You’re looking to move from Vanguard to Pearler? Great! I just made the move.
The Vanguard platform gets the job done, but Pearler has the style with more features and a clearer development roadmap. If you’re new to investing, see Beginner’s Guide To Passive Investing.
Let’s look at what’s involved in switching investment brokers.
Disclaimer, this is not personal financial advice. If you’d like to support the blog, consider signing up with Pearler via this link.
Vanguard vs Pearler – Why?
Let’s quickly go over why Pearler is worth switching to from Vanguard.
In 2021, Vanguard updated its pricing model to match other “every day” broker’s.
They charged $0 trades, now, $9 per trade, most brokers are around this price point. Pearler charges $9.50 per trade, so very similar.
Update, Stake has come on the scene reportedly charging $3 per trade for ASX trades.
Here’s a look at Pearler vs other popular platforms.
If you keep the same investment strategy, i.e. you invest in the same Vanguard ETFs, then management fees are identical.
I don’t invest in single stocks and shares, but from what I can see, there are the same options available, if not more.
Pearler also offers a variety of ETFs from companies like BetaShares, VanEck and more. If you’re looking at ETFs outside of Vanguard, then Pearler is a no brainer.
Reasons – Vanguard to Pearler
The biggest reason to switch from Vanguard to Pearler comes in the functionality of their platform.
At the time, Vanguard did not have an Android app, not a deal-breaker in itself. As mobile-friendly as their website was, it would log out quickly and provide an annoying experience. The platform itself was very basic, just offering trades with minimal assistance or innovation.
Pearler is a fresh breath in the investment brokerage scene. They’re still a start-up company, so they’re new and there’s a lot ahead for the platform. The main features are:
- The mobile app, a clean experience.
- Joint accounts, the ability to share investments with a partner.
- Auto-invest, as the name implies, is automatic investing.
- Socials, ability to see other investment strategies.
Also, be aware that Pearler is a new company in the investment space. Compared to Vanguard, a much older company built by John C Bogle years ago. Generally, newer companies can innovate and adapt faster but have a higher risk of attaining success.
A big difference is how Vanguard and Pearler are structured. Vanguard is a custodian broker and Pearler comes under CHESS. This means Vanguard technically owns your stocks and shares where Pearler does not, you do.
Despite Pearler being a smaller, newer company, their structure and outlook make them a clear winner for investing.
Another difference comes in how each broker handles dividends, more on that soon.
Making The Switch to Pearler
Great, now we’re ready to make the switch from Vanguard to Pearler, let’s go.
Step 1, set up a Pearler account by following this link and the on-screen instructions. It’s painless, just have your driver’s licence on hand and follow the prompts.
Step 2, transfer stocks. Don’t sell your shares on Vanguard, withdraw the cash to your bank, then deposit the cash to Pearler and THEN invest. You’ll be hit with multiple trade fees, especially if you’re investing in the same ETFs, you can simply transfer.
Go to Vanguard and complete this form, then contact their support and explain you’d like to transfer. They’ll forward that to the team responsible for this who will get you to complete another form confirming the details, then you’re all good.
Step 3, wait for transfer. This process can still take a couple of weeks depending on the back and forth. If you need the money fast, you can always sell, just be aware of those added fees.
Dividends via Pearler
Step 4, set up dividends. Yeah, this step gets its whole dedicated section.
Dividends are payments from companies you hold shares in. The company e.g. Apple, decide how much from their profit they can spare to investors.
Currently, dividends cannot be paid into your Pearler cash account. Instead, you can nominate (via the share registry for your stock) whether to pay it directly to your bank account or nominate it for dividend reinvestment.
A ‘share registry‘ is an organisation that, on behalf of a company, manages the registry of shareholders for that company. For example, ETFs VAS and VGS use Computer Share as their share registry. So, sign up for an account, follow the prompts to get set up.
Now it’s up to you and your strategy, do you want an income from dividends? Would you like to reinvest them?
Click the My Profile button located on the right-hand side of the Investor Centre home page and then click on the ‘Update’ button under ‘Reinvest Dividends’ and follow the prompts. Or, go to My Profile, Reinvestment Plans, Select ETF, Apply Full Participation.
This is known as DRIP. Instead of receiving dividend payments via cheque or into a bank account, Computershare’s DRIP enables the shareholder to buy additional shares with dividend payments and build their portfolio.
Sharesight – Integrated with Pearler (TBA)
Step 5, set up Sharesight. This is something I’m yet to do, so I’ll come back to this soon. Basically, as I understand it, Sharesight is great for tracking your investments for tax purposes. As I said, I’m yet to do this and I’ll be back.
Pearler – Final Thoughts
Pearler looks to be an amazing platform in the making. Given it’s still new to the space, the team have done an incredible job so far building a platform and community.
I haven’t mentioned the team behind Pearler enough! They’re fans of the Barefoot Investor and the FIRE community. That lays the groundwork for a platform built right for the long term Aussie investor. They don’t encourage gambling like games, it’s the true, slow growth to Financial Independence (FI).
Subscribe or follow me for a full review of Pearler, I’d like to go through with a fine comb and look at everything Pearler is doing right and wrong.
If you’d like to support the blog, please consider signing up to Pearler via this link.