1. Why use a specialist currency broker and not a bank?
Specialist brokers (like HIFX) exist to provide a better rate of exchange than a bank and also a strategic educational service. Large currency brokers turn over enough currency to buy at similar levels to the big banks. However as brokers do not provide any service other than buying and transferring your currency their overheads are very much reduced compared to that of a high street bank. They therefore can pass on a more competitive exchange rate and will not charge for additional services. HIFX provide a free service to Anglo Pacific customers, for all currency transactions, wherever in the world. The educational side of the process is vital. Clients often do not have to buy their currency straight away and/or do not have funds available, as their money may be tied up in property or investments. Unlike a bank, specialist brokers will deal with thousands of "migration" clients. Some like HIFX will even have a dedicated Migration Desk. They will therefore understand the complexities and long timeframes of the migration process, which a bank may not be aware of. Specialist brokers will also allocate each client their own personal dealer, so that they have a good understanding of the client's personal circumstances. Once a client has understood the basic characteristics of the currency they are interested in it will enable them to make the most informed decision when they need to trade.
The service HIFX provide is free for Anglo Pacific customers and carries no obligation to trade until instruction is given over our recorded telephone lines.
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2. What are my options when buying currency?
There are three options available. The easiest way to look at these is in relation to a client's attitude toward the current exchange rate. If the client is "happy" with the current rate or if the client is "not happy".
If the client is "happy" he has two options. The first is called a "spot transaction." This is when the client simply fixes the exchange rate straight away and pays for the amount in full. The funds can then either be held on account or sent abroad to the specified destination bank account.
The second is known as a "forward contract" or "buying forward". In essence this means that clients can buy the currency now, and pay for it later (when you are ready to leave the UK or receive funds from your house sale). The client will be required to pay a 10% deposit straight away and the 90% balance upon the maturity of the contract. For example, if a client wants to buy £50,000 worth of Australian Dollars but does not need them for 3 months, they can agree the exchange rate now, place a £5,000 deposit, and pay the remaining £45,000 balance in 3 months. If the exchange rate moves at all in that 3-month period this will not affect them as they have bought currency at the originally agreed rate.
The third option is for a client who has been calculating their finances on a particular exchange rate at a rate of exchange above the current rate.
This client is therefore "not happy" and could employ a "market order". A "market order" is available for clients buying more than £20,000 or the equivalent in another currency. It is an order in the market to buy currency, placed higher than the current rate, and if triggered the currency will be bought automatically. However there is no guarantee that this level will be achieved as no one can predict future currency movements exactly.
Remember: You are risking your future wealth! Without fixing the exchange rate or taking out a 'forward contract' at the outset, you are taking a gamble.
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3. How do I physically buy the currency through HIFX?
The first thing to do is set up a trading facility. This is done by registering with HIFX. Registration with HIFX is free and carries no obligation to trade until clients give their firm verbal instruction over our recorded telephone lines. The client needs to sign the HIFX terms and conditions, and provide one piece of photo ID (a copy of the passport picture page or photo driving license) and one proof of address (dated within the last 3 months i.e. utility bill or bank/credit card statement).
This can be done on the HIFX website. Registration should be straightforward and we therefore do not require any original documents; photocopies are acceptable and the documents can be faxed, posted or e-mailed.
Once HIFX has received the client's documents their personal dealer will contact them. They will discuss their requirements and put some strategy in place. When clients are ready to buy their dealer will confirm the exchange rate over the phone and ask the client for their firm verbal instruction to buy. Once this has been confirmed the currency will be bought there and then. (NB There is no additional commission to pay to HIFX, everything is included in the rate given by the dealer. HIFX make their money on the difference between where they buy their currency and where they sell to their clients.) The client will then be emailed or faxed and automatically posted a "contract note." This is a two-page document and confirms the trade exactly. The first page will state the trade details and give the client the amount of sterling (or other currency) that they need to send HIFX. (This is best transferred electronically from the client's bank or over the Internet or if less than the equivalent of £50,000 the client can send a personal cheque.) The client is given the secure HIFX Client Trust bank account details at Barclays Bank to deposit their funds into. HIFX will need to receive these funds within three days. Once the received funds are cleared HIFX will transfer the funds without charge to Anglo Pacific customers.
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4. How long does it take to transfer the funds abroad?
Once the received funds are cleared (assuming before midday on any working day), the bought currency is then transferred that day and will be cleared in the destination account (assuming the currency is going to Australia / New Zealand) within 5 working days (this is due to some receiving banks taking longer than others to clear funds). Confirmation of the funds having left Barclays in the UK is automatically sent by Barclays to clients by email, post or fax.
To register with HIFX or read more about currency purchasing strategies click on the link below.
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