of venture capital dollars, despite the fact that research from First Round Capital — an outstanding venture capital firm — says that startups with women in a position of leadership have 63% better returns than those that are run by men only. Despite this, venture capital dollars are not flooding to women or to diverse teams.

We talked about the cost of technology coming down, the cost of advertising coming down, the cost of renting space. You can now use a WeWork [shared workspace] on a short-term basis. [Another factor is] the cost of business travel: You don’t have to do it; you can be on a video conference instead. The cost of having an HR department [can be avoided]: You can use Zenefits. The infrastructure is there, and there are more angel firms and funds that are investing behind women. Crowdfunding — women tend to outperform men on crowdfunding sites. So there are other ways that women are finding to fund these businesses that don’t rely on the traditional venture-capital route.

Knowledge at Wharton: You also bring up a couple of interesting points about the impact women can have on … spending and investment. … Data is starting to show up that the daughters of women who work are seeing greater incomes as well.

Krawcheck: That’s exactly right. So many women ask me, “What should I tell my daughter?” And the answer is, “It’s not what you tell her, it’s what you show her.” If she sees her mother going into the workforce every day, advocating for herself, negotiating for herself, that rubs off. Likewise, so many times I’m asked, “What should I tell my daughter about managing her money or investing?” And I say, “Just do it. You know, for her to see you on a Saturday afternoon working through your money, checking your accounts, etc., that goes a long, long way.”

“Put another way, 98% of women manage their money on their own at some point in their lives, and still, so many are ill-equipped to do it.”

Knowledge at Wharton: Be a role model.

Krawcheck: That’s exactly right. Some women will say, “Yeah, it’s too late for me. I should have invested years ago, duh. But, you know, my marriage is strong [and my husband will continue to provide for me].” I say, “Gosh, I hope so. Good luck with that.” Because of course, he will die before you will — men die sooner. But even if not for yourself, do it for your daughters. Because I’ll say something — it’s a little sparky, a little controversial — … women will not be equal with men until we are financially equal.

You feel more confident going into your boss’s office to ask for the new assignment, you feel better starting your new business,  — if you have more money. You feel better leaving a personal relationship where he or she was so terrific five years ago, but now is such a jerk if you have more money. Until we are financially equal with men, we will not be fully equal with men. And investing is a good part of it.

Knowledge at Wharton: I did want to touch on the impact of divorce. Obviously, we still have a very high divorce rate in this country, and that has to play into this financial inequality a bit.

Krawcheck: It’s tough, because when men and women divorce today, a man’s standard of living rises by a double-digit percentage, and the woman’s declines. There was a recent article, I think, on the subject in The New York Times. This is the reason that women continue to work well into their 60s and even their 70s. Some women work because they love it. Other women work because they have to.

The impact of divorce, the impact of the death of a spouse — because we live five, six, eight years longer than men — can be devastating. Put another way, 98% of women manage their money on their own at some point in their lives, and still, so many are ill-equipped to do it when that time comes. And when my husband is leaving me, or I’m leaving him, or he just passed away, that’s a very difficult time to try to figure out how to manage money.

Knowledge at Wharton: You had an experience when you were working on Wall Street during the time of the financial crisis, and you brought up the idea of giving money back to people that lost money. You got shot down, and didn’t even get to talk to your bosses about the idea. Obviously, when it happens, getting fired is not good for anybody – but it’s interesting to see how that story played out.

Krawcheck: Look, I would not have suggested we do it if I thought, “Hey, it’s one of those things. These folks bought equities. Everybody knows they can be risky. So be it.” These were actually products that we had sold through Smith Barney that were marketed as low risk. And nobody was trying to do evil. People made mistakes. But these products that were supposed to be low risk actually were high risk. They were supposed to go down [no more than] eight cents on the dollar. They went down close to 100 cents on the dollar.

So I thought, “OK, we’ve got one of two paths here. We can go down the typical path which is, ‘Oops, sorry’ — or not sorry, because the lawyers wouldn’t let us say it — and now the clients will sue us and be angry at us, and it will last for years and years, and the company will be impaired as a result of it. Or we can do the right thing, in my point of view, and say, ‘Hey, we messed up. The small print does say you could lose everything. So we’ll partially reimburse you. We’ll share the pain. And some of you will still be angry, but we’re trying to do the right thing here.’” And it was not well received at the company at the time.

“More diversity on Wall Street, more disagreement, more debating, more hashing out, more people of different races, more women … all of those things would have been good.”

By the way, I might have been wrong. But I wanted to have a robust debate around this. I eventually won the day because the board became involved and we did partially reimburse the clients. But given that my CEO was against this action, I lost my job.

Knowledge at Wharton: Probably a lot of people around the country wish more conversations like that had actually taken place.

Krawcheck: Well, that’s what I was going to say. I might have been wrong. But what is notable is I was the only executive to have partially reimbursed clients. I don’t think there’s any way we can argue that more of those conversations wouldn’t have been better. That was a double negative, but you get the point. We would all agree, more of those conversations would have been a good thing. But there were not that many of them.

And I would extend that comment then to say that more diversity on Wall Street, more disagreement, more debating, more hashing out, more people of different races, more women, more people who didn’t have Ivy League backgrounds, more people who were pessimists as opposed to optimists — all of those things would have been good. Indeed, that is the power of diversity. And Wall Street was not then, nor is it today, a diverse industry.

Knowledge at Wharton: You also talk a little bit about the fact that the word “failure” has negative connotations in many senses, but that at times, it also has to be a learning experience, a building experience.

Krawcheck: There’s a lot of conversation in business these days about how great failure is. And really, it may be out on the West Coast with all the startups, and maybe it really is a badge of honor there. But I think in most other places, failure is failure, and there’s still a sense of embarrassment around it. Particularly for us females, the research has shown that whereas gentlemen are able to externalize failure — “Well, it was the environment. Who could have been expected to be successful given this?” — as women, we internalize it. We tend to take it quite personally. We tend to be embarrassed by it.

My advice to everyone is, let me promise you something: Nobody cares as much as you do. And let me promise you something else: Nobody’s thinking about you as much as you are. … Make it part of your story: “This is why I failed, this is what I learned, this is how I’ve grown, this is why I’m better, this is the risk I took, this is how I would do it differently.”