Elle Kaplan grew up dreaming of becoming a doctor, or maybe a writer. But when a family tragedy left her mother consumed by her new financial responsibilities, it opened Kaplan’s eyes to the importance of financial literacy. She spent more than 10 years working on Wall Street — as a broker, investment banker, trader, and financial analyst — before starting her own asset management company.
She founded LexION Capital Management LLC with the goal of helping women like her mother, her mother’s friends, and every woman who ever felt confused or intimidated by money. “Economic power can change women’s lives,” she says. Here’s how it changed hers.
I grew up outside of Chicago as one of four kids. We were a pretty traditional family with a working father and a stay-at-home mom. When I was in college, my father fell into a deep coma. My mother was grief-stricken and overwhelmed, but particularly overwhelmed with the family finances. She was a genius but didn’t know anything about money or even where the savings, life insurance, and retirement accounts were. I desperately wanted to help her. As a college junior, I started to do research to find if there was a place where she could go for financial advice that was as safe as a doctor — somewhere that would do no harm. I found that no such place existed.
Looking at the way personal savings and investments were handled on Wall Street at the time, I discovered only one model: the brokerage model. Their job is to sell you something in the best interests of themselves, rather than in the client’s best interests. It’s like seeing a pharmaceutical rep instead of a doctor.
I had this dream to build a place to help her and women like her. As women, we are just as smart and as capable as men, but we do face unique challenges. Namely, we are paid less and we live longer. I found a gaping hole in the finance industry that I wanted to fill.
My career path was forever changed. I was an English and chemistry major at the University of Michigan, but I decided that when I finished college, I would move to New York City and get a job on Wall Street. I didn’t even know what Wall Street was or what that meant. But I was going to figure it out.
I was 22 years old, and I moved to New York with $200 in my pocket, which felt like a lot of money at first. I slept on the floor of a one-bedroom apartment in Westchester and I had to take the train in every day. It was $20 each way, which was a very significant expenditure. I started to do the math on everything. I knew a yogurt at the corner bodega would cost me $1.25 and it could serve as breakfast and lunch. I knew how many train rides I could afford before I needed to get a job.
Right away I began temping. I worked at a couple of media places and a couple of law firms doing administrative work — sitting in conference rooms answering phones, bringing coffee, sorting mail.
I applied to a lot of Wall Street firms, and I was rejected by a lot of Wall Street firms. They weren’t interviews and then rejections — it was just, “We’re not interested in meeting you” rejections that would come as form letters. Or if I followed up with a call, they would say, “We’ll keep your résumé on file.” This went on for months.
Courtesy of Elle Kaplan
Then I got my break. One of the headhunting agencies I signed up with offered to send me on jobs on Wall Street, which I thought might be my way in. I didn’t realize they would only be sending me on receptionist and administrative assistant jobs. I went back to them and said there must be some misunderstanding. I want to interview for professional jobs. The woman in charge said things like, “You need a major attitude adjustment,” “Come back when you have an MBA,” “No one is going to take you seriously,” “You can’t possibly think anyone will hire you?”
With that, I went off to my next interview to be a receptionist at a private equity firm. I was so broke that I bought a suit and I tucked the tags in just in case I needed to return it. The man I interviewed with saw my A average in chemistry and English, and he said that he thought I might be bored answering phones. There was a job opening as an analyst, and he offered it to me. The headhunter who scolded me on my attitude ended up making a much bigger commission because I got the higher-paying analyst job.
I was so broke that I bought a suit and I tucked the tags in just in case I needed to return it.
Wall Street titles are generic. An analyst is an entry-level professional investment-banking role where you do things like comparable analysis. For example, if one company were considering acquiring another company and they both manufactured candy, I would look at all of the comparable companies in the candy industry, come up with a process for them to price the acquisition, and supply as much research as possible. I was often terrified. I was a public-school gal surrounded by a lot of people with fancy degrees. I definitely felt like a fish out of water.
I was at that private equity firm for about three years when a bigger investment bank acquired them. I was then able to move into a role as a private banking associate. In this new job, I was part of a team that had an equity — another word for stock — portfolio for high-earning individuals. I would meet with clients on the phone as part of a team and discuss why we were investing in certain things and how it fit into their investments. There was a lot of learning what I think is a very confusing language — the language of Wall Street — and distilling it down so that it is understandable.
By now I felt I had developed skills and I was learning more every day — and I was no longer tucking in suit tags. It was a much more confident place. During my five years at the investment bank, I enrolled in the executive MBA program at Columbia University, which the company paid for in exchange for me working full time in addition to going to school full time.
Those were not fun years. It was so busy I remember feeling like if I couldn’t microwave food in 30 seconds or less, I couldn’t eat dinner. It meant really not having time to date or see my friends. It was a lot of sacrifice, but I really wanted that degree. And it was far and away the most responsible way to go to school because I didn’t have to incur any debt.
After I graduated with my MBA, I took a job on the trading floor with another bank. I traded commodities derivatives and fixed income in New York and London. I would work with clients — large institutions or even governments of different countries — and price the items they wanted to trade. I would price the transactions for them and then execute the financial details. There was a lot of pressure and stress. It’s fast-paced and very mathematical. My chemistry background has been very useful to me. Finance is very much about mathematical formulas.
I had to ask another guy to stop yelling out pejorative words that describe women every time he got upset.
The trading floor is the most intense place on Wall Street. What’s culturally acceptable doesn’t apply there. One guy who worked right next to me would get frustrated and take his keyboard and bash it against his desk. Or he would throw his phone so that it broke into tiny pieces. This is loud, disruptive, a little crazy, and frightening, and it’s happening a few feet away from my desk. All the guys would laugh, and then the aggressive guy would call IT and say, “My keyboard isn’t working.” It would just be replaced, no questions asked. I had to ask another guy to stop yelling out pejorative words that describe women every time he got upset. You don’t expect you’ll need to make these types of requests at work. I don’t think it will change until we get more women in finance.
I stayed on the trading floor for two years. Then I went back to private banking to become a financial advisor. Friends and coworkers mocked this move. To them, it seemed like a step back in a financial career. But it was deliberate. I wanted to learn the retail end of finance. I had learned private equity, how to trade, investment banking, and now I wanted to learn how it goes from the client experience. I also knew this job would be a predictable nine-to-five. I met with clients, helped them understand how to invest their money, and my day was over. I started building my company in all of my spare time.
To build a business that’s good enough for my mom, I had to leave behind a lot of the ways Wall Street does business. And this is hard. It would have been much easier to build a brokerage firm where you’re held to a lower standard. But I was committed to being a fiduciary firm. Fiduciary advisors are required by law to act in the best interests of their clients, whereas the same laws do not govern brokers.
Because New York finance was closed by the time I got home from my day job, I started calling firms in California to get some ideas. I would call up anyone who I thought might be helpful — bankers, business owners — and ask for their advice. I then called some of my mom’s friends to see what they would feel comfortable with in terms of investing. I felt I would rather take the long, slow, and deliberate route even if it meant working longer in Wall Street than I had intended. People trust you with their life savings. That’s a huge honor. I wanted to build something worthy of that honor.
During this time, I had two clients ask me to manage their family’s money. These were extremely wealthy families who could afford someone doing this for them. I said no. I didn’t want to take on any private clients until I had my business ready. A third client actually suggested that I start this business that I was very much already thinking of starting and he wanted to own a bit of it. I said, “No, thank you,” to the partnership, but I extended the offer to represent him once I started.
To me, money is the ability to have choices and freedom, and take care of family and causes you care about.
I knew I wanted to own this myself without the help of any bank or any male investor. I was in a position that I could afford to start the firm myself. To me, money is the ability to have choices and freedom, and take care of family and causes you care about. And it’s about options. I invested very well and was now reinvesting in myself.
The first thing I did was build a website, name the company LexION Capital Management, and put everything together from my apartment. I hired a team of administrative help, a web and brand designer, and advisors. After working on it for two years, it was time to quit my job. It wasn’t anything dramatic. I had so much on my mind that it was another thing on my to-do list that day. It’s standard practice on Wall Street that when you give notice for your job, you are escorted out that day. I was finally on my own.
In October 2010, I opened LexION. I invited those three private clients who approached me before to join as well as a select few others. I sent out emails one afternoon and got responses within 28 seconds. Everyone I invited to join joined. I had the reverse curse. I had to staff up and stop accepting clients because it was happening so fast.
I guess I told everyone I knew that I was looking for employees because people showed up. I hired subject-matter experts who analyzed the market from a mathematical standpoint and various support staff as I needed them. I kept a waiting list of people who were interested in becoming my clients. The following summer, in September 2011, I moved the business from my apartment to an office and took on more clients. I’ve had people knocking at my door ever since. I will expand as much as I can to help as many people as I can.
When we started, the minimum investment for clients was $1 million. But my goal was to help my mom, my mom’s friends, and other women. For most Americans, $1 million in savings is impossible. So I decided to lower the standard to $100,000. Historically, only the largest pools of money have been managed this way. I want to disrupt the industry by offering this attainable standard. Every client is someone’s mom or best friend of [a] sister or family member. I have male clients as well, who often come in as part of a family led by a matriarch. We end up helping generations of the same family. They trust us, and I give every client the same level of care whether they are investing $100,000 or $10 million.
Clients come to us, and we get to know their goals. Do they want to save for their kids’ college, for retirement, or do they want to take one really glamorous vacation every year? Then we manage their money on their behalf while they go off and live their lives.
When you’re the CEO, you wear every single hat in the company. I do everything from acting as the company’s spokesperson to emptying the trash. I still meet every client.
My greatest joy is helping my clients. The biggest challenge is already behind me. Taking the time to build my business the right way was difficult at times but worth it. I tell young women all the time to remember that every overnight success story is 10 years of hard work in the making.
I hope to stay on as CEO as LexION and grow it. I want us to become a huge firm that is a household name. We really want to change what all Americans expect from the asset management industry. I also think it’s important to represent women in finance at this level. There is definitely a glass ceiling on Wall Street. There are plenty of women in support roles, but I was often alone as a banker. It bothers me immensely. We are hearing a rallying cry for STEM, which I think is important. But I want there to be a rallying cry for women in finance. Finances have such important implications in every aspect of a woman’s life.
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