Pearler Micro review from an experienced and long-term investor. Is Pearler Micro the best way to start your investing?
Pearler Micro review
Pearler Micro1 is a relatively new Australian micro-investing platform to help you start investing with the lowest fees for investors provided by the online broker Pearler. Pearler is a long term investing platform with competitive brokerage fees focused on Exchange traded funds. With 8 diversified portfolios to choose from on Pearler Micro and no minimum transaction size, investing with pearler Micro is quick and easy. In this Pearler Micro review, I’ll share information about Pearler Micro, the investing options available, the fees and my personal experience using it.
“Invest in any arrangement of 8 simple funds that track popular ETFs. Start investing in Micro with as little as $0.Nick Nicolaides, Pearler
This article is not financial advice but rather is general information that reviews Pearler Micro, discusses my use of the platform, and ultimately aims to help you answer for yourself whether it might be a good way to start your investing journey on the path to Financial Independence.
- Choice of 8 different ETF funds
- No fees if your balance is below $100
- All-in-one, Ethical and thematic investment options
- No brokerage costs
- Round up and Auto invest features.
- Not CHESS sponsored2
- Does have a monthly fee ($1.70 vs $2.30) which erodes your balance
- Transferring from Pearler Micro to Pearler Shares is a capital gains event
- Not linked to Sharesight yet.
Verdict: Pearler Micro is one of the leading micro-investing tools to start your investing journey and expand your financial education.
What is Pearler Micro?
Pearler Micro is a cost-effective micro-investing tool provided by Pearler that helps educate investors in Australia through the offering of 8 diversified investment options. You can make investments via once off financial transactions, by using the round-up or with automated investing using the auto investing feature. Pearler micro doesn’t have a brokerage fee, but instead has a small monthly fee depending on the number of funds you hold. Pearler Micro is all about helping you master the passive investing learning curve.
Why choose Pearler Micro?
The features of Pearler Micro definitely make it worth considering:
- Low cost. The app is an incredibly cheap way to invest in the share market. There are zero fees for the first $100 you invest, and above $100 the fee is $1.70 per month if you have one fund, or $2.30 per month if you have multiple funds.
- Diverse portfolio. Each fund gives you instant diversification, spreading your money (and risk) across a wide range of companies, sectors and countries. For example Diversify and Chill holds the Vanguard diversified High growth fund (ASX:VDHG) with global exposure across stocks, bonds and cash.
- Easy to use. There is no minimum investment, and the web client is straightforward, letting you transact either at home or from your phone while you’re on the move. You can enable round-ups and Auto invest to put your micro-investing on autopilot.
- Making tax time easy. Pearler Micro provides you with an annual statement to help you complete your Australian tax return.
These features make Pearler Micro a perfect choice for regular micro-investing to accumulate small amounts over time. The problem with a traditional broker or share trading platform is that they charge a minimum fee per transaction. That fee can be $20 per trade, for some of the best-known platforms. That’s not a cost-effective strategy if you only want to make small investments at regular intervals. With Pearler Micro, micro-investing becomes worth it, making it a great educational tool as you build investments before switching to the main Pearler shares platform.
The brokerage-free and low monthly fee approach also allows you to achieve dollar cost averaging3, an investment strategy praised by legendary investor Warren Buffett. The idea is that it’s too hard for the average investor to pick the bottom of the market. Instead, it’s better to invest a fixed amount at regular intervals.
Investors will also want to consider the past performance of the funds provided by Pearler Micro. Remember that the funds available are ETFs and each fund is a different ETF which have different emphasis on particular sectors.
Investment Funds available on Pearler Micro
Pearler Micro has 8 funds you can choose from
- Diversify and Chill
- Global Large ESG Companies
- Aussie Large ESG Companies
- Aussie Large Companies
- Global Large Companies
- An American Buffet
- Battery Tech
- Better Future
Diversify and Chill
An all-in-one option that invests in VDHG, a Vanguard ETF that invests in multiple Vanguard funds to combine returns across Aussie and global shares, bonds and other assets. It was voted most popular one-stop-shop for financial independence by Pearler’s first users and is still the most invested diversified option.
Global Large ESG Companies
An option that invests in ESGI, a VanEck ETF that invests in large global companies (ex-Australia) but excludes any with significant exposure to fossil fuels or engaged in anything not consistent with responsible investing.,
Aussie Large ESG Companies
An option that invests in GRNV, a VanEck ETF that invests in large Aussie companies but excludes any with significant exposure to fossil fuels or engaged in anything not consistent with responsible investing.
Aussie Large Companies
An option that invests in VAS, a Vanguard ETF that invests in the 300 largest ASX listed companies. VAS is the Pearler community’s most invested ETF tracking Aussie large companies.
Global Large Companies
An option that invests in VGS, a Vanguard ETF that invests in many of the world’s largest companies listed in major developed countries. VGS is the Pearler community’s most invested ETF tracking the world’s largest companies.
An American Buffet
An option that invests in IVV, a Blackrock ETF that invests in the 500 of the largest US listed companies. Warren Buffet made a bet in 2008 that after fees, a passive S&P 500 index fund (like IVV) would beat active traders, or hedge funds, over 10 years. He won. He also reckons that his family should put their money into the S&P 500 as part of his will… but that’s another story.
An option that invests in ACDC, an ETF Securities ETF that invests in global companies that are involved in developing and producing battery technology, including lithium.
An option that invests in IMPQ, an eInvest ETF investing in predominantly Aussie and New Zealand listed small companies that also contribute positively and sustainably to society and the environment. IMPQ only invests in companies with at least one woman on its board of directors.
Signing up and getting started on the Pearler Micro app
A key feature of the Pearler Micro investment app is that they make it amazingly simple to get started:
- Create a Pearler account
- Next, agree to the various terms and conditions. They will do all the required security checks and balances required by ASIC under federal finance laws and you will be required to provide identity details (such as your name, DOB and driver’s licence number). They will also verify you are not a tax resident outside Australia.
- Choose your funding method (i.e. linking a bank or setting up a unique PayID4) and select how much you want to add as an initial investment amount, into your brokerage account. Alternatively, set up a plan to make regular contributions (weekly, fortnightly or monthly).
- Choose from one (or more) of the 8 Pearler Micro options available.
- Follow the steps to purchase your ETF – Congratulations – you’re now an investor!
Pearler Micro review: My experience using this investment app
I couldn’t of course do a Pearler Micro review without trying it for myself! The process to sign up to Pearler Micro app was super quick and simple because I already have a Pearler account (P.S. you can follow me there and see all of my investing strategies in real time – full transparency). I have a great relationship with the team at Pearler so they reached out to let me try out Pearler Micro early to suss out any issues (there were none that I could find).
If you aren’t already a Pearler customer, it’s pretty easy and you just need to share the standard details such as;
- Phone number
- Date of birth
Since I already had a Pearler account, and was offered an Early access to Pearler Micro it was super easy to activate over email.
Linking my bank account to Pearler Micro
I actually didn’t realise Pearler Micro would be able to use the funds in my standard Pearler Shares account because I had already set up a linked bank account, so I kinda doubled up here by creating a new Pearler Micro Pay ID. You need to link a bank account if you want to use the round-up and auto-invest feature as they use direct debit to your Pearler cash management account.
After setting that up I decided to start with a small one-time investment of AUD $100. The money was instantly in my Pearler cash account.
My Pearler Micro investment choice: Diversify and Chill
I looked carefully at potentially picking up some of the Ethical investing or thematic fund options, but ultimately settled on Diversify and Chill. Not just because it had a cool name, but because it holds the Vanguard Diversified High Growth (ASX:VDHG) ETF, which in my opinion is the simplest and easiest ‘set and forget’ option for global diversification across multiple classes.
“An all-in-one option that invests in VDHG, a Vanguard ETF that invests in multiple Vanguard funds to combine returns across Aussie and global shares, bonds and other assets. It was voted most popular one-stop-shop for financial independence by Pearler’s first users and is still the most invested diversified option.”Pearler
I just reckon, given Pearler Micro is all about educating people about investment and the whole ethos of Pearler is to make investing simple and as accessible to everyone as possible, I wanted to just use this KISS principle.
Also, I already tried buying ethical funds on Commsec Pocket and thematic ETFs (like ACDC) on Superhero and have been bitten on the arse as I clearly didn’t do any research or due diligence and just bought them and they happened to have serious corrections what feels like literally days after I clicked buy. So, in line with the Pearler Ethos and my own personal investing method, I just went for Diversify and Chill.
I also tested making a small transaction and purchased an additional $2 worth of Diversify and Chill, just to check whether you really could invest small change. It worked, and my balance reflects $102 worth of investments in VDHG. After using Pearler micro to test it, I have since sold my Diversify and Chill parcels. After reaching FI, I did some thinking and as a long-term investor, I should simplify my investments and consolidated them all. This is what I have done (and am doing), so keeping dozens of small micro-investment accounts open aren’t good for me personally.
Sharesight is the best way to track your investment portfolio and help you complete tax reporting.
Of course, no review would be complete without discussing the tax implications of Investing. If you buy, hold or sell shares you are going to eventually have to deal with tax – both Capital gains and dividend income. This is a huge pain in the behind, and why I outsource this crappy and time consuming job to Sharesight who automatically track all of my portfolio holdings, dividends, capital gains and tax liabilities.
Sharesight has the functionality now to track fractional shares of ETFs, which is a game changer for microinvesting platforms. Check out my detailed review of Sharesight and how it can save you time and money.
Pearler is still working on a connection between Sharesight and Pearler Micro, so for now you would have to manually enter your trades, but I presume this will be integrated shortly just like how the main Pearler platform is linked to Sharesight.
FAQ: Pearler Micro frequently asked questions
Answers to Frequently Asked Questions (FAQ’s) on Pearler Micro.
Is Pearler Micro safe?
Pearler is regulated in Australia by ASIC, in the same way as other financial institutions are. It has now been around for a few years and is being used by more than 50,000 Australian customers.
When you invest into Pearler Micro your money is invested into shares through ETFs. As with any investment in the share market, your Pearler Micro investments will be at risk of market fluctuations. So, all the usual disclaimers apply – your investment can go up or down, returns can vary, and past performance is not a guide to the future.
Share investments are long-term investments, so one risk with the Pearler Micro is because it is so easy to use (and there are no exit fees), you might be more tempted to act on an impulse and withdraw your money if the market crashes – and you could lose money. So, you’ll need some discipline to stay invested and ride out the waves.
There is no guarantee that you will not lose all of your money investing in shares as it is possible for investments to go to 0, however, it is unlikely.
However, whilst the Main Pearler platform is CHESS-sponsored, Pearler Micro is not CHESS sponsored. If the Pearler Micro platform itself went bust, you should be eligible to receive your capital back as they are simply a managed fund investment trust, but not being CHESS sponsored can make it messy if this did happen.
Realistically though, your Pearler Micro balance would be small. When you do build up a large Pearler Micro balance, it would make sense to move it to the main Pearler platform, mitigating any risk.
Is Pearler Micro CHESS sponsored?
No, Pearler Micro is not CHESS sponsored and your investment portfolio is not held under your unique HIN (Holder Identification Number)5 meaning your capital may be at risk. As an investment trust, shares are held on your behalf and you should be legally entitled to the value, but this may end up occurring at a reduced value after a protracted legal case (Google BBY and see how it happened when they went bust).
What is Pearler Micro?
Pearler Micro app is a cost effective micro-investing tool that helps educate investors in Australia through the offering of 8 diversified investment options.
Is Pearler Micro legit?
Pearler is a legitimate Australian company co-founded in 2018 by three University of New South Wales alumni: Kurt Walkom, Nick Nicolaides and Hayden Smith – you can read more about them on the UNSW Founders page here6.
Pearler Investments Pty Ltd, trading as pearler, ACN 625 120 649, is an authorised representative (Authorised Representative No. 1281540) of Sanlam Private Wealth Pty Ltd, ACN 136 960 775 (Australian Financial Services Licence No. 337927).
Does Pearler Micro pay dividends?
No. Pearler Micro does not pay dividends – it collects these on your behalf and reinvests them into the fund giving you more units. This means you will of course get your entitlement to your share of the dividends, and your Pearler Micro account will grow in value by the dividend amount. You are liable to pay tax for dividends (less franking credits) as per the Australian Tax Office regulation and will be given a yearly tax advice document from Pearler.
Do I have to pay tax on Pearler Micro?
Yes, you are liable for capital gains tax if you sell your portfolio (transfer money out of Pearler Micro) and for any dividend distributions allocated to you. Pearler Micro provides an annual tax summary to you to assist you in completing your Australian tax return, which will include any liability for dividend distribution.
How does Pearler Micro work?
Pearler Micro works like a managed fund by pooling investor capital. Each investor is allocated a certain number of shares or ‘units’ in one of the 8 portfolios depending on how much money they deposit into Pearler Micro, which is invested in the underlying ETF which itself holds the company shares. You don’t pay brokerage, but pay a small monthly fee once your balance is over $100.
How does Pearler Micro make money?
Pearler Micro creates revenue by charging a small management fee on balances above $100. However, from my analysis this revenue is unlikely to cover the costs associated with running Pearler Micro, and so I think Pearler Micro is more about bringing customers into Pearler and helping them learn about investing, with the aim of having them eventually move across into the main Pearler Brokerage platform.
How to invest in Pearler Micro?
To invest in Pearler Micro, create a Pearler account, and then under invest, select the ‘Micro’ option.
Is Pearler Micro good?
Pearler Micro is a great way to get started investing by getting a small amount of skin in the game. It is one of the best Micro investing platforms available at the moment.
Is Pearler Micro a good investment
Pearler Micro is a good way to get started investing. Pearler Micro is easy to sign up for and use, and there is a choice of actively managed, passively managed or ethically managed ETFs between the 8 fund options.
Is Raiz vs Pearler Micro better?
Raiz Invest and Pearler Micro are both great options to get started micro-investing. Raiz allows users to customise their portfolio according to individual preference (including bitcoin), however Pearler Micro has lower fees and the auto invest option which is a massive consideration. Ultimately, they are both good choices with fairly low fees, and it comes down to personal preference more than anything.
Is Pearler Micro an ETF?
Yes and No: Pearler Micro is not an ETF (exchange traded fund) itself. The Pearler Micro funds are custodial managed funds that are constructed by holding the respective ETFs.
How much should I invest in Pearler Micro?
Pearler Micro has no minimum investment, and no fees for balances below $100. Personally, if I had a few thousand in my Pearler Micro account I would look at transferring it into the main Pearler platform to avoid paying any monthly fee.
How much does Pearler Micro cost?
It is free to create an account and there are no fees for account balances below $100. For balances above $100 that hold one fund, you pay $1.70 per month, and for balances above $100 that hold two or more funds you pay $2.30 per month. This makes them the cheapest Micro investing platform.
What happens if Pearler Micro goes out of business?
If Pearler Micro goes out of business, you should still be eligible to receive your capital back, as Pearler Micro is a standard managed fund investment trust and investments are held on your behalf. However, as Pearler Micro funds are not CHESS sponsored, this may take time and it is less clear compared to the main Pearler brokerage platform which is CHESS sponsored.
How do I delete my Pearler Micro account?
To delete your Pearler Micro account you can contact Pearler support via the website, email or phone contact. Selling your Pearler Micro funds effectively closes your Pearler Micro account, and the funds are moved into your Pearler Cash account which you can then use for the main Pearler Shares brokerage platform.
How do I withdraw funds from Pearler Micro?
To withdraw funds from your Pearler Micro account, simply make a request to withdraw through your account. This should be processed in business hours and you should receive your funds within 2 business days.
Who is Pearler Micro not for?
Pearler Micro is not for seasoned investors, who would instead opt for the main Pearler shares brokerage platform. However, it may be useful for their children via Minor accounts.
Pearler Sign up code
You can find an affiliate sign-up code for Pearler Micro by Googling it, asking a friend who uses it for theirs, or potentially asking for one on most personal finance groups on social media. Due to ASIC guidance on ‘Dealing by Arranging’, I can’t provide an affiliate link for my readers anymore for any Australian investing-based services, groups or companies. However, you should still be able to get a code from another personal user somewhere online.
I am working with Pearler to see if we can get a generic sign up code that will give you all of the benefits, i.e. not an affiliate link as there is no affiliate commission.
Pearler Micro review: Conclusion
In terms of micro-investing, Pearler Micro looks like it might become my favoured Aussie micro-investing platform. This is because it is easy to use, has zero brokerage fees, and no monthly fees for any account balances below $100.
However, there is a monthly fee, which puts Pearler Micro in a similar category as Raiz Invest and Spaceship Voyager, but making it the cheapest of these three. It is important to realise that monthly fees can eat away at small balances – on a two fund $1000 portfolio, the Pearler Micro fees would be $2.30 a month or $27.6 per year, or 2.8% of the portfolio’s value – which is pretty high when we consider investing in a general sense we want to keep it well below half a percent! If we look at a 10% theoretical long term average return on this hypothetical portfolio being $100 per year, we can see the fees actually gobble up one quarter of our return, or 27.6%!
We must realise though, that micro investing is not a sensible long term investing strategy, it is purely an educational tool for those at the start of their investing journey. I personally would not keep more than a few thousand invested in micro-investing platforms due to this fee drag, and it makes sense to move them over to conventional brokerage platforms such as the main pearler platform. Another cost-effective way to continue investing on a smaller scale is CommSec pocket, which only charges $2 brokerage on parcels below $1000. However, ultimately, as you gain experience and grow wealth, moving to a low-cost execution-only broker is the way to go. I personally use Pearler due to the Auto Investing tool and the fact it can be completely automated and tick along in the background.
This is because Pearler is a company focused on helping you build your wealth without all this trading crap. Most finance companies, other brokerage platforms, confusing trading platforms or share trading platforms in the personal finance marketplace aim to make money via a brokerage fee by encouraging trading. Long term investors know that keeping a level head with your financial assets, listening to reliable financial advice and setting a target portfolio with automated investing in your brokerage account is the easy, smart and lazy way to build wealth.
Pearler Micro help new investors learn to do just that, on a small scale and at a low cost, with the aim to eventually move you to the main Pearler shares platform (that has CHESS sponsorship).
Verdict: Pearler Micro is one of the best micro-investing tools available at the moment to start your financial independence journey and education.
Along with this Pearler Micro investment app review, other micro investing platforms that I have reviewed and like include:
- Raiz Invest – An awesome tool that lets you ’round-up’ your purchases to the nearest whole amount and invest the difference
- CommSec Pocket – CommBank’s response to micro-investing tools
- Stake – A cool investing tool that lets you shop for more than 3,500 American shares and ETFs with zero brokerage fees
- Spaceship Voyager – a micro investing platform which lets you choose between three investment funds
Financial Disclaimer: CaptainFI is NOT a financial advisor and does not hold an AFSL. This is not financial Advice!
I am not a financial adviser and I do not hold an Australian Financial Services Licence (AFSL). In this article, I am giving you factual, balanced information without judgment or bias, to the best of my ability. I am not giving you any general or personal financial advice about what you should do with your investments. Just because I do something with my money (or use a particular service or platform) doesn’t mean it is automatically appropriate for your personal circumstances. I do not recommend nor endorse any financial or investment product, and my usage or opinion of any product should not be interpreted as an endorsement, advertisement, or intent to influence.
I can only provide factual information based on my journey to Financial Independence, and that is provided for general informational and entertainment purposes only. I make no guarantee about the performance of any product, and although I strive to keep the information accurate and updated as it changes, I make no guarantee about the correctness of reviews or information posted.
Finally, in the interests of full disclosure, CaptainFI was an early Angel Investor in Pearler and currently holds a $10,000 Angel Investment in the company. Please See my Net Worth updates for more detail on all of my investments (including but not limited to Bank stocks, Listed trading platforms and other public companies held within the index funds I own).
Other brokers to choose from
Be sure to check out the following reviews on brokers that offer online trading to buy Australian and international shares. As always, make sure you are fully educated before making a choice on any particular one.
Big 4 banks
- CommSec Share trading [this is who I started out investing with]
- NAB Trade
- ANZ Trade
- Westpac Trade
Fintechs and smaller banks
- Stake US Share Trading
- CMC Markets
- IG MarketsGroup
- ‘What is CHESS?’, Angela Thompson, Sharesight. Published: May 30, 2019. Accessed online at https://www.sharesight.com/blog/what-is-chess/ on Feb 11, 2023.
- ‘Dollar-Cost Averaging (DCA) Explained With Examples and Considerations’, Adam Hayes, Investopedia. Published (updated): Aug 19, 2022. Accessed online at https://www.investopedia.com/terms/d/dollarcostaveraging.asp on Feb 11, 2023.
- ‘How does PayID® work?’, PayID. Accessed online at https://payid.com.au/how-it-works/ on Feb 11, 2023.
- ‘Holder identification number (HIN)’, MoneySmart.gov.au. Accessed online at https://moneysmart.gov.au/glossary/holder-identification-number-hin#:~:text=A%20HIN%20is%20a%20unique,HIN%20on%20a%20CHESS%20statement on Feb 11, 2023.
- ‘Discussing financial products and services online’, ASIC. Accessed online at https://asic.gov.au/regulatory-resources/financial-services/giving-financial-product-advice/discussing-financial-products-and-services-online/ on Feb 11, 2023.