Because who doesn’t love a good Q and A, right? I have invited Kurt and the team from Pearler to come onto CaptainFI and have a chat about the platform, and where it’s headed.
CaptainFI is not a Financial Advisor and the information below is factual review information, not financial advice. This website is reader-supported, which means we may be paid by advertising on the site, or when you visit links to partner or featured sites. For more information please read my Privacy Policy, Terms of Use, and Financial Disclaimer.
An interview with the founders of Pearler
1 – What is Pearler, and how can it help people in Australia on the path to Financial Independence?
Pearler is an online broker for long-term Aussie investors, founded by 3 friends from Sydney in 2018 after we got fed up with only having two bad options to refer our friends to when they wanted to start investing – confusing trading platforms or expensive micro-investment apps.
Just like other brokers, Pearler allows investors to invest directly into any Aussie or US stocks and ETFs. But where we differ is that instead of designing our platform around the buying and selling (‘trading’) experience, we’ve built Pearler from the ground up to focus on the thing that matters most – helping people achieve their long-term financial goals.
To do this we’ve got features like Goals and Autoinvest, which together allow you to set a goal (e.g. Financial Independence), then automate your investing strategy to achieve it and track your progress along the way.
We’ve also embedded community elements in our platform – we make it easy for our investors to compare and share their portfolios with friends, family and ‘Finfluencers’, or see what the most popular stocks and ETFs for a specific goal are, for example.
Our goal is to make it incredibly easy for every Aussie to invest in shares the right way – incremental amounts in diversified portfolios, for the long-term.
And that makes it perfect for Aussies pursuing FI 😉
2 – Can you tell us a bit about yourself, the team and your background?
We have 3 co-founders: Nick, Hayden and myself. We’re all really passionate about helping people learn to become better with their money.
Nick and I come from a finance background – we used to work together at an investment office in Sydney. We realised that both of our social circles were experiencing similar problems when it came to learning to invest, despite being at different life stages (I was mid-20s and recently graduated Uni, Nick was early 30s and just started a family).
Long-story short, our friends were asking us to help them learn to invest and we had two options to choose from:
- Refer them to an online broker, give them a passive investing crash course and hope they don’t get confused or disillusioned along the way, or;
- Refer them to a micro-investment app, which makes it easy to invest in diversified portfolios for the long-term, but is more expensive and ‘dumbs down’ investing.
As you can see, both are bad options.
The learning curve for #1 is enormous and stressful, while #2 is more expensive and not how we invested ourselves.
We began to realise that there was this big gap in the market for a genuine long-term online broking platform – both for beginners and seasoned investors – and so we set about solving that.
This is where Hayden, our third co-founder, comes in. Hayden and I lived together in our first couple of years of university and he is the most talented software engineer I know. When Nick and I had this idea, we took it to him for advice on how the hell to go about getting it built.
Around this time I was also becoming more and more involved in the Aussie FI Community and saw that FIRE was doing an awesome job of helping people overcome the passive investing learning curve.
I then had the brainwave that Pearler should just start by building the perfect investment platform for FI and if we did that, we would be well on the way to having the ultimate long-term investing platform for all Aussies.
3 – What has your journey to Financial Independence looked like so far?
Reading the Barefoot Investor at age 14 kicked off my FI journey. It was what really triggered my passion for personal finance.
The following year I invested all of my $15,000 of “life savings” in 3 stocks because I’d bitten deep into the “compound interest is the 8th wonder of the world” mantra & “knew” the most important thing was time, so I was in a hurry to invest all I had as soon as I could!
But I didn’t know about ETFs or the importance of low-cost diversification. Nor did I know that most stockbrokers had no interest in me making money – they just wanted to make commission!
So when I got recommended these 3 picks from this “professional”, I was quickly sold (and my parents were too). But then the GFC hit the following year & my share portfolio plummeted in value and never bounced back.
4 – What are some of the main tools you get to use with Pearler?
We’ve literally designed Pearler from the ground up for long-term investors. Most low-cost brokers focus all their energy on making the trading experience better. Limit orders, market depths, weekly performance updates, the list goes on… none of this helps a long-term investor!
We’ve got rid of all this trading crap and replaced it with genuine long-term investing features like Autoinvest, Goals and Shareable Portfolios. These are some of the main tools, but there are a heap more and I think you’ve mentioned them earlier in this review.
5 – How do you personally invest with Pearler?
You can see everything I invest in on Pearler in my Pearler profile, but as an overview it is;
- A portfolio of ETFs
- I use Autoinvest setting “single asset furthest below target weight”
- I recently swapped buying VTS & VEU for the Vaneck global sustainable ESGI (free brokerage) with a target of 40% (international)
- I invest in A200 for Australian exposure with a target of 40% (Australian)
- I invest in a geared ETFs (Australian and US shares) with a target of 10% portfolio each.
6 – What is the company Pearler all about?
Pearler exists to help everyday people get better financial outcomes.
Most finance companies are set up to sell financial products they own to fit people’s needs. Someone comes in, asks for a loan, an investment, or insurance and they get sold something that the company owns, even when a different product is more suitable, most of the time.
This happens because finance companies are conflicted; they make most of their money from the products they sell, so the advice they give often puts the interests of the company ahead of the interests of the client. This is even true for financial planners – around 85% are bank-affiliated! And the truth is that a lot of good financial products exist! The problem is that there is no “best” ETF, savings account or loan – they depend entirely on the goals and circumstances of the individual!
So at Pearler, we have decided that rather than try to make products, we want to help people find them – ‘The right financial products at the right time, starting with investing’, is our go-to line.
Ultimately, we want to be the company that democratises access to reliable financial advice and helps the 99% take back control of their financial lives.
Actually, all three of us have dug pretty deep into our individual motivations and have posted them on our site. You can check them out here:
In terms of our values, we haven’t yet formalised these, but here’s an exclusive look at the draft version for you mate;
- We build things people love to use, and we know when they do
- We give before we get, and give more than we get
- We make mistakes, but not with people’s money
- We are transparent, radically transparent
- We are passionate, economic and creative; we have an owners’ mentality
- We’re not on the hook to be here. We love what we’re doing, and who we work with.
- We’re for the 99%. We help those who struggle to help themselves.
7 – Is Pearler Chess sponsored, and does this even matter?
Pearler is a CHESS sponsored broker which means that our investors directly own their shares & therefore investing with Pearler is extremely safe.
It also means you can move your shares from Pearler (or to!) in a matter of a couple of days.
Relatively-speaking, CHESS sponsorship is cutting-edge technology. The ASX is one of the few markets in the world that has this direct ownership option & it was able to implement this in 1994 because our market is relatively new compared to most global markets.
The other option is what’s known as a Custodian model where investors aren’t actually direct owners, instead they are the “beneficial owners”. This means that the title to the shares aren’t held in their name, but they still have rights to the benefits of ownership.
This model is all well and good in theory, but it does come unstuck from time-to-time. For example, there are a number of cases of the Custodian (the bank holding title to the assets) or Broker (the platform facilitating the transactions) running into financial or legal trouble & customers’ assets being caught in the mix. The most recent Aussie example I know of is Halifax (2019). And prior to that was BBY (occurred in 2015, court case is still ongoing).
Best case when this happens is that it takes a few months to get access to your shares. Worst case is that you lose some or all of your assets – as highlighted by the examples above.
Because of this risk, CHESS sponsorship is the most popular way for Australians to buy shares on the ASX. All the major banks and share trading platforms use this system for ASX brokerage, and so do we!
Two of the main players who have chosen to use Custodian models in Australia for are IG Markets & Superhero. The main reason they have chosen to go this way is to offer cheaper brokerage costs ($8.00 & $5.00 respectively for a $5k investment), which they can do because it costs less to run a Custodian model. That said, our brokerage fee isn’t that much higher – we charge $9.50 and you get peace of mind [NB Brokerage price has been dropped to $6.50, and $5.50 for prepaid]..
8 – How does Pearler plan to compete with $5 brokerage costs from other start ups?
This will just be a quick summary (but trust us there is more detail coming).
We are working on a ‘freemium’ service, which means the basic subscription or service will be free, and there will be a potential opportunity to pay for some more detailed tools. However, one of our main principles is not to ‘price people out of Financial Independence’ and we want it to be as accessible as possible – so locking things behind paywalls isn’t really our aim here.
The first version of this is system is “Free purchase ETFs” with 3 ETF managers – VanEck, ETF Securities & eInvest. We do plan to have some sort of freemium service that encompasses more free investment brokerage costs for both AU & US ETFs next year, so watch this space.
The real question might be how do other share trading platforms plan to compete with us!
Yes we have extended this functionality to all of our customers. The US market represents over 50% of the world’s market capitalisation, so it’s the big one. We will add other markets over time too, if they get requested enough. Basically we are highly agile and responsive to feedback*
10 – What is the future of Pearler – where is it going?
You can check out everything in the world on our roadmap. So there are the features you might already expect that are on our roadmap, like:
- Single sign-in for multiple accounts
- Multiple goals and multiple target portfolios
- Calculators to help set each goal
- Advanced automation
- Collaborative goals
- And much more…
The aim of these features is to continue to make Pearler a better long-term investing platform.
And this is where it gets really exciting. We think that as we build our long-term investing platform, we will be able to expand to include other financial assets – superannuation, loans and insurance, for example – and help guide decisions in these areas too.
Essentially, we think Pearler can become a personal finance marketplace – a one-stop shop for all financial products like investments, loans, insurance and a place you can find peer-reviewed high-quality financial services too, when you need them.
Our ultimate goal is to be the company that democratises access to reliable financial advice and helps the 99% take back control of their financial lives.
And now you know how we plan to do it! 🚀
11 – What are your top three financial independence tips?
- Save more than you spend (and invest it!). Can’t say that I do this myself on my current ramen noodle salary, but from what I’ve seen, those who FIRE in less than 10 years almost always do.
- There is no upper bound on income! If you’re in the FI community, you’ve probably already bought into the “no expense is a fixed expense” mindset, but what I think gets missed a lot is the potential for earning more. Seriously, you can only cut expenses so far. Great article here written by the Aussie Firebug on ‘Best Bang for your Buck.’
- Enjoy the journey. Sure, FI is the goal, but don’t get so lost pursuing it that you forget to live and enjoy your life today. This is really important – otherwise, you might find you get to your goal & have no friends left to enjoy it with!
12 – What are your top recommendations for learning more about personal finance, Investing and personal development?
OK, cruel question because there are many good ones. Just to name a few
- The Little Book of Common Sense Investing by John Bogle
- Wealth of Common Sense
- The Barefoot Investor by Scott Pape
- Rich Dad Poor Dad by Robert Kiyosaki
13 – Where can we get in touch with you, the team from Pearler or learn more about the platform?
Honestly, signing up to Pearler is quick and free. We are highly responsive to any queries from within the platform, and it has a heap of great guides and articles on our associated blog.
If you’re not quite ready, you can check us out on Social media or shoot us an email at [email protected]
Being the stubborn little shit I was (and still am), I resolved to learn all I could about investing, and why this so-called professional is allowed to lose people’s money. I went on to find that retail investment advice gets it very wrong, very often, which eventually led to me co-founding Pearler.
Of course, I kept my FI journey happening alongside Uni & Pearler too & have a decent nest egg saved up – or rather, invested in a set of ETFs (which I’ll detail later) – although it did get halved to fund Pearler 😂
Summary
Thanks so much Kurt, Nick and Hayden! You can check out my full review of Pearler in my article HERE.
CaptainFI is not a Financial Advisor and the information below is factual review information, not financial advice. This website is reader-supported, which means we may be paid by advertising on the site, or when you visit links to partner or featured sites. For more information please read my Privacy Policy, Terms of Use, and Financial Disclaimer.
Captain FI is a Retired Pilot who lives in Adelaide, South Australia. He is passionate about Financial Independence and writes about Personal Finance and his journey to reach FI at 29, allowing him to retire at 30.
