In this post we’re going to do a comprehensive review on Pearler Investing App. It’s a free trading platform that allows you to buy and sell ETFs with zero brokerage (pretty unheard of in the Australian stock market), AND it has some pretty unique features, like allowing you to invest while you sleep with pre-configured auto-investment instructions. It’s an amazing tool and I would say they are the biggest competitors to SelfWealth and Superhero, in the space of low cost share trading platforms in Australia.
So today I’ll share with you guys the pros, the cons, the things that I love, and the things that I don’t love after having used Pearler.
What is Pearler? Pearler investing platform introduction
Pearler is an investing platform available in Australia that launched in 2020, that allows users to buy and sell Australian and US shares. Pearler is not for active day traders from wallstreetbets or asxbets and is specifically tailored for those on the path to financial independence and financial wellness. With very competitive brokerage for trades, zero account keeping fees, and unique features like auto investing, it’s a pretty great product all-round.
If after reading this review you want to check Pearler out for yourself, feel free to use my referral link by clicking here to get yourself a brokerage FREE trade.
Pearler features – all the pros of Pearler
Automated investing with Pearler
Now straight off the bat with a feature that some would say is the crown Pearl of Pearler is its Autoinvest feature which is a way to put your investing on Autopilot (okay I’ll stop with the bad puns now). But seriously Pearler’s Autoinvest is a game changer and allows you to configure predefined investment instructions to automate your investing, much like how an ETF has to follow an index’s investment instructions.
To paint you a picture with an actual tangible example of why automated investing is so powerful – is a story from fund managers at Fidelity, one of the largest stock brokers in the US. Fidelity had done a study as to which accounts had done the best at Fidelity. And what they found was that the best performing investment accounts, were from the customers who had literally forgotten about their accounts
There are numerous studies that explain why this happens. And they almost always come down to the fact that our minds work against us. Due to the way our minds work we often find ourselves panic selling or buying trends, and as a result buying high and selling low. If it’s not clear enough already, I thought I’d share this chart from Richard Bernstein that shows how terrible the average investor is. Achieving an annual return of barely over 2%, if you would just leave your funds in an index fund like the SP500, you would have gotten a return of over 8% in the same period.
Now that you’re convinced of the benefits of automated investing, there are 3 steps to Autoinvest with Pearler, first you need to choose your automated deposit settings, where there are 3 options. You can choose to invest as soon as your deposit is made, wait until your cash account reaches a certain threshold before investing through automated deposits, or do manual deposits that will only invest once they reach a certain threshold.
The last part of this first step is to choose what kind of automated deposit settings you would like to have, where you can choose the amount, the frequency, and the initial start date of the deposit schedule.
Next you need to set up the target assets and weightings you would like to invest in, to make up your portfolio.
You do this by adding the shares that you would like to invest in, these can be both ETFs or regular shares in individual companies. You then select the % weighting targets for each stock in your portfolio that you would like to stick to.
This is what makes Pearler so powerful and essentially allows you to build your own custom portfolio that auto balances – taking the guesswork and the irrational nature of being human out of investing.
Then the 3rd and final step of the auto invest set up is to select your investment strategy, which is basically telling Pearler what to do with your money, each time you deposit additional funds into your account. There are currently 3 and it’s neat how it shows you the popularity of each one. You can tell Pearler to just invest in the current lowest weighted share in your portfolio (this being the cheapest brokerage-wise), or instruct Pearler to rebalance your whole portfolio to your targets each deposit (multiple trades required), or just choose to equally invest across each share in your pool.
Is Pearler CHESS sponsored?
Now I’m sure you’re wondering, is Pearler CHESS sponsored? Yes! Pearler supports CHESS sponsorship with individual HINs across its ASX share trading platform. This is really fantastic and in my opinion is a must have for any new entrant in the Australian market, given the potential risks of non CHESS sponsored holdings.
If you aren’t sure what CHESS is or why it’s important. I’ll give you a quick crash course. Put simply, CHESS Sponsored means the ASX is keeping a list of who owns what shares. If your shares are ‘CHESS Sponsored’ it means when you buy or sell shares ASX has a record of you owning those shares directly.
When you sign up for a broker that offers CHESS Sponsored shares, you get given an ID called a HIN (which stands for Holder Identification Number), and the shares are attached to you, via that HIN. You can have multiple HINs at multiple online brokers.
The most important thing to know about CHESS is that if your shares are CHESS ASX Sponsored, it means YOU own them directly, rather than someone else holding them on your behalf. You receive the dividends directly and have voting rights.
Some other brokers operate under a custodian model (usually to save money), meaning they hold the shares on your behalf. If any of those companies goes under, your ownership of the shares isn’t as clear as if they were CHESS Sponsored.
Pearler US share trading
Next question is whether Pearler supports US share trading. If you asked me a week ago, the answer would have been no! But they have just recently launched their US share trading product and it’s quite good.
The pricing is $6.50 AUD brokerage per trade with a foreign exchange rate (FX rate) of 35bps when transferring between AUD and USD. Whilst it doesn’t have free brokerage for US share trading like Stake for example, the FX rate is half of theirs. This means if you are doing less frequent larger size investments, it’s most likely that Pearler would end up costing you less in fees, even though it has a $6.50 brokerage. Here is a comparison table taken from their website comparing the fees charged for a $5,000 AUD investment in US shares across Pearler, Stake, CommSec, NABTrade, CMC and SelfWealth.
Amount shown is the cost of making a $5,000 AUD investment using each respective platform.
If you’re making smaller, more frequent trades, it makes sense to use a $0 brokerage platform like Stake. For a complete breakdown of how to buy US shares in Australia, check out my step by step guide here.
Pearler has a mobile app (both iOS and Android)
Another recently launched feature by Pearler is their mobile app which is now available on both iOS and Android. It seems to be an almost exact replica of their mobile website with some extra features like being able to login via face ID or fingerprint. Overall it’s very easy to use (much like their website) and is a great addition for those who prefer to use apps.
If you’re someone who uses Sharesight to track their investments, Pearler also has an option to directly link to ShareSight for portfolio tracking, so there is no need to manually import trades. This is really simple to set up and for me was literally a couple of clicks to sync my portfolio. You can do this within Reports, which can be found in your Pearler Settings.
This means if I make any share trades using Pearler’s AutoInvest feature or manual trades for that matter, that they will be immediately linked to my ShareSight portfolio, alongside any other trades I have made from other brokerage platforms.
Pearler account types
Pearler supports pretty much all the different account types you would want:
- Investment Company
- Trust/SMSF (Self Managed Superannuation Fund)
Moving onto fees, Pearler advocates for simple, affordable and transparent pricing structures, which is definitely refreshing in the world of finance. There are no maintenance, inactivity or transfer fees with Pearler.
Pearler Australian ASX share trading brokerage fees
In terms of Australian stock market trading on the ASX, they have a flat rate brokerage fee of $9.50 per trade. Or – and this is really an awesome initiative by Pearler, with certain ETF providers, they offer brokerage free trades on ETFs if you hold the investment for at least 1 year.
The way it works is if you buy one of these special ETFs, you don’t pay any brokerage, but if you choose to sell some within the year, you have to pay both the buy and sell cost ($19, $9.50 per buy/sell). Currently there is a list of over 45 ETFs that have free brokerage from ETF managers, eInvest, ETF Securities and VanEck (check out my post on the best VanEck ETFs to consider investing in).
Pearler US share trading fees
For US share trading Pearler’s fees are quite low compared to the competition out there.
As mentioned earlier, the pricing is $6.50 AUD brokerage per trade with a foreign exchange rate (FX rate) of 35bps when transferring between AUD and USD. So if you were doing a trade for $1,000 AUD. It would cost you $3.50 to convert it to USD, and then $6.50 in brokerage for the actual trade, for a total of $10, or 1% of the trade amount.
Minimum investment amount
There is no minimum investment amount on Pearler, which is fantastic for people who would like to get their feet wet with investing. From their website:
Pearler has no minimum order size. However, customers should consider the fact that with our $9.50 flat brokerage fee, that the smaller an order is, the higher proportion you’ll be paying in fees with respect to the total investment value.
Some brokers have minimum first orders of $500. Why doesn’t Pearler?
We don’t have a minimum, because Pearler is comfortable with you choosing the investment size that is right for you. However, please note that most market participants and registries generally consider volumes of shares less than $500 to be unmarketable parcels.
A good callout in regards to brokerage as a percentage of your trade, so typically you would want to keep this under 1%, which would require you to have a trade size of around $1,000.
So as you can probably tell there is definitely a lot of amazing features in Pearler but I want to keep this review as transparent as possible and share the areas where I think they are lacking or can improve in.
Lack of deposit options
Update 2nd October 2021: Pearler now supports instant deposits via PayID.
First. They are seriously lacking in deposit options, with the only way to transfer funds into your Pearler account being via direct debit, taking a few days to process. There isn’t even a bank transfer or BPAY option, let alone any instant deposit options. Not a massive deal for most, especially given the target market being long term investors, not asx bets day traders.
No live feed for buy and sell orders
Two. And this is actually quite annoying, there is NO live feed of buy and sell orders in the app or website when you are making a trade. So whilst Pearler does support both market orders and limit orders, you basically need to have access to another investment platform to actually see the live buy and sell orders, as you can’t see them in Pearler. Which means its really only practical to make market orders.
No support for margin lending
And three. Probably not a massive issue for most, but for those of you with a margin lending facility like myself, Pearler doesn’t support this and I’m not sure if it’s even on the roadmap.
Pearler upcoming features in the future
Even though margin lending support isn’t on the feature list, all in all there are some pretty amazing features that are getting released at a quick pace from Pearler. I even got a chance to exchange some emails with Pearler’s CEO Kurt Walkom, where he was able to drop some hints of some upcoming features on the roadmap which I can share with you.
Instant deposits with Pearler
First (and from what I hear releasing quite soon) is instant deposits. I’m not quite sure yet, whether this will be PayID, Osko, or Poli, but either way this will be an amazing addition and just further differentiate Pearler from its main competitors like SelfWealth.
Pearler integrated superannuation
Another upcoming feature from Pearler is an integrated Superannuation product, hopefully this will get released before Vanguard’s infamous Super product, which has been #comingsoon for what feels like an eternity. No additional details on this yet but I’ll be sure to share when I can.
And finally, there are plans from Pearler to release a micro-investing product, pitting it up against apps like Spaceship and Raiz. It will be interesting to see how they can create a unique offering here and I look forward to checking it out. If you’re interested in micro-investing be sure to check out my post on the best micro-investing apps in Australia.
Pearler is a great new entrant in the low-cost broker space in Australia, and is actually offering some unique features that make it stand out from competitors. The fact that it allows you to completely automate your investing strategy, with its low cost base, is why I’m going to be switching my holdings from SelfWealth to Pearler. If you want to follow me on Pearler you can do this here.
If you want to sign up to Pearler, use my referral link by clicking here to get a FREE trade.
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