A brief one today:
We recently provided one of our clients with €64,000 more than her bank.
Context: The client was introduced to us by word of mouth.
She had recently divorced.
Some weeks before her introduction to Prime Cap she had received a sterling lump sum, sent directly to her euro bank account by her ex-husband.
Her bank, AIB Private, on receiving this sterling amount, exchanged them directly and straight into Euros...without asking her or even confirming the rate of exchange.
The client approached us because she needed to send a portion of that GBP award back to the UK to her solicitors, for fees.
Maybe you can already see one of the issues for the client?
She lost a sizeable chunk of the initial GBP award because her bank used a retail rate of exchange when paying the funds into her euro account, and she now had to loose a further slice because she needed to exchange those funds back into sterling to pay her legal team.
The amount owed to her legal team should have been paid out whilst the funds were still in sterling...this would have been our recommendation and would have saved her both time and money.
However, this is not the subject of our post...this is just a pre-amble designed to give you a bit of context.
A few months after we conducted the exchange for sending payment to her legal team our client was informed that she would receive a further GBP sum.
This amount was to be paid to her directly by her solicitor rather than direct from her ex-husband. Sigh of relief; for one thing the amount could be released net of her solicitor's fees. Also, our client was now in a position to instruct her solicitor as to what to do with the GBP sum, where to send it and how she wanted it realised in the currency of her choice - did we not mention that our client does not live in the UK?
Here we come to crux of the matter:
Our client's solicitor does not recommend or refer a currency broker to their international clients - no one is directly saying they should, but, let's explain the upside of so doing...
If the client lives abroad and asks for the funds to be paid directly into their local account, unless they have an alternative they will be lumbered with a typically woeful retail rate of exchange because their bank will conduct the exchange.
For the vast vast majority of UK law firms, the currency of an award is the currency they will transmit into their client's account, understandably. So, A GBP award is sent as a GBP transmission.
It is up to the client to either ask for funds to be sent direct to their currency broker, or to a GBP account, from which they can undertake an exchange.
Knowing the margin that our client's bank applied to their previous incoming award amount, we conservatively estimated that our client stood to loose out on €64,000 if her bank were relied upon to exchange the second amount from sterling into euro.
Our commercial rate of exchange provided the client with that €64,000 in her pocket.
When we present those figures to most law firms, we are met with surprise.
We go on to explain that the accounts involved in any exchange are regulated in much the same way as a solicitor when it comes to the collection, holding and release of client money. The FCA makes sure that our currency wholesalers ring fence all funds they hold, rather than just the proportion that banks are expected to.
All the accounts we work with are segregated client-trust accounts held with Tier 1 UK mainland banks and administered by highly liquid and listed market-makers and counter parties.
So, to our point... (we're not quite there yet!)
It is not apathy that results in one's lawyer not suggesting a currency broker in appropriate circumstances. It tends to be unfamiliarity.
Sourcing new business only through word of mouth, it is our goal to be referred on to every lawyer of repute, eventually...but, that may take a very very long time.
Our business development goal is for our reputation and the good favour of our existing clients to precede us and compel our peers in the legal sector to reach out and engage with us for the good of their clients abroad...
Our services are useful to their international clients, that is a fact beyond dispute and one we can demonstrate through the use of a number of different case studies and references from both law firms and clients.
We, as a business, do not hold client funds. We work with far bigger FCA authorised institutions that do.
...and we'll go as far as to say that all clients, without exception, would be prepared to attest to the benefit derived from engaging us to whatever extent they did - and it must be said that there are instances where we simply consult on what rates a client should expect from the present broker. This is generally done on a good-will basis, but serves as an extremely valuable marketing tactic.
This is all...