read

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. We help 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.

Simply buy and hold onto any ETF from one of these forward-thinking ETF managers for at least one year, and it's free.  There's 43 to browse, and counting.

You get to skip the brokerage fee when you invest, but if your situation changes and you sell some within the year, you'll be up for the standard buy & sell-brokerage ($19.00 total, 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 three 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. You sell some or all within the year and pay $9.50 plus the standard $9.50 to sell. That's a total $9.50 per transaction - still low-cost!
  3. You accumulate investments in perpetuity. You make tens or even hundreds of long-term investments into the same ETFs for free. You either never sell or eventually sell in much larger chunks for a substantially reduced blended brokerage cost. 

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!

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 gets 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, and you should consider these before making any investment decisions. Minimum purchase quantities apply and you should check our guides.

Additionally, if you request to transfer your HIN to another broker before 12 months is up, we will treat it as if you sold the asset and charge you the standard $9.50 and pass it back to the ETF manager too.

Why aren't all ETFs on pearler free?

This offer relies on the support of the ETF managers.

VanEck, ETF Securities and eInvest have really liked what we are doing for long-term investors and jumped straight on board.

We are working to increase your options, but the success of our efforts there really depend on you. 

The more you support and share Free ETFs and pearler, the better the chances of others getting on board. 

And that said, together the funds of these three managers truly has something for everyone to explore.

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 monthly investments into a Free ETF (which you could automate with Autoinvest on Pearler).

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.

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. 

Assumptions

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

Portfolio values 

Bar graph displaying portfolio values

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. You do this during your lunch break because you know that's when the market is generally less volatile.

Then let's assume you're a robot and without any stress or procrastination, and don't get distracted by red and green arrows. You update your spreadsheet and workout which ETF to invest in next.

Finally you place a market order and log out. Sweet that's, done.  You've got about 30 minutes of your lunch break left. 

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.

Download Aussie FIRE Now

We've worked with Australia’s top FIRE experts to create Aussie FIRE: The Ultimate Guide to Financial Independence for Australians.

It covers all the knowledge, processes and tools you need to succeed on your journey - from taking your first step to becoming FIRE'd!

Subscribe and we will email you a link to download Aussie FIRE and keep you updated with all things Financial Independence in Australia.

eBook cover page v2-2