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In this Pearler App review I will discuss the fees involved with investing through Pearler, the cool features such as Pealer’s free ETF invest functionality and auto-invest feature. I will also highlight their educational content and desire to help users reach Financial Independence. I hope you enjoy this Pearler review.
What is Pearler?
Pearler App is an investing platform designed to be different from the start. Founded in Sydney by three mates wanting to reach FIRE, Pearler offers free ETF investing, auto-invest features, community investing and a quality educational platform for investors.
Pearler’s aim from the start was to provide an easy to use, long-term wealth building platform for its users. Rather than focus on the usual stock trading features most investing platforms have.
When heading over to the Pearler app you will notice a distinct lack of charts and candlesticks showing the price of stocks. I like the approach that Pearler has taken with this as it encourages you to invest based on your strategy rather than being influenced by a chart.
You will also notice a community and “finfluencer” presence, to help show how other users are investing through the platform. I will go further into this feature later on, but the transparency of the platform and its community is very refreshing.
What is FIRE?
For those reading that haven’t heard the term FIRE before, it stands for Financial Independence Retire Early.
It is a movement for people to take control of their finances through budgeting, investing and living frugally. With the goal being they can retire from their jobs significantly faster than at retirement age of 67.
There are many different types of FIRE, and I will have to do a post on this later. However for this Pearler review it hopefully provides context around who the platform is trying to help and why.
How Does Pearler Work?
Pearler, like a majority of other Australian Financial technology companies operates as an authorised representative of Sanlam Private Wealth Pty Ltd, who holds an Australian Financial Services Licence.
Under this licence Pearler is able to provide its online brokerage platform for listed securities and managed funds. You can read more about their responsibilities and requirements from their Financial Services Guide.
Pearler is an online investing platform that provides CHESS sponsored investments for $9.50, as well as an auto-invest feature and free ETF invest features too.
Their CHESS sponsored investments mean that each time you buy or sell a share it is recorded via the Australian Stock Exchange and reflected on your HIN (Holder Identification Number).
CHESS sponsorship means at all times the underlying shares are registered in your name. Whereas with custodian platforms like Stake, the underlying shares are in the name of the custodian, with you as the legal rightsholder of those shares.
They each have their pros and cons, but CHESS sponsorship has a price to pay for the extra layer of security it offers shareholders. That is why most CHESS sponsored platforms have a brokerage fee while custodian platforms don’t.
Pearler App enables its users to invest in both Australian and US equities as well as ETFs for a low cost fee of $9.50. It is important to note that the brokerage free ETF options are only for a select few Australian ETFs, not US listed ETFs.
As mentioned previously Pearler fees are a flat $9.50 for all trades. Pearler also offers free ETF purchases currently on 44 ETF investment options.
They have partnered up with ETF managers EInvest and VanEck to provide these options to their investors. These free ETF investment options do have some caveats which I will discuss below.
They clearly show that these ETFs will be brokerage free, provided you buy and hold the investment for more than 12months. If you sell part or all of your investment within 12 months, then you will be charged the brokerage for both buying and selling.
This arrangement is clearly a great way to get users to literally buy into the buy and hold investing strategy. Not only does it often produce great results, but in this case it also helps save you money too!
One thing to be really aware of is the fee you are paying relative to your investment. Pearler App doesn’t have a minimum investment size except for its brokerage free ETF option. For the brokerage free ETF option you are required to invest a minimum of $500.
For Australian equities you are just required to buy a minimum of one unit, plus the brokerage fee. For example if you wanted to invest $15 and buy 1 share of Qantas you can. Qantas is around $4.71 plus the fee of $9.50 which means you would have spent $14.21.
This example has the $9.50 equate to about a 66% fee of investment through the platform. So if you are planning on investing small amounts of money like this you should consider Spaceship or Raiz.
If however, you want to save up small amounts of money to invest less frequently and invest large sums of money this will reduce your fee of investment significantly. For example a $300 investment in Qantas with the $9.50 fee would equate to 3.16%.
Either way, with a $9.50 fee for investing directly in Australian equities, it certainly makes their free ETF option significantly more attractive for long term investors looking to build wealth.
The Fees involved with investing in US equities look to be the same fee of $9.50 however, you are able to own fractional shares and will have to pay in USD. I am unsure if there is a currency conversion fee yet or not.
Perhaps the Pearler App’s greatest feature, is their auto-invest feature. For those of you familiar with micro investing platforms like Spaceship and Raiz this may not seem like a big deal.
However, there are no other main brokerage platforms that offer such a feature to enable users to set up an auto-invest option. The more cynical readers may point out this is because they make money the more you buy and sell shares. You would also probably be right.
However, there is a greater reason. The Auto Invest feature enables users to select from 3 auto invest investing strategies.
- Lowest Share
- Rebalance Portfolio
- Equal Invest
Lowest share investment strategy invests in the lowest weighted asset from within your portfolio. So it will invest in whichever asset makes up the smallest slice of your portfolio pie come auto-invest time. This one incurs the least amount of fees and as such has become the most popular option for Pearler investors.
Rebalance Portfolio investment strategy will automatically rebalance your entire investment portfolio to your predetermined asset allocation. So if you had 4 ETFs and had a target weight of 25% for each, when you select this option it would sell or buy these underlying assets accordingly to maintain 25% each. Be careful with this option as it could end up being quite expensive.
Equal invest strategy will invest your funds equally across all your assets within your chosen portfolio. So if you had $500 on auto invest and had 4 underlying assets, it would invest $125 in each asset. Note it would also incur brokerage on each trade.
The lowest share auto invest feature is a great option for those looking to build up a portfolio of free ETFs through the Pearler App.
There are many different account structures you can open with Pearler, which is really great to see. Other investing platforms don’t quite have the full suite of options that Pearler provides.
- Trust/SMSF for Individual
- Trust/SMSF for Company
Given the vast options to choose from you should do your own research or seek out professional help if you want to use options other than Individual or a minor account. I love that Pearler App have so many options, especially the ability for the minor account. Helping build generational wealth is one of my big investing goals.
Currently Pearler is reviewing and Beta testing the US investment options, but some accounts can trade both Australian and US equities and ETFs.
This is a huge breakthrough for Australians wanting to be able to invest in both markets from within the same platform.
You can invest in all of your favourite Australian companies and some selected ETF options. Within these Pearler ETF options some are also free to buy. However, some of the more popular ETF options aren’t currently available.
US investing incurs the normal $9.50 fee, but there is also a small currency conversion fee. You will buy the US stock in USD, but the $9.50 fee is in Australian Dollars. I will update this Pearler Review once this functionality becomes more available. This is still in the Beta phase, so watch this space if your account doesn’t have this functionality yet.
Have you ever been to the gym with a friend or lifting partner, and experienced greater results and accountability? That’s part of the benefit of Pearler community investments, it helps open up the investing world so anyone can get great results.
While it isn’t a great investing strategy to blindly invest how others are also investing. It can certainly help you learn more and even observe how other successful people are growing their wealth.
Humans love to be part of a group or community and belong with others. So I really like this concept Pearler has put out there for others to see “Finfluencers” portfolios and their investing goals and progress.
Not that you should blindly invest the same way others do, but it is great to watch, learn and review other Pearler users investing strategies. This can help you understand how others are building their wealth plan.
This transparency is great to help people get talking more about investing and how they are building their wealth. The more open we are about investing, the more people can learn and take action!
One of the things I love about Pearler is their push to help educate as many people around their finances and investing as possible.
Their platform has some amazing free resources to help users better manage their investments. They have an Investment frequency calculator, Franking credits calculator and Financial freedom calculator available.
These tools are a great addition to their investing platform. Combined with their blog content and the FIRE E-book and its fair to say Pearler genuinely cares about their users financial education.
It is definitely worth taking a look at their free educational tools. As it will help you review Pearler’s mission and transparency towards its user base.
Keeping tabs of dividends received and franking credits, along with any purchase or sale of investments can be hard to keep track of and often confusing. Obviously Pearler encourages its investors to buy and hold for the long-term, but you need to keep records of this.
Fortunately Pearler App has partnered with Sharesight to help track and manage your investment platform and tax reporting.
You can sign up for free here to Sharesight and track your portfolio and make it easier come tax time!
Pearler really is about helping its users build their wealth over time, as such it was great to see they had commissioned an e-book all about FIRE.
This E-book was written by some of the top Financial Bloggers within Australia and the Pearler founders themselves. Within this E-book is some amazing content that will help educate Pearler users on all things FIRE related.
Whether you just want to get a better understanding of the FIRE movement, dip your toe in or dive head first, this free E-book is definitely worth downloading and having a read through. You can find this E-book on their website or through signing up to the platform here.
Another great feature about Pearler is their transparency. They acknowledge that the Pearler platform may not be the best option for people due to fees and small cash balances available for investing.
As such they have partnered up with my favourite micro investing platform, Spaceship Voyager. Pearler refers people to Spaceship in the case that micro investing is currently better suited to their financial needs.
The transparency and honesty surrounding this is very refreshing. Rather than enticing users into a platform that is obviously not appropriate for them,instead helping refer to other suitable options is a great way to show great brand values.
Upon further review Pearler and their management team really are great people that truly want what is best for their community. It really is great to see founders putting such effort into providing honest and transparent information.
Pros & Cons
- Autoinvest Feature
- Australian & US Investing in one platform
- FIRE Community
- Free ETFs
- CHESS Sponsored
- Encourages Long Term Wealth building
- Require $500 minimum order for Free ETFs
- Require Large purchases to make fee cost effective
- Auto invest Feature can be quite expensive if selecting an inappropriate option
Who Is Pearler For?
Pearler is providing a platform that enables users to build wealth without thinking or doing anything. Utilising their auto invest feature, users can set it up once and not look back knowing the platform is doing the heavy lifting for them.
This platform is great for people that want to build their wealth over time, and especially those that don’t want to dedicate much time to it.
It is also a great platform that enables Australian users to invest in both US & Australian equities from within the same App. There are great apps out there like Stake and Superhero that also do both, however Pearler differs due to their Buy and Hold, FIRE approach.
It is also a great option for investors that will be able to invest large sums of money, rather than micro investing. $1,000 per month size investments rather than $50 per month, as fees will erode wealth with small sums of money.
Is It Worth It?
Before deciding if an investing platform is worth it, you first need to decide on your investing goal and investing strategy. This will enable you to select a brokerage platform that suits your goals and investing strategy.
If your goal is to build long-term wealth, with little effort involved in doing so. Your strategy might be to auto invest once a month into an ETF with ($500+).
Then following this strategy to achieve that goal through the Pearler platform is definitely worth it, as no other platform allows auto invest features with Free ETFs.
You should also review Pearler’s fees relative to your investment size and make sure the numbers make sense. Make sure your strategy aligns with your goals and that the platform you choose is a perfect fit too!
Sign Up Bonus
If you enjoyed this Pearler review and think that the platform matches up with your investing goals. Then you can sign up here and receive a free brokerage credit to get your investing journey started.