For many, investing is seen as the domain of tech bros, finance wizards or math savants.
So, where can normal, everyday people turn when they want to sensibly grow their wealth?
Thanks to Hayden Smith, COO and Co-founder of Pearler, now there is a place for the rest of us to invest. At Pearler, he’s created a community of confident investors who are achieving long-term success and gaining some much-needed financial education.
In the latest episode of Payments Innovation, we discussed:
- The evolving world of investing with confident, educated investors
- Millennials and Gen-Zers becoming more engaged in their investing
- Demographic insights from Pearler’s user base — and their team
- How Pearler and other Fintechs weigh whether to launch abroad
Investments sussed for the rest of us
Globally, investment trends are shifting.
New generations, enabled by innovative technology, are dabbling — and succeeding — with creative new ways to apply sound investing principles to get the most out of their money.
While there are many tools out there for the would-be investor, many of them are geared towards hardcore traders, leaving everyday people behind. But that’s changing.
In fact, this paradigm is why Pearler exists. Everyone should be able to avail themselves of the innovative financial tools offered by today’s technology.
Hayden says his primary motivation for founding the company can be traced back to when he was just a kid. Growing up, it struck him that income and wealth weren’t as correlated as most people would assume.
In trying to pinpoint why some people had better outcomes than others despite similar jobs in similar neighborhoods, he realized that financial literacy and the resulting habits were a much larger factor in financial success than, say, which profession people work in or the effort they put in. People are too afraid to dabble in the stock market, storing their wealth in low-yield savings accounts and spending beyond their means — these are just some of the negative impacts when financial literacy is lacking.
“I would see people that I care about work extremely hard, use their labor and their time to try and build wealth and pay bills, but they always seemed to fall behind the people who knew more about money,” Hayden says. “We have a world where your outcomes are — at times, and to different degrees — driven by your relationship with financial literacy more than your motivation and effort in life.”
At Pearler, Hayden is helping people gain financial literacy and grow their wealth with smart investing strategies. Investing strategies that don’t require enough math skills to solve the Hodge conjecture or spending 24/7 tinkering with your portfolio.
It’s a community for normal people who want to maximize their returns without dramatically altering their lifestyle.
Generational investing trends
While Pearler is a community for anyone interested in investing, the average user tends to trend young.
By and large, most of the company’s user base is under 50, concentrated mostly in the millennial and Gen Z cohorts. And Hayden has been able to draw some intriguing insights into the financial motivators for these generations (among those that would be drawn to Pearler in the first place, that is).
Gen Z are just starting to learn more about investing and the everyman approach Pearler takes provides them with an avenue to experiment comfortably without needing to master every facet of the market. They may have smaller amounts of money to play with, but this cohort is fantastically tech-savvy and curious — so they’re learning at lightning speeds.
Millennials, on the other hand, are more affluent and are hitting the stage in life where they are militant about making their money work for them. As such, they tend to put in higher-volume investments in the hopes of saving for retirement and their kids’ futures.
Pearler’s demographics may skew slightly younger, but otherwise, the company’s data shows that its mission to serve everyday normal people is working. For instance, women — who traditionally make up a smaller share of investors — are achieving parity with men in the company’s user base.
While this outcome is extremely welcome, Hayden stresses that the company isn’t geared to draw in any specific demographic:
“It’s a lot less about ‘How can we really build a platform for women?’ It’s more like, ‘How can we build a platform that keeps the tech and finance bros away?’”
It’s more proof that creating a venue for everyday investors is a worthwhile venture. It’s investing for everyone, which fosters trust — it’s a community, not just flashy tech for experts or industry insiders.
“We want to use technology,” Hayden says. “But not in a numerical sense — in a much more personal, human sense.”
One factor in how Pearler has been so successful in building trust and establishing such a diverse user base of everyday people can be seen in its own demographics.
“Our company is made up of financial novices,” Hayden says. “And that helps us because we don’t have to spend a lot of time thinking about how to create that kind of culture, brand or philosophy because everyone in our company is just like, ‘I don’t know a lot about money. So let’s approach it like that.’”
Of course, they have the requisite knowledge to run the company, obviously — but they aren’t the crypto traders spending every waking moment worrying about the market. They are normal people, too.
That’s why it’s a community. It’s why everyone feels welcome at Pearler.
Well, except maybe the tech bros.
Fintech: home and away
At Pearler, a question often comes up from investors, employees, customers — pretty much everyone:
Where will you venture next?
For the Australian-based company — and innumerable global Fintechs like them — it’s a salient one. There is often a tension between serving the market in which a Fintech was born and expanding to new overseas markets that allow for a much larger pool of potential users.
While Pearler has its roots in Australia, there is an upper bound to how many users they can realistically acquire there. Staying means they’ll never gain that coveted unicorn status.
On the other hand, if they leave, they will have to deal with a whole new set of regulations, different banking systems — radically different infrastructure, even. In many ways, it’s like building a unique new product.
Yet, more and more Fintechs like Pearler are launching in overseas markets these days, despite the uncertainty in doing so.
Ultimately, the potential rewards outweigh the risks — and in the long run, that makes for even more happy customers and more choices in the markets.
And that’s how the future of Pearler — and Fintech as a whole — will be shaped.
Until next time!