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  • Client: "My bank is pretty good", Me: "What does that mean...?"

    I don't want to get too Carrie Bradshaw about this blog, but, sometimes simple conversations with my contacts throw up interesting topics deserving of expansion. A Paris based property consultant has a US client. The client's purchase is due to complete a month from now. The consultant calls me because, in conversation with the client, he was told that "My bank is pretty good, they give me the spot rate...". The consultant just wants to confirm a) what that expression means and b) whether there is still merit in suggesting the client speak with Prime Cap. My reaction was to wince. When someone tells me their bank gives them the 'spot rate', the 'day rate', 'two pips off', a 'good rate' etc etc etc. I immediately question what it is that has defined the rate they're offered as any of those things. How does one know a rate if 'good' if one has not compared it against a rate that is good? Often I find that a client is comparing their bank's rate to a tourist cash rate...the sort of thing one might see at the airport. So, of course, any bank is going to seem competitive when pitted against a bureau de change. First one thing, a 'spot rate' is an expression that relates to the contract being used for a transaction, not to the level of competition of the rate for that contract. So, one's bank saying they're offering you the 'spot rate' is like them offering you a "repayment mortgage"...and you wouldn't blindly take a repayment product without knowing the interest rate! So, how to respond to this consultant's perfectly valid question. The first thing to say on that front is that, from experience, sophisticated clients don't like to be told that what they think is competitive, accurate and valuable might not be. So, I suggested my contact take a different approach. Because, in a relative sense, very few banking customers in one country actually sending money internationally, the foreign exchange services available to individuals at a retail level are limited to very vanilla transfer capabilities. There are extremely few variations to the simple login, get quote, exchange and send process that characterises most foreign exchange dealings with one's bank. Therefore, the products and bespoke contracts companies like Prime Cap can broker are an important lure, particularly when it comes to property. Presenting the client with a contact able to discuss the fixing of a USD to EUR rate of exchange for the four-week window until his completion means that the consultant needn't be drawn on price or whether or not a bank is or isn't competitive on the rate of exchange...the product and it's rarity is the lure, not the price. The solution is what's for sale. Needless to say, if you have a client who you think could benefit from a bit of help with currency, but you're not sure how to splice in a recommendation, I'd be happy to talk you through how you could present a firm like us to them. The colossal cynic in me believes that banks benefit inordinately from a lack of understanding on the part of retail customers. Take a client who recently told me their bank was 'good'..."i get a rate '2 pips' from what see online." I thought this an odd thing to say. For one thing, as a broker, Prime Cap enjoys a rate 2 pips from the market from our largest market maker. We place millions of dollars worth of business with this API annually, and they are a multi-billion dollar business. Has my client been harbouring wealth I know nothing about? It turns out my client has confused two pips - which is the difference between 1.20(00) and 1.1998 with two cents. He was seeing 1.20 online and receiving a rate of 1.18 from his bank. Whilst not grossly uncompetitive, 1.18 is more than 1.5% less competitive than it should be - and my client thought he was getting extreme value simply because of errant use of a financial expression. Another client went into Barclays bank to ask for a rate of exchange. They wanted to send sterling to France. The cashier mis-read their daily pricing screen and told the client a rate for exchanging for selling euros into sterling...the upshot of which was that the client thought Barclays were offering him a better rate than I was for the exchange. We had an odd conversation - during which I questioned my own sanity slightly - but, I advised the client to 'bite Barclay''s' arm off. It was only when he asked to proceed that the cashier's error was revealed. +44(0)203 417 5781 | |

  • Textbook use of a forward contract for a London Property Purchase.

    Extremely useful, deftly administered and beyond valuable to our client. This post will tell you how and why a forward contract is an essential consideration for any private client buying into or exiting the London property market using a foreign currency. One thing I am extremely keen to impress is the extent to which simple logic and devastating reason compel both agents & solicitors to suggest these types of contract. There is simply no downside and, as I will go on to explain, were one dealing as a UK buyer and holder of sterling, one would still do everything one can to fix, cement, solidify and protect one's or non-GBP holders deserve and will benefit from the same tools but they have next to no exposure to them. So, our client, 'Mr Snooks' is selling his apartment in Brussels and relocating to London. (For the sake of the families, the names and locations have been tweaked...but the figures, dates and such are all from a real matter). Such is the Belgian sales process that once he has progressed beyond the UK equivalent of the exchanging of contracts, he stands to receive a significant sum if his buyer withdraws. This is crucial and serves as a form of protection for him. He puts in an offer on a house in London. The offer of £4,300,000 is accepted and things move swiftly forward. Prime Cap is introduced to the client by his solicitor a week after the offer is accepted. His solicited was in turn proposed by the estate agent selling the house. This is entirely common and (dare I say it) serves to emphasise both the speed with which buyers need to act as well as the speed with which brokers like us can react. One thing to note at this point is that the estate agent referring the conveyancing solicitor does, as a brand, have a formal partnership with a foreign exchange company. Evidently that relationship was never mentioned to the client - but, good for us! One week after the £4,300,000 offer was accepted the pound had risen by 5% in value. Therefore, the Belgian buyer realised (or was forced to confront the fact that) he needed to find an additional 5% more euros from his own sale in order to proceed. Fortunately, his apartment had a sale price of €9,000,000, so he was comfortably covered, but, no one of sane mind would welcome a price increase of €25,000 in a single week. To further unsettle the buyer, offers and deadlines were under discussion at a particularly volatile and unpredictable time for rates of exchange. All of the above was set against the backdrop of the UK's intended October 2019 EU departure date. The buyer works in private equity. He is au fait with the potential for sterling to move in his favour and against him and, thankfully, he had reconciled himself to the certain need for mitigation of any exposure to such changes. He was content to fix a rate and forego any potential for the euro to rally in his favour, such was his eagerness not to have to worry about the opposite occurring... ...but... ...the buyer had yet to exchange contracts on his purchase. Sensibly, if not frustratingly, he did not want to commit to buying £4,300,000 for a property he was not yet contractually obliged to pay anything towards. Sensible yes, potentially costly, of course. As well as not yet reaching the point of exchange, the completion date (a crucial facet of any forward contract pricing exercise) had yet to be determined. This meant that one (we) couldn't yet confirm to the client what rate they might expect were they to lock-in. We do model these sorts of transactions. Think of it less as gold, silver and bronze and more of a now, near-term and long-term. The price for use of the product does not go up the longer the contract, but, the rate does get less competitive (so, swings and roundabouts I suppose). One option might have been for the client to say "I am relocating to London, I know what I want to spend, therefore I will take a forward contract to protect me until the money from my Belgian sale has been realised, at which point I will pay for the £4,300,000 I've bought. C'est tout!" Another option would be to take out as long a contract as possible (24 months) and to simply exit it as and when a property was found and bought. This would have been far more costly to the client because it would have meant buying that £4,300,000 at a price far removed from the present trading price of the pound...and yet, were the client convinced that the pound would strengthen by any considerable measure over the next 24 months, the buying of the £4,300,000 on such a long-dated contract might very well seem more and more sensible in line with GBP's appreciation. Anyway, my advice tends to be "wait until you exchange" before entering a forward contract - I caveat that in this example by saying that it depends entirely on the preferences of the client, and I have to make sure I'm entirely sympathetic to the client's appetite for risk (amongst other things). Whenever we enter into a forward contract I must confess to secretly hoping that the currency being bought (the one we're worried will rise and therefore cost a client more) rises fast and hard and stays high until the purchase completes. I try to make sure that the client is totally reconciled to the fact that the currency they want may drop in value, in which case they are committing themselves to a contract that costs them more when all is said and done than simply exchanging 'on the spot'. By and large, I make this plain enough for me to rest easy that the client is, in fact, using a forward contract because they don't want to pay more...the fact that they could have paid less is less valuable than knowing that the costs are fixed...and I am happy with that being the case. Now to the numbers - after which I will wrap this up - the numbers are why you're still reading (I can tell!). I shall now be precise. The client secured the house for £4,300,000. At the point of exchange of contracts, we sent £430,000 directly to the client's solicitor using an exchange rate of 1.16. Simultaneously we bought £4,700,000 at a rate of 1.1630 for a contract running from 29th October 2019 until 3rd February 2020. Things to note: 1 - the contract was taken out just days before the UK was due to leave the EU. Notwithstanding an overwhelming eagerness to make sure he was not going to pay more, the client feared that an extension to the negotiation period would see GBP increase in value...further adding to his costs. He was of course correct. 2 - the client bought £4.7 million rather than simply £3,870,000 (the purchase price less the deposit amount) - this was to allow for refurbishment works on the property, plus additional expenses. Rest assured we have connected him with a number of our trusted interiors clients/contacts. 3 - The date of maturity for the contract was 3rd February. In actual fact the date of completion for the purchase was mid-January, but, I tend to er on the side of pessimism and suggest adding in a week or two to the contract length so as to afford all parties wiggle room. Had the client's Belgian property completion been delayed, or the purchase in London taken longer, he would have been grateful for the provision. 4 - the difference between an 'on the spot' (aka instant) transaction and a 3 month forward was all of 30 pips. 30 pips (30 thousandths of a cent) is a sliver. A hair. It is next to nothing. Is it a price or premium worth paying for the certainty that your property cannot go up in cost by what was (at the time) expected to be as much as 10%! 5 - at the time of booking the contract, the client had no idea that there would be a general election in the UK before the end of the year. When that was announced I was telephoned with glee by the clients wife who thanked me for my part in ensuring her husband could watch the result as nothing more than an interested spectator rather than a party with real money in the game - the contract had made sure he (they) would be unaffected by any of the various potential outcomes. What we are selling really is Peace of Mind. Let's suppose the client hadn't the means or the sense to use a forward contract... At 10 pm on 12th December 2019, the client would have seen the potential, as far as he was concerned at the time, cost of his UK purchase rise by over €162,540. And, it was predicted by banks like HSBC that GBP could see a rise of as much as 10%...which would have added an additional €450,000 onto his bill. Thank goodness he wasn't left to stress over this himself! Throughout much of January 2020, the pound rarely fell below 1.17 at an interbank level - (interbank means without the inclusion of a banker or broker's margin - and is the rate you see when you Google a rate of exchange). So, at a minimum, my client saved himself €32,900 and, at most, his costs could have been up to 6% higher than the topmost level GBP reached between October 2019 and January 2020 (over €600,000) because clients without a strategy and with a 'wait and see' mentality tend to act only when their position has grazed the 'worst-case' sign-posts. And, when you consider that the client incurred legal costs of £10,000, the fact that the contract he used provided him with an upside of 3 times that simply adds to my unambiguous endorsement of such measures. Je vous remercie de votre aimable attention. +44 (0) 203417 5781 | |

  • Private Office Services | What does this mean when it comes to currency?

    Whilst we invite correction, we consider 'Private Office' to mean activities and undertakings on behalf of an individual or family by a team of support staff, be they domestic administrators, personal or executive assistants, financial and fiduciary managers or property and portfolio management professionals. Consider the term so, here we provide 5 examples of payments that can be delegated to a dedicated payment provider like Prime Cap. :: 1. Insurance premiums and renewals. :: Once broker or underwriter have confirmed settlement account details - details of the account into which a premium should be paid - representatives can manually upload beneficiary details to the Prime Cap platform or simply ask the client's personal broker to do the same. On the day the premium is due to be paid, or days prior should that suit, Prime Cap buys the GBP amount owed and invoices the client. The foreign currency sum is then sent to Prime Cap, who settle the outstanding amount directly and provide confirmations as to the execution of that action. :: 2. Rent Collection. :: Whether working with an appointed or dedicated lettings or property management company, collecting rent personally in the UK , or permitting tenants to pay direct in a foreign currency, Prime Cap's expertise as a collection and exchange service means not only greater visibility over the flow of funds, but also a higher yield through our commercial rates of exchange. All income collection and repatriation services are bespoke to the source and the destination of funds. Serving as conduit between you and our carefully selected payment partners, we can advise on potential fees that your bank might apply and ways in which these might be obviated to your financial advantage. :: 3. Tuition and School fees. :: Whether paying for tuition annually or on a term by term basis, more of your own money remains with you when you engage a broker like Prime Cap because the rates of exchange at which we operate mean that you pay less to achieve the same foreign currency amount. A family's finance manager, once duly appointed and authorised, can liaise with the Prime Cap team to ensure that the more competitive rate of exchange is applied for all payments to an academic institution. Additionally, top-up, sundry and expense related payments can be executed at a moments notice anywhere around the world through our secure online platform. Parents are provided with enhanced visibility and can see the precise time and date of both bookings, execution of transactions and the arrival of funds. :: 4. Property sale and acquisition. :: As we have said before, the acquisition and disposal of real-estate assets across boarders and by and for families living and working around the world lends itself persuasively towards reliance on foreign exchange specialists to maximise value. Prime Cap's 'View Only', 'Execution Only' and "Fully Managed' ensure that clients know what to expect regardless of the way they want to use our award-winning services. For private office entities Prime Cap can liaise and interact with stakeholders across each phase of a transaction - whether that means including conveyancing solicitors on deposit and and balance payment notifications, or taking automated instruction to execute. Making sure that each account holder has their own currency broker on hand, our service is like no other. It could be argued that providing clients with access to the full suite of Prime Cap resources overestimates the appetite of our customers, but, experience has taught us that giving you access to a person as well as cutting edge tools and resources is the most efficient way of maximising both value the user experience. :: 5. Personal and family treasury. :: Prime Cap and our transaction partners do not engage in speculative currency transactions. These are exchanges of currency conducted specifically with the intent to sell back the currency at a price which realises a profitable position. Those families and individuals who wish to hold capital in a variety of currencies are however able to use our exchange capabilities to maximise the value in their rate. If you hold funds in one currency and identify that the prevailing market rate is desirable/favourable you can use Prime Cap to exchange funds into that currency. Essentially this is treasury related and, provided your exchange is not conducted purely to flip the payment back into the original currency should the rate move, we are more than happy to assist you in your FX undertakings. Many of our private clients find it more economical (both from a cost and a time perspective) to login to the Prime Cap platform to move even their same currency payments. Consider, your bank charges between £16 and £32 to send sterling to accounts outside the UK. Prime Cap can reduce this expense by no less than 30% and in some cases by as much as 60% - all with same day settlement, tagged and tracked flow of funds and an experienced advisor at the end of the telephone. We welcome your call. | 02034175781 | #privateoffice #treasury #tuition #overseasstudy #insurance #premiums #renewals #buyingahouse

  • Working with a foreign buyer? Our involvement from start to finish.

    What follows is a simple 'day in the life' of an estate or search agent who has a friendly and responsive currency broker on speed dial. Whether you've been retained to find that UK house for your buyer, or they walk in to your branch cold, it is not too early to introduce a service like ours and there are various touch points during the UK buying process which could be appropriate times to reaffirm the benefits of our work. If we assume that your foreign buyer is already living or working, or living and working, in the UK then they may well be moving money to and from their UK current account already! Why not let them know you have a London based service partner who caters for private client currency exchanges! Regardless of whether or not your first thought is of Prime Cap, it is perfectly fair for us to suppose that one of your due diligence questions might be to confirm whether your buyer needs to bring funds ( a foreign currency amount) into the UK for the purchase. Our goal is the position ourselves so that, once you have identified that you buyer may be moving some money internationally, you feel happy to suggest they speak with a specialist in this area; one that you know, like and trust. Dare we say it, tell your client that you 'know someone'. A specialist. A trusted, personal, boutique outfit that only works with private clients. They're a reputable and award winning firm and you know them personally. Would the client like to be connected by email? If so, then, please do. Alternatively|simultaneously, you message the team at Prime Cap noting the name of the buyer, a short overview of their brief and whether they have Ok'd us to call and introduce ourselves or that we should simply keep and eye out for their approach to us. First and foremost we are fabulously useful to your buyer when they're calculating how many pounds their foreign currency can be exchanged for against the live, real-time foreign exchange market. This is useful even before any offer has been made, let alone accepted, and our rates are often incorporated right into the very calculations done by buyers when they're working out what they can in fact afford to, or are prepared to, offer. Please remember, we can usually improve a rate of exchange by between 2 and 5%. That is a percentage that could go straight into the amount your buyer can, using us not only helps your vendor get a higher offer, but it is tantamount to a discount for the buyer - it's a helpful tip that could help you up their offer. From initial introduction|discussion to being in a position to exchange currency through us can be as little as a few hours; hence, the first myth to dispel is that it takes ages to set up with a currency broker. It does not. Some of our referrers will even help their buyers submit an application to become a client online and complement that by emailing us the client's brief at the same time. We're based in central london, a stone's throw from the West End and on the edge of the legal district. Our brokers have been known to sit in on meetings with a buyer's solicitor, or schedule an appointment to follow it at our referrers offices. This is an excellent way for you to add flesh to your acumen. If you can tie the buyer in with us, then you're basically making yourselves more 'sticky' too. + We can have your client's funds in the UK as GBP within the day. + We can pay their initial 10% deposit directly to their nominated solicitor. + We can keep them and you informed of the movement of those funds with near pin- point accuracy so that both solicitors, client, you and your vendor have eyes on progression of the matter. We will explain to the client the difference between just bringing in enough money for their initial deposit and the scope for them to secure one single rate of exchange for both the deposit amount and the balance, even though that balance might not be payable for a number of weeks or months. A number of the contracts and terms we have access to simply aren't available on 'the high street'. They enable private clients to remove the risk of the rate changing on them even if they have more than one payment to execute over a certain time frame. The bespoke terms and contracts we offer are excellent tools for those paying a deposit and then a balance, or those who want to quantify/cement their sterling budget before finding a house to buy. Our brokers will happily elaborate. If the client is yet to firm up their own UK banking arrangements we can hold funds for them until they want them (their funds) paid to the appropriate party. Hence, objections like 'we haven't got things in place' or 'we need to bring funds into the UK' can be fielded with confidence and pro-activity rather uncertainty on your part as to if and when the buyer might be proceedable. If you have a currency broker and your prospective buyer doesn't yet have their foreign currency liquid in the UK, by working with us you can confidently inform you vendor as to the proceedability (is that a word?) of the matter because of how accurate we can be. We have longstanding working relationships with a number of UK banks, both private and high street. We'd be very happy to make a recommendation if your buyer were as yet undecided. Likewise, we enjoy some exclusive|preferential terms and tie-ins with insurers, school search specialists and resettling specialists, should you want to truly guild the lily. If, for some reason, the purchase stalls, falls through or the buyer finds something else, your introduction to us means the client is vicariously but indelibly linked to you; so, if you have chosen to formally partner with us, we are still in a position to honour any reciprocal referral arrangement. Supposing things proceed and the buyer's offer is accepted, we agree the bespoke terms of the currency exchange, lock in the rate of exchange and simply ask the buyer to electronically transmit the foreign currency amount to our secure, segregated, client trust accounts. Our footprint is global. We work with Tier 1 UK institutions which means that regardless of the bank your buyer uses to send funds to the UK, funds will arrive here as quickly as they can and our brokers are on the telephone and communicating with the buyer pre-emptively to make sure there are no hold ups, they have all the information they require and they have an appropriate understanding of how to fulfil their side of the exchange. The buyer might elect to make use of our 'Fully Managed' service wrapper. This means that their only action is to authorise their bank to electronically transmit funds to us. If they are familiar with using a currency company then do still emphasise the benefit of enquiring with us. For partners we know we will tailor our margins to specifically undercut other brokers already on the scene. Any good will we can generate for you and for us by offering your client more is done so diligently and forms an important part of how we market ourselves. We will equip ourselves with the relevant details for the UK recipient and push through the booking and the payment the moment the foreign currency amount arrives with us. The client simply sits back and waits for you and|or their solicitor to confirm arrival of funds and completion of the purchase. Give our brokers a call if you would like to know more or discuss how our services might be best aligned with your work in this area. 02031728193 #buyer #vendor #buyingahouseinlondon #conveyancing #foreignbuyer #buyinginlondon #propertylondon #searchagent #propertysearch

  • What tends to move the FX markets?

    As we have mentioned in other posts, when you think of the 'Foreign Exchange' (FX) markets, you should imagine an actual old fashioned market, with stalls, sellers, masses of stock and/or more niche and homegrown wears. Whilst the financial markets exist only in the electronic sphere, each of their many iterations are the same in principle and are fuelled by supply of products and demand for them. But, someone who doesn't visit a market and relies on others to buy produce for them (we're sticking with the 'market' analogy here) would be forgiven for not understanding some of the terms and concepts at play. Furthermore, if a change in the price of something directly affects you and your pocket, but, a detailed understanding of why that price has changed is not openly and freely available outside of the world that determines the price, then, how can you be expected to choose wisely when it comes to where best to buy what you want? Rates of exchange change all the time. Why? We have commented before that, in one sense, this is because of the speed and sophistication of software that matches what someone is willing to pay for a currency with what someone is prepared to sell the currency for... The bigger question is really what determines those two figures/prices? What determines the rate/price a bank might ask for one currency and the amount a bank is prepared to pay for another? Well, short of going into a dissertation about the global capital markets, we thought we might venture an opinion on some of the theory behind this question and some of the things that influence whether a currency is bought or sold, or held for the longer term. Generally speaking 'risk' is one of the biggest factors in determining whether anyone does anything, regardless of whether that 'anything' is to do with financial products, stocks and shares, investments, building a house, leaving one's job, moving abroad... The risk of something changing to one's detriment and the likelihood or probability of the opposite occurring tends to be the overriding motivator in any action. Risks come in many forms and can be expressed in many different ways. Again, 'risks' aren't necessarily confined to talk about finance and returns or losses. A currency is, generally speaking, a measure of worth or value. Yes, currencies are typically a system of money in use in a particular country, but, given that more or less anyone can accumulate a currency, currencies are essentially the unitary measure of the worth of a series of abstract, tangible or intangible, expressions. You and I think of currency as being hard money we might use to pay for something. But, goodwill is a form of currency. Payment in kind could be considered a type of currency too. When it comes to what influences the worth someone, whether they are a country or an individual like you and I, places on something, one has to look at the uses that person might have for that 'currency'. What can that measure, that good will, that gold, that bike, that bit of data, be used for? In a globalised world, holding currencies serves as security. Having a stock-pile of readily available and globally in demand currency means you can react quickly to changes in circumstance; both your own and someone else's. You can offset the effects of certain things and you can mitigate the risk associated with a certain course of action or the effects of certain influences that might more broadly affect your circumstances. When it comes to currencies, changes in the rate of exchange are generally fuelled, for good or ill, by the perceptions of those holding or seeking to hold, those currencies. On the Prime Cap Data Centre we list a few of the publicly acknowledged influences that can have effects on the movements of rates of exchange. These are: ​Central Bank meetings, minutes & press conferences. Interest rate changes + speculation, inflation reports & GDP figures. National Indexes - mortgage approvals, employment count, public sector borrowing, consumer price index. Natural disasters, terrorist acts, political uncertainty & civil unrest. News media sentiment, innuendo & day-trading shifts and appetites. We must emphasise that the factors listed above are really only anecdotally relevant 'sign posts' which we know to be looked at by those who make decisions about the currencies they hold. Whether you or I (at a high-street level) or a Central Bank, institution or globalised business, if we are holding currencies for currencies sake then we might look at these sign posts to determine how we feel about our longer term dealings in currencies. All of the information and data sources referenced above are, in fact, directly linked to actual rates of exchange in one way of another. By this we mean that you can, to a greater or lesser extent, identify a relationship between the flow of capital into or out of a country which, when expressed as a value, might prompt someone to increase or decrease their holding in a particular currency, but, that increase and/or decrease could and can, in itself, determine the measure of other expressions of activity in other areas of an economy. Look at the recent price corrections with regards to products being sold in UK super markets. The government uses the Consumer Price Index (CPI) as a measure of inflation. A higher or lower rate of exchange has a direct effect on the price at which something might be sold in a supermarket. A higher price because of a change in the exchange rate is fed in to the CPI which in tern has an effect on how the Bank of England views inflation in the UK. Now, the rate of exchange on it's own does not prompt the BoE to increase or decrease their intervention in the UK's monetary system per se, but, it is both a symptom and a cause depending on how you chose to value it's role and, when considered along with the myriad of other indicators, it may prompt a certain outcome or recommendation. The reason why you will not find anyone with an understanding of the part rates of exchange play in economics predicting with any certainty as to where a rate will be and when, is because the influences, demand, supply and appetite for a currencies changes as often as the wind. Yes, those working with currencies or those with some sort of an engagement with foreign exchange and currency activities, can interpret certain data and arrive and certain conclusions, but, the landscape and the framing of that interpretation can very well change without warning depending on the appetites of 'the market'. Events that cannot be predicted have a very significant effect on exchange rates largely because those engaged with rates of exchange have to, when presented with something they had not anticipated, make decisions very quickly. Some times these decisions themselves can have effects on rates of exchange, but, most governments, institutions and investors want to limit the detrimental effects of an event on them. This does not mean that a rate of exchange goes up or down per se, but, it does mean that there are very sharp and distinct changes in rates which, in and of themselves, can prompt other market participants to consider their positions. Weirdly, those commenting on the state of capitalism and, in particular those discussing the role of financial hubs like The City of London, have in a round-about-way and, in some instances quite directly, suggested that those operating in 'the money markets' are simply gambling. Institutions are engaging in actions on the basis that the alternative is less disadvantageous, you might say. There is no certainty that one outcome will absolutely happen...if there were then everyone would be arrive at the same conclusion and act accordingly. Institutions take a view and prepare for that view to be wrong in precisely the same way they might prepare for the positive outcome they are hoping for, but, there is simply no way of knowing and, in fact, it is those who are the last to see a failed opportunity for what it is that end up holding the baby. Institutions employ intelligent people because they believe those intelligent people have more chance of making the right decision than someone less intelligent, aware or prepared, and, the extremely profitable institutions are often the ones who have the most intelligent people in their employ. There is no coincidence there. Whilst we are firm advocates in favour of the education of our clients as to the information and data that may or may not result in a particular outcome becoming a reality, we have to concede that our Data Centre is a tool designed to enhance our position as an operator who knows more than others. We publish material, commentary, rates of exchange and all sorts of other information in the hope that it helps us stand out from rivals who leave you to simply infer without guidance. And yet, the information we release and promote puts you in no better a position to forecast markets with certainty, necessarily. What we tend to do is justify an outcome by looking back at what, in hindsight, suggested it was likely. Providing commentary on a market does, by implication, mean that you are talking about events that have already happened. We cannot talk about events that are yet to happen and their effects basically because an event in isolation does not, de facto, have one result or outcome. Essentially, we, like anyone else, do not know how the wider world is going to digest and then act on certain information. We can talk about previous reactions and we can labour the point that if they were to happen again such-and-such an outcome would not be beyond the realms of possibility, but, if we knew that something was going to happen we would be acting on it ourselves and providing you with our commentaries from the Caribbean rather than windswept London. The most useful thing a firm like Prime Cap can offer you, aside from the confidence of working with a relative sense of the environment you're operating in, is the speed to act. We can help you prepare for a change in circumstances and, if you've not prepared we can act quickly to mitigate the effects of any change, should you have to react. Some of our clients like to monitor things themselves and prefer to speak with us about what is going on in the markets because they like a balance of views. Others choose to act when certain factors are obviously going to affect their position rather than before. They prefer to transact empirically and this is generally the approach of someone who knows they have a transaction to execute, but, are not convinced as to the direction in which the market may go. Generally speaking, clients with this approach have an understanding of the volatility of the markets and they rely on us to grant them access and to execute with speed. Many currency brokers talk about how 'timing is everything'. The trouble with that rhetoric is that they do not know what is round the corner. The 'timing' slogan is one used to try and appropriate your confidence. Having worked for some of London's most aggressive brokers we know, first hand, the tricks used to get you to transact. By suggesting they know more than you they get you to offload the decision making process. They will always caveat their commentary heavily, but, it is fair to say that if you're worried you might have to pay more tomorrow for what you need to buy today, then you should not delay your purchase. Ask our team for a break down of the current state of the market. You will be met with a broad strokes assessment of current themes you may have seen across business headlines. We will probably mention dates that will see certain information released to the market and we will certainly give you a sense of where the current rate is in relation to previous dates in the trading cycle as well as a relative sense of where the rate is now compared with where it was when at it's lowest or highest point recently. If none of this interests you then simply rely on our tight rates. Whenever you need to exchange currency, you can be sure we will provide the most competitive margin, so, at least there is one thing we know for certain. #FXtrends #Forextrends #UKinflation #UKdata #BankofEngland #financialmarkets #FXtrading #AUDtoGBP #USD #FOMC

  • Foreign Buyer? 3 Tips to Help with their Currency Needs.

    I am often told by property professionals that their customers do not need the services I offer - that currency exchange, FX and the movement of money for their UK house purchase is something their buyer (or seller) already has in hand. I used to think that made sense ~ one was dealing with affluent, globally mobile individuals and families and, for one thing, the topic of money, liquidity and transmitting funds might be deemed a private matter, and for another, it seemed perfectly plausible that the client might already have a robust way of handling their currency dealings and that this explained why currency was rarely discussed with UK agents (between client and agent). After working with HNW professionals and families buying houses for over a decade I have become convinced that a foreign buyer not 'bringing up currency' is not indicative of a level of sophistication on the part of the client that precludes to opportunity to refer a trusted brokered, but rather, it is because personal financial services, let alone tailored personal foreign exchange services, do not exist in the same way overseas as they do in the UK - I immediately acknowledge how Imperialist that sounds...but I have anecdote after anecdote to back it up! Furthermore, I theorise that specialist currency services are not quite mainstream enough for individuals within the property sector to confidently speak to their value, and are usually presented and represented inconsistently across the industry, often by ill-equipped and ill-disciplined operators who think they're in London's version of Woolf of Wall Street but are actually only facilitators of electronic bureau de change services. Ego and sales patter have almost entirely eclipsed the tremendous value a specialist currency company can offer the wonderful world of property. I firmly suspect that 'high-net-worth' clients buying in London tend not to ask agents whether they have any contacts who can assist with currency because they don't even know that such a niche set of services exists, not because they already have it catered for ~ and the majority of agents that might have thought to suggest a company like Moneycorp or HiFX or FC Exchange have been so put-off by the inelegance of those who 'sell FX' that it is no wonder they aren't inclined to suggest referring their client to someone. Hence, I want to touch briefly and without much fan-fair on how a London based property agent working for either the buyer or the seller, might establish whether there is merit in connecting their precious client with someone like me and a firm like mine, Prime Cap. 1 ~ How will you be funding the purchase? A simple question and one that any UK resident would be asked straight away when buying a house. Is it by some sort of borrowing arrangement? Mortgage? Cash? SPV? My guess is that clients quite quickly reveal (although 'reveal' makes it seem like it is something they might otherwise be inclined to conceal...) that some or all of their capital is 'back home' and therefore likely in a currency other than GBP Sterling. Straight away therefore you have the opportunity to ask whether they have considered using a personal currency or money broker to quickly and securely bring funds into the UK. You're no doubt looking out for the chance to suggest other professional services firms like mortgage or tax advisors, so include currency in the tool kit of resources...and, I would argue, it is far more likely that your foreign client has a vacancy in the currency exchange space anyway. 2 ~ Dear Mr Client, do you know how quickly your foreign currency can be made liquid and realised as Sterling? For many high-net-worth clients their capital, although accessible, will be in some sort of vehicle (ha, no not a Porsche...although maybe/partly). That could be something as simple as a trust (particularly for US residents) or other instruments and assets. Releasing the capital might not be instant, so, it is worth asking your client to elaborate on the turn-around time from the point of instruction (to the trustee or fiduciary manager) to when the foreign currency might be ready to send to the UK - the reason you might want to steer a discussion in this direction is because you can then incorporate the idea of locking in a rate of exchange before those funds are in fact liquid. Almost all clients exchanging money and not using a currency broker, which is almost all clients, 'take what they are given' by their bank on the very day their money is exchanged. This means they have no idea what the foreign currency cost of their UK purchase is until they ask their bank to debit their account. This needn't be the case. A non-bank like Prime Cap can lock in the rate of exchange at any time and for a period of up to 18 months. Not only does this enable the client to be specific when they tell their bank, trustee or fiduciary manager home much to liquidate from their holdings, but, it means the foreign currency cost of a property does not go up; period (as they say in the US). As well as helping your customer out, introducing this type of offering helps an agent because it qualifies their customer. If a client has engaged a currency broker then, to a greater or lesser extent, you can infer that the client is serious - even more so if the type of contract outlined above is utilised because it means the client is committed even before contracts might be exchanged on a property. 3 ~ Money means money. I said I would only provide three this one combines two elements - what is the financial incentive for the client and what is the financial incentive for the agent? A motivated currency broker will always save your client money - always. Truth be told, there is no way of knowing how much money we can save your client until the exchange of the currency is done. This is because the main bench-mark for undercutting and saving a client money on the rate of exchange is the institution the client might otherwise use. So, the amount we can save your client (dear Mr Agent) depends on what their bank or other broker would have 'charged'. At Prime Cap we want to make sure a) the customer trades through us and b) you get thanked by your client for introducing us because are margin was so much better (and our service too) than the competition. I am not coy about saying that the saving we can offer might be anywhere from 0.1% to 7% of the total foreign currency amount the client is exchanging. Effectively this means we give back this sum to the customer - this sum that would have been paid to another institution had the exchange been conducted elsewhere. So, if your foreign client is buying a £1,000,000 home in the UK and their bank is charging them 5% 'in the rate of exchange' then they would be paying/sending (based on the currency GBP to USD rate of exchange) $1,382,200. That 5% is quite literally the fee for using their bank - there are other way's of describing it, but, put is a fee. Prime Cap has the ability to undercut that fee by up to that 5%. We could exchange the currency at 'cost' and save the customer $69,100 - but we wouldn't make any money ourselves. I make quite a song-and-dance about Prime Cap being 'independent' and able to tailor our rates. What I mean by this is that, unlike many 'factory firms', we do not have a 'house price'. We do not have a minimum margin or percentage that our brokers, stakeholders, marketing team etc. need to achieve before they get paid. Each broker choses how to price their clients' transactions. If a broker wants to apply no fee at all then it is up to them - and it is not unheard of for some of our more senior brokers to do just that in order to cement good will. This approach is nearly unique in our industry and it means we can be agile enough to tailor our offering to the client and the circumstances - making us ferociously competitive. It also means that our brokers work totally alongside our referral partners with a truly transparent and collaborative (rather than combative) modus operandi, which brings me onto the second element of this point three... In a crowded market place businesses like Prime Cap have to standout both for the quality of their service and for the commercial appeal of their proposition. What I mean by commercial appeal is that many if not all of our competitors offer property professionals a cut of whatever fee might be applied to the client's transaction - a percentage of the 5% I mentioned earlier. In my experience this cut represents a conflict of interest unless the client is being offered the most competitive rate of exchange to begin with. When I worked at Currencies Direct - I was the chief sales point of contact for the 400 or so affiliates CD worked with in France - we used to pay a commission to those who referred to us. It became apparent that some agents were only interested in what they would make out of any referral. They couldn't care less about what the client received. This ended up meaning that agents (called Immobilier in France) would change their currency provider like the wind, and currency providers would offer ever increasing percentages by way of commission. Gradually the competitiveness of the margin offered to clients would widen in order to accommodate agents' slice and to keep them referring. In my view this is totally the wrong way round. At Prime Cap we will not be beaten on price... literally...we will sell the currency at no mark up at all if it means we can be assured the client will use us. We do this because the relationship with the referrer and the confidence we want them to have in us is incredibly important. If we do not win the deal then no-one in the process gets, being prepared to undercut has to be at the forefront of our strategy. Our partners may not get big remunerations, but they will always get one on every referral because we will not lose a trade through greed or pricing too widely. So, the take away from this veritable diatribe - If you are not working with a currency company then your client is almost always leaving money on the table. Choose wisely and carefully when selecting which currency company to refer. The way a trade is priced - and the transparency with which a company is prepared to discuss their pricing strategy - are significant if you want absolute confidence that your client's best interests will be served. Just because your client doesn't bring up currency, don't assume there is not a valuable referral to stand to gain and so does your client. We've a lot more case-studies and FAQs on the Prime Cap website. #realestate #property #londonproperty #searchagent #buyingagent

  • TrasnsferWise: 5 things they can't do.

    You might think it odd that a currency conversion company overtly name and publiscise a business which all would consider a direct competitor (and yes, we have put a hyperlink to their site in their logo, so you can travel directly there). Well, we would agree with you, if we considered TransferWise and their ilk 'competition'. We will begin by assuming that you already know TW apply a standalone fee instead of a mark-up to their rate of exchange. They give you what they call 'the real exchange rate', which means they pass on the rate they get wholesale, but, they charge you. At the time of writing TW's fee is 0.35%. This means that when you are exchanging £1000 you pay £3.50. When you exchange £100,000 you pay £350. All we have to do to win business from TW is come up with a simple online system (like theirs) and charge you less than 0.35%. We have developed the former and our ability to undercut the latter depends on how much you are exchanging. Prime Cap is as different to TransferWise as Fortnum & Mason is to Lidl. Largely the same market, but, there will always be things that only Fortnum's can provide - expertise, quality and panache? Discount grocers like Aldi and Lidl are disrupters in the UK precisely because there are many who want good quality at a better price. A business like TransferWise offers precisely the same to those looking to send money abroad, however, their business model, although revolutionary, is limited in terms of application and leaves a vacuum which Prime Cap happily and diligently fills. Ironically, Prime Cap's services do not cost you more; in this blog we will look at how TW use inference and leverage assumption to achieve marketing impact. We're quick to impress that the information we discuss here is freely available online via TW's site and other forums and we certainly invite you to challenge our understanding of things. In writing this we are not actually trying to discredit TW, but, rather we want to highlight some of the differences across the sector. 1. You can only send the currency you buy to the country from which that currency originates. This is unlikely to matter to you unless you hold more than one currency account in more than one country. So, if you are a UK based business earning in US or EUR then you are not able to convert GBP using TW into one of those currencies and credit it to your UK held EUR or USD account. You can only credit it to a USD account in the US. 2. Your rate is only honoured if you get your money to TW within 24hrs. Again, for businesses this can be a problem because, although someone in accounts may have authority to lock in a rate with an FX firm, they might have to get sign off from above in order to send money for settlement. What happens during holiday season, school holidays etc? Are you going to have to come back to TW if 24hrs elapses and beging the whole process again? 3. There is no formal international wiring paper-trail with a TW payment. TW relies on entities in the country you want the money to arrive in to make a local domestic payment to your chosen beneficiary. Therefore, your sterling doesnt actually leave the UK. You cannot necessarily provide your beneficiary with a globally recognised confirmation that you ever or even sent funds to them. For corporate clients buying stock from slightly more exotic locations this could be all the more onerous as local banks mightn't be able to trace transactions and your supplier mightn't feel comfortable shipping without the usual SWIFT message or the like. 4. The TransferWise team arent going to inform you of the data, news or sentiment that will have a bearing on the currencies you're considering exchanging between. DIY online transfer businesses rely on you to do everything. There are a bit like sense service checkouts at the supermarket. Granted these are hugely convenient, but, when the red light flashes you still have to wait for someone to solve your issue. If queuing at an isle and having someone pass all your items across the scanner were as quick and painless as the self service process then it is more than likely you'd opt for the human touch, as many still do. Foreign exchange services are much the same. The little flourishes, the insight at point of sale, the reassuring discussion with someone whose sole role is to take you through the process...these are all things that economy strips out of a TransferWise type service. It is totally fair to say that in certain, if not many, instances the service Prime Cap offers are not going to add materially to the value you receive, especially if you're attracted by app. or mobile accessibility, but, our online platform relies on many of the same queues and protocols as those of purely online transfer businesses and yet we customise what you see and what you can use. Transacting within minutes is all well and good as an advertising hook, but, if that time is then lost while you try to understand how to send a payment, the proposition is revealed as a rather hollow one. 5. You cannot do your due diligence on them. The vast majority of clients we work with meet one of the Prime Cap team in person before engaging us. In instances where this is not possible, the client is always and only introduced by someone who has met us in person and who has, in the face of the enormous competition we face, selected us from a list of suitors as the most appropriately equipped firm to satisfactorily deliver what you need. To be sure, you may have seen a TransferWise ad on public transport. It would be totally wrong for us to imply that the probity with which business is conducted or the depth of knowledge from within their team falls short of what a boutique specialist should offer, but, how do you know? AN EXAMPLE: Prime Cap recently 'won' a client from TransferWise precisely because we were able to out-think them. Our client contacted us on a Thursday evening. By Friday lunch time they were registered as a client. We couldn't say whether they were already registered with TransferWise, but, when we provided them with a rate quotation on the Monday our client exclaimed that our rate was close (if a little better) than theirs - 'what is the advantage' we were asked. Well, given we were quoting our client at 15:00 we knew that it would not be possible for him to get the £125,000 he wanted to convert to us all in one go before the conventional cut-off time for sending it to the US. Hence, we asked him to send funds to us earlier that morning. Knowing that at 15:00 he would be unable to get funds into the US, we leveraged this knowledge to illuminate the shortcomings of the TransferWise service...bottom line being that their was no-one there to tell him he was trying to do something time sensitive on too tight a turn around. In the above scenario, our client spoke with one person at Prime Cap. That dedicated and experienced dealer knew precisely what to do and what to say in order to expedite the moving parts of the transaction...and how to do so clearly and without causing undue alarm or concern to the client. There are so so many analogies that could characterise the position we feel we occupy for our clients and all potential clients looking to send funds globally... ...the difference between a hire car and a chauffeur driven private transfer... ...silver service vs. buffet style... At the end of the day, what any of these analogies fail to outline is the fact that you, the client, who has the choice of how and with whom you wish to deal, pays absolutely nothing more for the services of a specialist, guided service. Prime Cap is TransferWise but with a personalised, human and responsive instruction manual, there when you need it. If that sounds like the sort of service you would like, give us a ring on 020314175781. | 02034175781 | #transfer #transferwise #USD #currency #payment #sending #money #exchangerate #PrimeCap

  • Interiors trends: how does taste frame a conversation in currency?

    Prime Cap are very fortunate to call some of London's foremost interior design studios clients. Our relationship with the sector originally came from personal connections and has now firmly augmented towards growth by reputation. As well as hard earned referrals from existing clients, some times we knock on the doors of the neighbours of our existing clients and ask if the work we do for so and so might apply here? This is as close to a cold approach to any client as our brokers get and it is always underpinned by a belief on our part that similar practises to those we have replaced are being used by our target client. We work with Robert Langford, Design Box London, Interior ID and Lanserring to name but a few - does what we do for them apply to you? generally the tone of things.... The approach is soft, brimming with context and examples of common practises across the sector. Usually the 3% improvement on margin is appealing, but, more than that, the intensely personal and personalised way in which we can and do engage with our clients, both current and prospective, resonates with owner managed brands and independent studios alike. We always make the online execution of a payment a prime facet of our service, but, we have been delighted to learn that it is our brokers' involvement in the booking and detail confirmation that is truly attractive. Like any business, an interior design firm may be called on to make and receive payments. Depending on their supply chain or procurement channels, they may also have cause to exchange and hold currencies too. Advising on the most effective ways of doing this is our bread and butter, but, rather than just give vanilla examples of the types of payments we make, we thought we might dig a little deeper and talk about how trends in interior design have changed and moulded the beneficiaries and countries we work with. If nothing else, it might provide expanding studios with some ideas for future proofing their processes. We're interested in discussing: 'How have consumer tastes affected trade buying activities in the London market?' and 'Who are the players (countries, brands and suppliers) making waves and where do we see the spot light of interiors fashion turning in the seasons and cycles to come?' One thing we have been struck by is the extent to which cliques form in certain sectors. Whilst traditionally the notion of a clique is about exclusivity, in the interiors space it is about dependability. We're not entirely talking about your friends decking out their apartment in India Jane, therefore you must and those who don't should be shunned...we're talking about the close-knit list of suppliers, fitters and installers whose skill and dependability mean designers need look no further than to ask about their availability. A professional clique if you will. Our goal is to become a part of that trusted team! Steven Spielberg credits much of his success to the team he has taken over thirty years to build. He knows that his cinematographer is of one mind and that the composer of his score can paint in the minds eye that which cannot be tangibly conveyed in a visual medium. So it is with interiors and high end property. Working with partners, suppliers and stakeholders that you already know, when the stakes are as high as they often are, is the way to pitch and win with confidence. In one sense this is in fact a reason why currency brokers have found it hard to penetrate the sector. It is a closed loop in many respects, however, once 'in' one carries the badge of dependability and can leverage that not only to connect one's clients and contacts, but also to propagate one's portfolio. One of the overriding themes in interiors at the moment is consolidation. By this we mean two things particularly... There will always be a place for small scale artisanal suppliers, but, being able to visit a one-stop-shop in terms of furniture, fabrics and treatments, and the fact that such purveyors may have a range of prices that enable designers to take on more main-stream briefs because their sourcing is focussed on one supplier, has seen the birth of many more independent studios in recent years. Suppliers like Eicholtz and Coach House have brought a high end look into the mainstream through a number of interiors channels - admittedly not their own retail vehicles, as they are the wholesaler, but, the breadth of their stock ranges has fundamentally changed interior design and property in general. Yes, trade accounts with suppliers have always meant that design studios can 'work in' a margin, but, when these wholesalers are able to emulate designs from specialist craft houses, the customer wins and a sustainable relationship is formed that feeds in to the growth and expansion of other supporting sectors - ours being one. So, the first trend we've seen relates to specification of a design. Working with one main supplier has seen a reduction in the number of currency payments (and domestic payments of course) relating to a project, however, the size of these payments has concurrently increased. Distributors like Eicholtz invoice you, or your client, in EUR. The good thing is that you might only need to make one payment and therefore you and your sterling budget are subject to only one rate of exchange. As a base, using the rate of exchange achievable for the largest of your purchases as the bench mark rate for the entire project (so if you have to price anything else in GBP for your client but it is being bought from abroad) is a good way to ensure that costs dont unexpectedly escalate for your client. Bear in mind that if you are paying a deposit or part payment, between the date of the deposit payment and the date of the balance payment, the rate of exchange will move. If it moves in the wrong direction you're client has to pay more, or, depending on how you have calculated things, your margin is eaten into. With the trend for larger payments to big wholesalers we have seen, and have been instrumental in recommending, the use of certain hedging strategies for clients at risk of adverse movements in the rate of exchange. We cannot and will not tell you to wait until tomorrow to do you payment because the rate will be higher. This is something no one can accurately do, however, we can offer you solutions which fix the GBP cost of buying foreign currency denominated items and, if this is of interest, we invite you to pick up the phone to our dealing team for a more detailed conversation on it. The 'Scandi' look no longer has to come from Scandinavia. Shabby chic is available in Preston as opposed to Provence. Sure, our clients are still in the business of import, but, the sophistication of the supply chain now means that buying in a foreign currency is desirable rather than a hinderance to cross boarder trade - and we go on to explain how. This shift towards 'consolidation' has a second manifestation that has become more prevalent of late. Interior design studios who might otherwise have worked on luxury residential and/or turn-key projects are diversifying in to other areas of home furnishing and life style decor. The eponymous Kelly Hoppen brand is one such example. So too Taylor Howse and the incorporation of proprietary lighting design by the likes of Coco Vara. If you can find the manufacturer and the margin is there, then, working with private clients or on larger commercial projects, you have your market and the margin remains on your table rather than someone elses. As you might imagine, overseas production costs, overheads, lead times on orders, freight and international distribution all carry with them a foreign currency concern. So, the second aspect of this consolidationist theme is the fact that heretofore mono-focussed design houses are branching out and creating their own markets - and we love it. These businesses, depending on how rapidly they scale, can plausibly be selling in overseas territories and earning in a foreign currency. Many have concessions with establishments abroad and their earnings then need repatriation. Such activities benefitting hugely from a strategy for maximising the use of a favourable rate and removing downside FX risk as well as reducing transaction or payment processing costs. May fledgling online retailers, for this is what they become, rely on established payment platforms like PayPal. Whilst recognisable and responsive, these end to end system come at a cost. Hence, we are not only seeing businesses opening up foreign currency accounts of their own in the UK for the collection of these foreign currency earnings and the payment of foreign currency expenses, but, we are getting a greater number of calls asking for us to asking in the exchange of these revenues between account held by the business. Businesses often think that our worth only relates to payments leaving the UK or those coming in to GBP denominated accounts from third parties abroad. Not so. We do a lot of work for businesses who are simply managing their own currency balances here in the UK; with payments never leaving Blighty. Your bank loves the fact that you think it convenient to just pop euros from your euros account in to your sterling account online. That convenience often eclipses the woeful rate of exchange at which your bank performs the exchange. Why let them do this? So, to recap, we've seen more larger payments going to fewer large wholesalers abroad. At the same time, previously mono-focussed interior design firms have moved toward developing their own brand, exploring tie ups with retailers abroad and operating in more than one currency on the basis that their supplier and their retailers might very well be in different countries to themselves. One question we find ourselves asking is, of the data we accumulate, where are the hot spots in terms of development of these brands. What are the markets with appetites for UK Plc. and our inimitable creatives? The answer is that Britain's openness to international travellers has served as one of the most fabulous marketing tools. The global elite who live, work and operate in more than one country are taking their favourite pieces, fabrics and designs and replicating their 'London look' at home. Over the past decade we have seen clients establish outposts mainly in the UAE and the United States. In terms of their 'own lines' we have seen production increase in the Far East for furniture and India for interior fabrics and carpeting; also closer to home in countries like Portugal (particularly for ceramics). We find that we have come full circle because, ironically, although UK designers rely on their group of trusted contacts, it is the cliques comprising the globally mobile that are fuelling dissemination of British design internationally. We are sure we will be told 'twas ever thus', but, we dont see how that can be true given that many of the tools and services that have facilitated this global proliferation are recent and still foetal in their application. Needless to say, if you or your business are working in any of the territories listed, we can assist. Furthermore, if you are UK based and buying in from overseas suppliers, whether in bulk or on a one off periodic basis, then you will benefit from considering how you do this. If we do knock on your door, know that Prime Cap is a brand familiar with and widely used in the British interior design space. Our courtship of this sector is not flash in the pan and, we hope, this will be proven by the likely recommendation you receive from your near interior design neighbours. | 02034175781 | #interiordesign #interiordesignstudio #ownbrand #eponymous #fabric #ChelseaHarbour #Import #overseassupplier #overseasproduction #internationalbuyer

  • Family Offices and foreign exchange.

    We like working with Family Offices because, in a very different way to purely wealth management businesses, the level of autonomy MFOs and SFOs have in selecting appropriate service providers means that, if successful in our tender, our dealings are can be extremely focussed and totally bespoke to the currency matters presented to us, either on a case by case basis or as part of a wider strategic approach to the client's global currency activities. Of course Prime Cap is nowhere near as old as any of the bodies corporate we service, but, therein lies our appeal, because, like the network providers we work with, Family Offices can rely on us and our software and systems-partners to do the leg work in bringing them services they would never develop internally. Reporting, working orders, vanilla hedging and exceptionally tight spreads...each of these require attention and, by working with a focussed boutique like Prime Cap, an FO can reduce time spent and rely on pay-as-you-go experts, rather than hiring one. A family office might very well turnover currency volumes comparable to us, but, their activity will be dwarfed by that of our other market counter-parties; the reach and product range this gives us, and indeed our FO clients, is noteworthy and distinct from the services and expertise that tend to be accessible to SFOs and MFOs...not because they cannot achieve these arrangements themselves, but, because we employ experts to ensure we can extract more value from these tools. Much like External Asset Managers and indeed wealth managers, Family Office businesses can use us for sundry or day-to-day currency exchanges as well as longer term hedging and forward buying activities. A number of businesses in this sphere leave foreign and domestic currency exchanges and payments up to their prime broker. This tends to be because brokerage accounts and instruments are already hosted with them and clearing is convenient, however, dealings are not necessarily conducted at the tightest of spreads. In our experience a prime broker takes one of two approaches. Either they consider the day-to-day currency exchange activities of their client as a non-revenue generating add-on service, so they execute 'at market' (whatever that means in this context), or, they view FX activities are an entitlement. In the latter instance they may approach the exchange competitively, but, as the FX margin applied likely offsets other discounts applied across other products and services, the spread is wider than it might be with a specialist broker like Prime Cap. Access and insight can be in short supply when one is dealing through a private bank where the focus is borrowing, lending and assets under management . We sit neatly beside such institutional activity, providing sharp and immovable pricing and simple means of execution. For what it is worth, as an independently-owned boutique we have found favour with businesses and FOs that like to work with a smaller FX operation. 'Buying British' as it were. This has been an increasingly common position and maybe reflects the emergence of the private equity play/backed acquisitions in the retail foreign exchange space. Personal services suffers as does competition on rates. Please remember that cost efficiencies, the priority of consumed or acquired FX businesses, do not mean more competitive spreads and services, they simply mean and erosion of expensive experience provided by a broker. An online platform will not call you when the market moves in your favour. Nor will it tailor it's terms to your particular settlement requirements. | 0203 417 5781 | #FamilyOffice #SFO #MFO #PrimeBroker #forward #hedging #currency #wealthmanager

  • Buying Guide | Currency and The Caribbean

    We stumbled across a very useful 'Buying Guide' from Aylesford International on the practicalities of buying property in the Caribbean. The focus of the piece (to view the original source click here) was, for the most part, the steps non-nationals might have to consider when buying or selling. Thinking this guide both tremendously useful and timely (given the concerted efforts by certain Caribbean sovereignties to court the attention of those looking to acquire additional citizenship rights) we thought we might overlay some currency and international payments trivia that complements purchases in the region. The process of buying property in the Caribbean is assuredly quite straightforward; in fact, so the is the process of sending currencies to the Caribbean for such purposes. Anyone can buy property in Barbados (for example); there are no restrictions, but if you’re a foreign national you need to get the permission of the Central Bank of Barbados. This is a formality. You do not need a domestic Caribbean bank account prior to the completion of your purchase. Your vendor pays a property transfer tax and the stamp duty. See below. Rates of exchange tend to be pegged to the United States dollar, making exchange calculations easy to compare and augment during negotiations. You can raise finance in Barbados as a non-national. But if you choose to bring the finance with you, it must be registered with the Central Bank. For legal conveyancing of ‘unregistered’ land (which most is) you pay legal fees on a sliding scale: Up to BDS $25,000 BDS*: $1,000 On the next BDS $75,000: 2.5% On the next BDS $100,000: 1.5% On the next BDS $300,000: 1.25% Amounts above this threshold: 1% Further fees will be payable if you’re borrowing for the purchase, based on the loan amount. You should also budget for an annual land tax. Rates range from 0%-0.75% of the value of the property. The tax has a ceiling of BDS $60,000. In May 2016 the GBP to BDS (Barbadian Dollar) rate of exchange was 2.90. By November 2018 it was 2.58. This 'strengthening' of BDS mirrors largely the weakening of GBP following the UK's vote to leave the European Union and mirrors, to a larger extent, gains made by the US dollar. Vendors may elect to price their property (for would-be 'foreign buyers') in USD because the exchange is more easily expressed, however, after your purchase you should expect any land tax, local taxes and ongoing maintenance costs to be prices in BDS. As a non-national who may be exchanging money and sending it to a bank account in the Caribbean, invariably you can pay USD into at BDS account. Your domestic bank, or the domestic bank of the person or business you are paying, will then exchange into BDS for you. Relying on the receiving bank to perform the exchange could incur additional processing costs, could leave you vulnerable to an unfair margin and may delay the application of funds to the receiving account. Prime Cap is in a position to exchange directly from the currency you hold into BDS or any number of the local Caribbean currencies. TAX To avoid certain taxes payable by individuals when selling property, many non-resident purchasers establish an offshore company to buy and own the asset. This also avoids any issues with withdrawing 100% of sales proceeds at once. Prime Cap can just as easily exchange funds for a corporate entity incorporate offshore as we can for an individual. The same margins of improvement are offered by virtue of our consistent commercial rates of exchange. Furthermore, vendors wishing to keep sale proceeds offshore can make use of our bespoke settlement arrangements to comply with their obligations in this regard. We must emphasise the fact that, whilst our services can be incorporated into exchanges conducted as part of a tailored tax strategy, Prime Cap Payments Ltd is not regulated to provide legal or tax advice. We can, and happily do, introduce clients to contacts we know, like and trust who are expert in such disciplines. There are rules on repatriating the proceeds of property sales from Barbados. As things stand, you may withdraw the original purchase price, and a gain of 4-8%. Any further profit can only be taken at the rate $100,000 a year, although the Central Bank may exercise some discretion for senior citizens and emergencies. To ensure that such additional profit can be realised in the foreign currency of your choice at the same rate as the original purchase sum, we advocate consideration of forward contracts, which enable you to lock in rates of exchange for a prolonger period. This is particularly useful if you are restricted in the amounts you can withdraw from the territory you've sold in. There is no capital gains tax for non-nationals. You may also leave your property to whoever you choose; there are no succession laws for non-nationals. By adding an authorised person onto your Prime Cap account you enable an approved third party to instruct us to exchange for you. This feature can be particularly useful for private office businesses and trust administrators who handle the exchange and financial affairs of their clients. For would-be buyers yet to set up their own USD accounts, Prime Cap providers a dedicated service whereby we create and host a USD denominated account for you. You can either hold funds directly in our segregated clients trust facilities, or ask us to set up and account named to you and to and from which you can make and receive payments...all managed through the Prime Cap online platform. Each Caribbean sovereignty and each client matter/brief is nuanced and so we invite clients and agents alike to engage with us directly to discuss the particulars, or indeed the generalities, of matters relating to the sale and disposal of residential and commercial real-estate holdings in the Caribbean. | 0203 172 8193 | #thecaribbean #buyingproperty #Barbados #BDS #USD #nonnationals #taxes

  • 5 reasons why PCL Landlords should consider working with a currency broker.

    Whether you manage your properties yourself or rely on a company to do it for you, if any, some or all of your income gets sent overseas or converted to a different currency then the skills of a personal currency broker could help you. Not only will they improve the rate of exchange you get but, a broker's involvement adds to the speed with which you are paid, how you go the about reporting of transactions, profit and yield, and the overall collection and management of payments from tenants and to stakeholders or suppliers alike. Let's see how: 1 If you rely on the services of a company to collect rent for you and/or manage your property related payments and expenses, then, by aligning themselves with a currency broker, said company can streamline the sending of money to you. Their existing service benefits you further by embedding a commercial rate of exchange into transactions. Your management company collects rent in sterling? You live outside the, those pounds will be exchanged either before they reach you (and arrive as a foreign currency) or by you when you send them to yourself overseas at a later date. Your property management company ensure that you benefit from up to a 5% improvement in the competitiveness of the exchange rate used to convert you sterling simply by working with a FCA regulated broker or agent - like Prime Cap. Currency brokers like Prime Cap operate at 'commercial' rates of exchange. These are significantly more compelling and competitive than the retail rates most property management businesses can achieve through their high-street bank. We do not mean to malign the services of a property management company, but it is entirely fair to say that their UK banking needs probably don't venture into the sphere of negotiation of exchange rates. They rely on their bank for an overdraft facility, business debit cards, maybe some sort of insurance...but, international payments and the rates provided to a solely UK reporting business tend not to come under scrutiny. This means we have an edge we can offer to such businesses. So compelling is the rate improvement in many cases that some property companies have brought their foreign exchange and payment services capabilities in house - using our brokers as their brokers so as to shorten the client journey toward better value. By this we mean that certain London based firms actually introduce their customers to us as their dedicated team to execute payments and exchanges. If this sounds interesting to you and your business then do get in touch. 2 Landlords who manage their own property portfolios can sometimes struggle to centralise payments. Maybe you receive money from tenants on different days of the month? Are you paying suppliers in one currency, but earning in another? The new and improved Prime Cap payment platform enables you to see all of your currency activity in one place, online via desktop or mobile devices. You can quickly and simply exchange money and send payments to numerous suppliers and from a number of tenants or stakeholders all in one place. 3 What happens when a payment does not arrive when and where you thought it would? One of the main complaints about high street banking practises (when it comes to currency payments) is that banks are not well equipped to help you find out where your funds have gone. Maybe you put an incorrect digit for the account number of your recipient? Did you misspell the name of the recipient? Perhaps because of their size, your bank can be slow to act and it may be difficult for customer service representatives to cut directly to the issue and provide useful advice and guidance. With Prime Cap, your dedicated personal broker only deals with currencies and international payments. We already have all the information to hand and we can contextualise it for you, providing you with plain and easy to execute advice and instructions. What's more, we give you certain helpful information as standard when you carry out a transaction, so, you already have things like SWIFT and MT messaging information to hand. We explain how to use it and the quickest way to resolve your issue. 4 Up to 90% cheaper payments. Like most financial institutions, Prime Cap charges you for the payment you send. We do this either by applying a fee on top of what you're exchanging, or by including the cost within the rate of exchange we quote you. The choice is yours (if you have a preference). Our payment charge will always undercut your bank. How much by rather depends on the bank you use and what action you are asking us to perform. Your UK high-street bank will charge you anywhere from £6 to £32 to send money internationally. Usually private retail customers of banks can only transmit a limit of £10,000 in one action through online banking. Therefore, for someone who wants to send more than this they need to send more than one payment, which results in that charge of £32 each time. Prime Cap enables you to put all the money you want exchanged/sent in one place and to send it overseas for one fee and in one go, and at a cost of up to 90% less than your bank. This is extremely valuable for Landlords sending multiple payments per month to and from their country of residence. 5 Professional and amateur Landlords have better things to do that watch rates of exchange - surely? Well, if catching a rate of exchange at the right time could save you or make you money, then we suppose that more people would pay closer attention, but, when they don't want to...we can. Because we only work with currencies, we are always looking at, studying and aware of movements in the major rates of exchange. This means that, if anyone is going to react quickly to good or bad movements up or down, it is us. Ringing you or emailing you to tell you that the rate you want is less likely, or to say that you can now exchange at the level you desire, is all part of our personal broker service. Imagine receiving a call from a financial institution that actually saved you money rather than costing you it! We warmly invite you to email us at or call us on 02031728193 to begin a very low key conversation about the way we work, the money you could save and the reason why we were the Wealth & Finance Awards 'Best UK Currency Broker 2018'... | 0203 417 5781 | #property #london #londonproperty #rental #relocation

  • Do law firms refer FX brokers? No!? Well, why the devil not?

    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... | 0203 417 5781 | #law #divorce #settlement #privatebank #payments #currencyexchange #fees

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