Moving abroad doesn’t have to be taxing

International finance

A leading foreign exchange specialist explains how substantial savings can be made when transferring funds overseas
 
Every year, thousands of people leave the UK in search of a better life abroad. Better value property, sunshine and the cheaper cost of living are some of the many attractions – but it’s not always that simple. The legal and financial aspects can, and have, caught many people out.

Exchanging currency and moving money is the first thing to consider. Naturally many people turn to their bank and find, in many cases, their exchange rates are uncompetitive – especially with the current financial crisis. Individuals need to manage their currency exposure. The financial meltdown has created movements in the value of currencies that are both extreme and rapid. In the past three months the UK has seen sterling fall over 20% with no signs of abating - mostly on the back of disastrous news. All that is required for the value of sterling to reach $1.40 is a further 12% fall in value, a fall that has already happened in the past month. There is a very clear downwards trend and with any negative sentiment relating to the UK it is certainly possible, if unattractive, that these levels are reached.

Managing your currency exposure presents an immediate cost saving route for individuals. Banks, the first port of call for many, rarely offer the best value for money or service when it comes to foreign currency exchange. Specialist currency houses not only give companies better exchange rates, they offer a more personalised and efficient service. In a deal worth £200,000, Caxton FX can save a client upwards of £830 (when using Lloyds TSB) and several thousand pounds less than Barclays, HSBC and Natwest. Individuals can save thousands, compared to the costs of using their bank. When you add up the overall savings across a two or three year period, you get a significant figure.
 
Cutting cost

But it isn’t just about the cost. The exchange process can appear complicated and a specialist can reassure clients by explaining each step. Clients understandably want to know how it all works. As part of the service we make the whole process very easy to understand. Whether you are exchanging £5,000 or £5,000,000 you will receive the same benefits and service. Caxton FX moves millions on a daily basis and has thousands of clients who have trusted their funds to a company that offers value and service.

Natwest vs. Caxton FX

In focus

*Source: GSA Business Development, survey conducted 14/02/08

Registering with a foreign exchange specialist is a straightforward and simple process. Any business looking to protect itself from the recession and save money on their foreign exchange is eligible to register with a currency broker.

How it works

Currency specialists make your exchange simple and worry-free. No new banking arrangements to make or call centres to deal with – you get to speak directly to an expert. Here’s how it works at Caxton FX:

Opening an account

You can open your account by post, fax or on the web without cost or obligation. Simply fill out an application form or complete it on the website (www.caxtonfx.com). Then send or fax it back with a copy of your passport and a utility bill. Your application is processed and, in most cases, your account is opened within a few hours.

Call for a quote/fix a rate

If you wish to exchange funds, simply call your account manager and they will quote you a rate. If you wish to proceed, they guarantee the exchange rate on the phone and confirm it in writing – via email, fax or post.

Sending the funds

The funds will be transferred by priority system anywhere in the world. Unlike banks and other companies, there are no transfer fees to be paid, whatever the size of the transaction. If required you can be provided with authenticated verification of the transfer, free of charge.

Tips on currency transfers

The key to a successful currency transfer is preparation. Ensure all your money is ready to transfer – doing more than one deal will push up the cost. A better exchange rate will also be received when more money is transferred.

You will need to open an overseas bank account to transfer your money abroad, which is usually a straightforward process. I would recommend making initial enquiries with your UK bank provider. Make sure your bank can transfer it all at once, as some banks have limits.

Comparing rates with different currency specialists could save you thousands – try to compare at least three. Some brokers will try to tempt you to sign with a competitive quote before you register, but then give a completely different rate when it comes to doing the deal. Keep an eye on the interbank rates and make sure you ask if they charge commission (they shouldn’t.) Do some research before dealing with a company – ensure they are experienced and know what is happening in the markets.

Lastly, make sure you do not let your emotions dictate your decision to complete any deal. The market is extremely unpredictable and, more often than not, will work against you. If you have an experienced account manager, listen to their guidance and do not let fear or greed make a decision for you.