pearler review

Pearler Review: Auto-invest with Low Fees

https://pearler.com/register?deal=aussiedocfreedom

*This post may contain affiliate links. This means if you purchase through the link I will receive a small commission at no cost to you. It is the way sites like this are funded, but does introduce a conflict of interest.  

I have now been investing with Pearler for around 9 months! The platform has continued to improve since I signed up. I’m so glad I found Pearler! It has been an absolute joy to work with them and watch their platform evolve.

My original Pearler review can be found here. I wrote the original before I formed an affiliate relationship with Pearler. As time goes on my feelings have not changed.

There are many updates to Pearler, but for the sake of making conflicts of interest clear, I have maintained the original article in case you wish to read it.

I will continue to update my Pearler review in this article.

Pearler Review: The Bottom Line

Pearler designed its platform for long-term investors mainly interested in passive ETF securities. The ability to automate investments regularly is unique and the big selling idea of the platform.

They based the platforms on the needs of the financial independence crowd. But you don’t need to be a hard core FIRE enthusiast to build wealth with Pearler’s auto-invest feature.

Enjoy my Pearler review. Do you want to build wealth too?

Most investors perform dismally over the long term because they:

  • Fail to stick to the simple plan
  • Pick individual stocks and underperform the market
  • Buy stocks impulsively based on hunches and media articles
  • Waste much of their gains on brokerage fees
  • Panic when the market crashes and sell at the worst possible time
  • Fail to invest at all, because it’s too complicated and risky

Pearler helps us overcome our own brains by:

  • Prioritising automated investing to help investors stick to the plan
  • Providing a simple platform that’s easy to use
  • Encouraging long-term investing in diversified portfolios of index ETF securities
  • Forming a “Pearler community” of like-minded long-term investors
  • Charge low (and decreasing) Pearler brokerage fees
Aussie FIRE Book, funded and organised by PEARLER available FREE here.

What is Pearler?

Pearler is an online broker for long term Aussie investors. It was founded in 2018 by three friends based in Sydney. It allows investment into a variety of Australian stocks and ETF products directly.

Rather than focusing on the purchasing and selling expertise Pearler was built to focus on what most matters – helping others achieve their financial goals.

Pearler Review: Automated Investing

Pearler is the only broker to support automated investing. Automation is an incredibly powerful tool in helping investors stick to the long term investing plan.

If you have to cancel a direct debit to skip an investment, you are far more likely to stick to the plan of investing every quarter. If you have to press “buy” each quarter, it is more likely you will find an excuse not to. There are always competing priorities for our money.

It really is hard to overstate the benefit of being able to “set and forget” your investments.

Starting investing in the share market for the first time is initially exciting, but it quickly gets a bit boring. Once your balance starts to build, it doesn’t seem to grow much on its own and contributions don’t increase the balance quickly either. Once you get past this painful part, the growth in your investments will eventually be enough to encourage you.

But you’ve got to get past the boring painful bit. Automation will help.

Does Anyone Else Offer Automation?

At the time of writing, none of the other Australian trading platforms offers a fully automated investing experience.

Vanguard personal investor allows automated bpay or direct debits into its cash management account (earning 0.35% interest). Vanguard still requires you to manually press “invest” for every investment.

Perhaps this is a good time to plug your super fund.

It is easy to automate investing into super, through salary sacrifice or regular bpay deposits. It may also be the most tax-efficient way to invest for double-income couples.

My $115/ fortnight spouse super contribution (which attracts a $500 tax annual rebate) leaves my account quietly. Every few months I have to check it’s still working as I don’t recall noticing it!

Stealth investing is a thing.

Brokerage Fees vs Other Online Brokers

Pearler has competitive brokerage fees of $9.50 for an unlimited investment amount. These are very reasonable in comparison with other brokerage platforms.

The fee is around half of Commsec brokerage and on par with Self wealth. Even cheaper brokerage is possible through non-CHESS sponsored accounts. Investors don’t legally own the shares or ETFs in their name with these. This is fine for beginner investors learning with small amounts. For your life savings, you should have CHESS sponsorship.

They are also trying to lower brokerage costs even further.

Review Pearler: Free Brokerage

Pearler offers selected brokerage free ETFs with three ETF managers as long as you hold the investment for at least a year. You will have to pay brokerage on the eventual sale of assets. The brokerage free ETFs I looked at had slightly higher management expense ratios (MER), around 0.4%.

The graph below shows investment returns paying brokerage and MER of 0.2% vs brokerage free ETFs and MER of 0.4%. In this scenario, the investor is $1000 ETF every month. The brokerage free option is advantageous in this situation.

In the next scenario, the investor purchases $3000 four times a year to save on fees. Paying brokerage is advantageous after a few years in this situation.

Whether the brokerage free ETFs are right for you probably depends on how much you are investing, how often, for how long, and whether the ETFs available suit your needs.

Is Pearler CHESS Sponsored?

Pearler Investments is a CHESS sponsored broker. CHESS Sponsorship means you legally own the shares. If the Pearler platform collapses, your shares can be moved to another brokerage account via a share registry. In the case of Pearler and Commsec, Computer share is the share registry.

Some trading platforms are not CHESS Sponsored (notably Superhero) which means investments are held in trust for you.

A couple of days after purchasing your shares, you will receive a letter from Computershare, the CHESS registry.

If you wish to set up dividend reinvestments, you need to log in to Computer share and register for dividend reinvestments for each investment individually. It’s not hard to do, just worth knowing.

I had assumed as I owned the same investments through Commsec, the dividend reinvestment plans would continue with Pearler. Wrong! I had to work out how to deposit a cheque in 2021.

Pearler Review: Set Up Hassle

This link* to Pearler will get you your first purchase with free brokerage.

The actual sign up process was quick and easy, I was able to complete it all online in less than an hour. Opening my Commsec account a few years ago seemed a lot more challenging. The set-up process with Pearler was far easier. It all seemed intuitive.

You need to verify your identity and link a bank account. Pearler makes the required steps as easy as possible.

Pearler offers the ability to share your profile with friends, but the privacy level is up to you. Adjust your profile between “Public”, “Within Pearler”, “Unlisted” and “Private”. See this article to explain more.

Accounts Available with Pearler

You can open individual or joint accounts with Pearler.

A Self-managed super fund or trust account is also possible with Pearler.

You can open a minor’s custodian account. The taxation here gets a little complex, and it’s definitely worth checking with your accountant before opening an account.

Pearler Review: The Trading Platform

Pearler is a long term investing platform. It is designed as a simple interface, in contrast to most of the confusing trading platforms designed for short term traders.

Pearler provide information needed by long term passive investors..

Pearler now display the live market price for instant direct buy/sell screens. If you are making direct stock investments, the exact price may be important to you.

Pearler displays CXA Stock Exchange (CHI-X) end-of-day market prices elsewhere on the platform, which may vary from the live price by small amounts. A long term investor does not need to know the value of their platform down to the dollar, so this is more than adequate.

On opening your Pearler account, you come to the Dashboard where your current balance is displayed along with historic progress. You have tabs for Auto invest, invest and transactions.

Auto invest is where you can set and adjust your regular direct debit requests to Pearler.

Invest is where you can directly buy / sell with instant deposits.

Transactions will show all movement of money in and out of your account.

Investment Strategy

Make sure you have set goals and made a financial plan. If you don’t know where you are going you are likely to end up lost! You will structure your investment strategy to meet these goals.

An investment strategy is usually better off being kept simple.

-Educating Yourself & Form a Long term Investing Strategy

You can get some independent financial advice to form your investing strategy, or you can form your own.

The passive investing learning curve is short and steep. You can learn all you really need to get started over a (full on) weekend. You could take a passive investing crash course – Reading through all the articles at Passive Investing Australia will teach you all you need to get started. RASK invest offers simple structured courses, some are free.

Micro-Investment Accounts

If you simply cannot commit this time currently (for those of you studying for exams, for example) I suggest taking the easiest route – micro-investment accounts.

With these, you can simply sign up for an account. The platform will provide very simple but reliable financial advice based on risk tolerance and time horizon. It will then suggest an asset allocation to a mixture of ETF securities. Once you have a linked bank account, you can auto-invest regularly.

Many online reviews will talk about how expensive micro-investment apps are. Certainly, once you get a certain amount invested, and over the long-term, they are more expensive than having your own brokerage account. But they are the easiest way to end procrastination and get started. You can also generally direct debit into them, and automation is a very powerful tool in investing.

You can also reduce the cost significantly with RAIZ*, which has a “RAIZ rewards” section. If you don’t already use cashback, these savings can fully cover your RAIZ fees for some time (particularly for families who tend to spend more).

Pearler have also indicated they are planning to release a micro-investment account, where new investors can start their journey to financial independence with as little as $5. The full details are not yet out, but watch this space!

This could make investing even simpler, taking new investors from their very first investment as a student to building financial independence with the Pearler personal finance marketplace.

Choosing a Target Portfolio

Seasoned investors can simply go to “Auto-invest” on the investing platform and search for the “ticker symbol” (abbreviated code) for the ETF securities or individual stocks they want.

You get to choose what percentage of your target portfolio you want to allocate. Your Pearler account now allows you to compare diversified portfolios with multiple target portfolios calculators.

Remember to consider any other financial assets as part of your overall asset allocation eg super, property, cash. If you have a large cash emergency fund in a bank account, do you really need some of your investment portfolio allocated to cash?

Most beginner investors, as well as financial independence seekers, will choose a simple allocation to ETF securities.

Hints for Choosing ETF Securities

  • Copying your micro-investment portfolio allocation. They are generally allocated to a range of ETF securities. You could emulate this in your Pearler account.
  • Looking at your super portfolio allocation. Either copying or adding ETF securities that you feel are inadequately represented. Look at your Super, Pearler and other assets together. You will likely have more flexibility (and lower fees) adjusting your asset allocation in Pearler than your super.
  • Choose a Vanguard diversified investment product that suits your risk profile. Then purchase this through Pearler to take advantage of the auto invest feature, that Vanguard, unfortunately, does not have.
  • Go to “Invest” then “Portfolios” to see Pearler’s portfolio suggestions.
  • Remember to check the underlying management fee of each product (they all have one) you are considering.

Pearler Review: Template Portfolios

If you click on the portfolio and select to adopt it, Pearler automatically adjusts your portfolio allocation to match.

It’s important not to get stuck trying to achieve perfection.

Stop procrastinating.

Set a limit on your learning time, make a simple asset allocation and set it up. You can always adjust as you learn more.

You can view profiles and portfolios of other Pearler investors who have chosen to be public. The profile sharing feature is not for copying someone else’s asset allocation. The idea is to allow comparison and perhaps encourage discussion and investigation.

Pearler Review: No research reports

Pearler has no due diligence and no research on the website. For the simple dollar cost average ETF portfolio investor, this is an advantage.

The other big online trading platforms such as Nabtrade and Commsec display data from Thompson Reports, Morningstar, and Trading Central. These big platforms provide lots of data for individual share pickers to delve into.

All this is absent in Pearler. It does not even display a PE multiple or volume on their website. This keeps the platform simple, without distractions.

Auto Invest Feature

You set your automated investing to invest by direct debit regularly by any set number of weeks or months.

In an ideal world, many of us would direct debit a small amount each payday into our Pearler account. However, paying brokerage monthly (or fortnightly!) is not cost-effective unless you’re investing large amounts each time.

The more you are investing each time you pay brokerage costs, the better deal you are getting. But the more time your money sits outside the market before investing, the longer you are missing out on market returns.

Pearler has a handy Investing Frequency calculator to work out the optimal frequency of investing for you. Mine is ~ 7 weekly.

Your Auto-Invest Cash Takes 2 Days to Invest

Your cash is invested according to your portfolio preferences.

If the share price doesn’t multiply neatly into your investable cash the leftover cash will remain in the cash account until you next invest. I have only had up to $75 in my cash account so far.

Your cash deposit is initially cleared into a Macquarie bank client trust account. This is not in your own name but held in trust on your behalf. Pearler discuss why this is safer now than ever before here.

The money is held here (for up to two days) Pearler invest your cash. You receive an email to confirm receipt of the cash and then again when it is invested.

You can choose to invest immediately or have them hold your cash until you reach a prespecified sum (say $5000) to save brokerage.

Manual Instant Pay One-off Investments with Pearler

Although automated investing is the number one feature that makes Pearler excellent, it is sometimes handy to be able to buy ad hoc investments.

Pearler now offers instant deposits through OSKO or Pay ID. This invests your money immediately at market price, known as a market order.

Pearler has introduced the ability to use a limit order. This is when you set the price you would like to pay (below the current market price). The purchase goes through if the price drops to your limit.

If the price never drops to your “ideal price” you don’t get to purchase the investment.

For ordinary times, most people use a market order as they know the rough price, and want the order to go through (which it will as long as someone is selling the investment you want).

US Shares

Pearler now offers US shares through the NASDAQ and NYSE. Brokerage is $6.50 + 0.5% margin on the foreign exchange, currently ~0.37% of your investment amount. Superhero advertises free brokerage US investing but charge a 0.5% margin on foreign exchange.

In case anyone is suffering from the same misunderstanding I did, it is not necessary to invest in the US stock exchanges in order to purchase the US or international index ETF securities or managed funds. These are available through the ASX.

US investing is for those wanting to invest in specific companies, such as Google.

Mobile Phone App

Pearler obviously had to launch an app. It works well, is easy to download to your phone as is pretty much an identical replication of the easy to use the website.

This is useful for those who don’t own a computer, but otherwise a dangerous temptation to check your portfolio several times a day!

I don’t need the encouragement!

If you have more willpower than me and think you’ll find it useful, download the app. For the weak-willed, keep investing apps off your phone.

Pearler Integration with Sharesight

Pearler integrates seamlessly with sharesight. This is an easy process to set up, involving just a few clicks on your Pearler platform.

At the end of the tax year, I printed out the promptly provided end of financial year summary and delivered it to my accountant. This provided all the information required for my accountant to claim franking credits and submit information accurately.

Are Your Investments Safe with Pearler?

Sanlam Private Wealth Pty Ltd is the Australian Financial Services Licenceholder for Pearler Investments pty ltd. Pearler is an Authorised Representative of Sanlam Private Wealth.

Pearler is a CHESS sponsored broker. This mean the investments legally belong to you and can be transferred to another investing platform whenever you like.

Pearler has bank-level security with 2-factor identification for changes to auto-invest or one-off financial transactions.

Customer Support

Phone contact, email and online chat directly from the website (the easiest way to get a response). This has been fabulous so far.

I provided feedback and received a response within an hour. Initially, the auto-invest had limited flexibility, I let them know I would like to invest 7 weekly (random!) and they quickly reassured me they were already working on it.

Within days, the auto-invest function had changed to a completely customisable number of weeks or months. Impressive!

Financial Independence with Pearler

Pearler is the perfect investment platform for financial independence or other long-term investing goals. You can purchase exchange-traded funds, US and Australian direct shares.

Pearler is an online broker that encourage long term investing to build wealth.

Pearler focus on low fees, automated long term investing and easy tax reporting through Sharesight. It is a secure, safe and popular online broker.

Pearler is growing and improving rapidly. Pearler investors now have over $140 million invested! If you are a long term investor looking for a broker with automated investing, Pearler* is currently your best investment platform. Make your financial lives easier with simple, auto investing.

Aussie Doc started investing with Pearler in January 2021. I use auto-invest to regularly add to my small, but growing portfolio of ETFs. We are considering opening a small custodian account in Pearler for children to watch some of their education funds grow over the next decade.

Sign up for an account*for a free brokerage credit and check it out today.

Aussie Doc Freedom is not a financial adviser and does need offer any advise.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any financial decisions.

4 thoughts on “Pearler Review: Auto-invest with Low Fees”

  1. Great write up.

    Recently transferred my holding across from SelfWealth to Pearler aswell.

    There’s still a few little bugs and plenty of features to come – but it feels good to be with a broker that will listen to users ideas and develop on the run.

    1. Thanks for dropping by and sharing your experience Sneak’s fireplace, looking forward to seeing how Pearler improve even more.

  2. Thanks for this review. I’ve just managed to get my Pearler account, and am waiting on my account to be activated.

    I am tossing up whether to go with OpenTrader or Pearler, as I am an Australian citizen residing in France (these are the only two I’ve found that will still allow me to invest residing in France).

    My simple passive investing strategy is to invest around $3,000 every 2 months into either:

    – VAS/VGS 50%/50%
    – VDHG 100%

    If I go with OpenTrader, I’ll pay half the yearly brokerage fees as it’s only $5 for deposits under $5k, but I really really like the UI and features of Pearler and think it could be worthwhile (auto-invest etc).

    Firstly, any thoughts on my two ETF strategies? Just pick one and stick to it?

    And secondly, have you had any experience with OpenTrader and do you think considering I have such a simple strategy, then I should easily be able to DIY it over there and pay half the brokerage?

    Thanks again for a great review!

    1. Hi Freshinvestor, I can’t give advice but I suppose it depends on whether you want exposure to australian markets (VAS). Do you plan to return to Australia? If not it wouldnt make much sense to have 50% in a tiny market such ASX. If you are returning, the % Overseas exposure seems controversial – passiveinvestingaustralia.com have some useful commentary on this. Never used opentrader Im afraid. The auto-invest feature of pearler is a big selling point for me. Pearler are also starting a referral incentive where you can earn brokerage credits for referring friends, which could reduce costs for you. If you haven’t already, I’d def get formal advise on tax treatment given you are an Aussie living overseas. Good luck

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