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Free ETFs with Pearler

By Nick Nicolaides

Partnering with like-minded ETF managers to do something extraordinary!

We are the online broker for long-term investors. Where people build wealth together and achieve goals sooner. 

A little something that might help is free ETFs... 

How it works

We’ve partnered with like-minded ETF managers to make it even easier to invest more regularly, meaning less time sitting in cash and more time in the market. The folks at eInvest, ETF Securities and VanEck have stepped up big time.

We're doing this so long-term investors get to invest in these ETFs for free and it might just be something that helps convert many more people to think longer term. Simply hold onto these ETFs for at least one year, and it's free.  There's 43 to browse, and counting.

Skip the brokerage fee when you invest, but if your situation changes and you sell some (or all) within the year, you'll be up for the standard buy & sell-brokerage (just under $19.00 all up or $9.50 per transaction).

The maths

So right now, let's say you invest $1,500 worth of an ETF, you'll pay $0.00 instead of $9.50. There are only two ways it can go from here:

  1. Hold for longer than a year and then sell, you'll only pay the sell brokerage for a total $9.50 cost to buy & sell. Over time that's a blended $4.75 per trade!
  2. If you happen to sell some or all within the year you'll pay $9.50 plus the standard $9.50 to sell. That's a total $9.50 per transaction, still low right?!

Who pays who and when (and who is really benefiting)

OK there are three parties involved in this relationship:

  1. You, a champion long-term investor
  2. The ETF manager, a champion of diversified investing 
  3. Pearler, a champion of long-term investors and ETF managers alike

When you invest in a Free ETF, the ETF manager pays pearler the standard $9.50 on your behalf.  So pearler gets its normal brokerage; no more, no less.

If you happen to sell some within a year and pay the $9.50, this money goes back to the ETF manager, pearler doesn't double dip! Same goes for HIN rollovers to other brokers...

Surely someone is getting a kick back? Nope. It is one of the few equations in personal finance that is truly win-win. 

  1. You save a little money and can invest smaller amounts more regularly
  2. The ETF Manager gets an awesome new investor that wants to hold their ETFs long-term 
  3. Pearler get's its normal brokerage... plus the warm and fuzzy feeling of helping You and the ETF Manager get together

To be super clear, all ETF managers will still charge management fees in their funds over time, which you should consider before making any investment decisions.

Why aren't all ETFs on pearler free?

This offer relies on the support of the ETF managers. VanEck, ETF Securities and eInvest who liked what pearler was trying to do for long-term investors and didn't hesitate to get on board. Amongst their funds there is truly something for everyone to explore.

Of course, the more Free ETFs on offer the better for you and so we are still working to increase your options. You are the most important part of the equation, the more you support and share Free ETFs and pearler, the better the chances of others getting on board. 

What Free ETFs could mean for your portfolio

To show how investing smaller amounts at a higher frequency can impact long term performance, we've modelled a pearler investor Autoinvest'ing monthly into a Free ETF. Then we compared that to an investor buying the same ETF every three months on a low cost broker and every five months on a big 4 broker, keeping the brokerage cost at 40Bps or under. 

Let's talk about your hard earned dollars.  On pearler you end up with $2,243 more than a low cost broker and $4,002 more than if using a big 4 broker. We've stepped it out below. 

Portfolio values 

Bar graph displaying portfolio values

Assumptions

Comparison and consumptions of pearler's free ETFs vs. a low cost broker vs. a big 4 broker

And as for your precious time? Let's assume that in addition to investing in Free ETFs you automate your strategy with Autoinvest. Dreamy. To calculate your time saved, let's look at the traditional online broking process.

In the interest of fairness, let's assume you set up a direct debit from your bank to your brokerage account...

Once the cash has arrived, you log in to your brokerage account and put an order in. To get more specific, make sure to do this during your lunch break when the market is generally less volatile. Then let's assume you're a robot and without any stress or procrastination, without being distracted by live pricing in red or green, you place a market order and log out...  That roughly takes 30 minutes each time.

Investing every three months with a low cost broker, you'll make 40 investments over 10 years and spend 20 hours of your life putting orders on.  Sure, you'll only waste 12 hours on a big 4 site investing every 5 months, but you have to deal with an interface that hasn't changed since we were scared of Y2K.  As if new years eve 1999 being nearly 20 years ago isn't scary enough.

Thanks

We are working every day to improve the platform, improve your investing experience and help spread the financial independence movement. We're excited to be working with some of the top ETF managers in Australia, who are not only taking real steps to help retail investors get ahead, they're also supporting pearler. Thanks go out to eInvest, ETF Securities and VanEck. And thanks for reading.

Yours sincerely,

Nick

Cofounder, pearler

 

At Pearler, we pride ourselves on the quality of the financial advice we give. Please note though, that this advice has not been tailored for you. You have unique financial goals, circumstances and needs which may make this advice inappropriate, and it is important that you know whether it applies to you. If you are unsure we urge you to speak to someone you trust who is competent with money and understands your individual needs.

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