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  • Renting out your UK property and sending the income abroad.

    A recent enquirer with Prime Cap was keen to understand how our services might improve the rate of exchange and refine ease of execution for payments related to the collection of sterling denominated rent on their London property, and the transmission of that rent to their US account, where they now live (and rent, as it happens). The enquirer currently banks with a reputable, if not venerable, UK based private bank, but, as is so often the case they had suspicions that the rate of exchange could be improved on the basis that the amount being transmitted was 'small' although regular. When addressing matters of this type and without having delved any deeper with the enquirer than to establish the basic terms of the matter, we need to assume certain things, however, it is worth noting that the particulars of the collection of funds will generally determine the best way to maximise rate and process efficiency - by that we mean that any recommendations we make have to work around and defer to the current way in which rent is collected from the tenant. Is rent paid to you by an appointed managing agent? If your tenant pays your rent to an agent managing your property then you are at liberty to instruct the agent to credit those pounds to whichever account you chose. Prime Cap works directly with a number of managing agents who send GBP to their overseas landlords. We work with them in a couple of ways. 1. If the landlord has stipulated that the GBP amount should simply be paid directly to their foreign currency account, then the agent can elect to instruct a currency broker like Prime Cap to facilitate the transmission. In doing so, the agent is ensuring that the landlord receives as much as 5% more of the foreign currency amount than the landlord would receive were the agent to simply send an international sterling payment to them. In this instance the agent is acting conscientiously and is ensuring that his client receives the optimum amount of foreign currency achievable. Process wise, the client need do nothing, as Prime Cap engages directly with the managing agent to receive the sterling and send the foreign currency amount onwards. This is a particularly useful service for lettings and management businesses in the UK with a number of overseas landlords who just want to receive as much as they can, directly. 2. Prime Cap's partnering with managing and lettings agents as a third party 'preferred' broker means that it is the receiving client who elects, or not, to engage our services. It is a referral structure, plain and simple. The client receives the same high quality service, unparalleled rates and easy to use tools, and the managing agent has a trusted partner to present to their international and overseas customer. [ THIS MEANS SOMETHING FOR AGENCIES TOO ] Many agents sell themselves on value for money - especially in the critically competitive market that is London today - so, providing an end-to-end suite of services differentiates you from the pack. Additionally, should the client disengage you, we have found that they tend to continue to rely on our services for any currency exchange. On the basis of a traditional referral agreement, you retain the passive income on offer through certain iterations of the set-up. Even if your client stops using you, we will still thank you for the referral. Does the tenant pay directly to your GBP account? If your tenant pays directly to your UK sterling bank account then, simply by advising them to pay funds to Prime Cap, you, as the landlord, can make use of the same expert private client offering that all our customer enjoy. The tenant sends us the monthly amount either by standing order or by manual online payment. Their obligations do not change, only the bank account to which they are paying your rent does. Prime Cap's accounts are fully segregated, which provides you with the comfort of FCA authorisation. On arrival of the monies, we notify you and invite you either to manually exchange funds over our online transaction platform, or leave instruction with our broking team to exchange and credit funds immediately to you. Both processes benefit from the same compelling rates of exchange. Do you have a standing order to send a set GBP amount to your overseas account? As above, collecting your rent into your UK sterling account leaves you at the mercy of your bank when it comes to the rate of exchange used for the conversion of your funds. All private clients are welcome to set up a standing order to credit Prime Cap's GBP segregated client account on a monthly basis and on the understanding that Prime Cap's team will exchange funds at the optimum rate and as rapidly as possible. You simply receive the appropriate statements and confirmations detailing the rate achieved and the date on which funds will clear with you abroad. Do you convert all the rent on a monthly basis, or only enough to cover your foreign currency expenses? Whether you chose to send the full rental income to us or not, we can buy the foreign currency amount you need and hold or return any excess. A changing rate of exchange means that month-by-month the foreign currency equivalent of the GBP you receive will vary. By asking us to hold the GBP amount left over once the foreign currency amount is bought, you are building up a buffer that can offset any drop in the rate in subsequent months. Keeping the excess/remainder in GBP means that you have a UK based GBP denominated sinking funds which can be credited back to your GBP account if you wish, or paid out to third parties if expenses are incurred with the management and maintenance of your property. In this instance Prime Cap serves as both your currency broker and a competitive and speedy payments platform. None of the services offered to managing agents and landlords restrict the broader use of our day-to-day services, so, by registering with us for these transactions you are also possessing yourself of a trusted, quick and competitive payment services provider for other random or day to day payment activities. An alternative to the more conventional 'rent collection' model is the application of our services for those who have a second home abroad. Some clients charge their guests, tenants or customers in the currency of the country in which their property is located. So, someone with a villa in France can accept payments in euros from guests from around the world. Providing Prime Cap's appropriately denominated currency account details to your guests means you can easily and quickly pay monies directly to your own foreign currency account, or back in to GBP if you wish, and, all this can be done over a simple and recognisable online platform, accessible around the clock. Every arrangement is unique and we do not take a prospective client's understanding of the terms and tools we offer for granted. Each solution is tailored to your goals and, where possible and appropriate, we will make suggestions and recommendations that best suit your preferences even if you weren't aware that such tools were available. Whether managing agent, tenant or landlord, do ring us to find out more. | 0203417 5781 | #renting #managingagent #lettings #internationallandlord #overseaslandlord

  • Selling a house in rural France.

    This week's post talks you through currency related things to consider once you've accepted an offer on your french property. Our client bought their house in rural France before the single currency even existed. They have used us for many years to send sundry amounts to cover living costs, expenses and for spending money whilst 'out there', relying on us to transmit GBP to the EUR account they hold. We were delighted when this client asked us if we could help to bring the euros from the sale of this house back to the UK. He asked if we could help even before he had received an offer on the property. This forethought was truly welcome and, if nothing else, meant that he had a rough idea of what his euro asking price might equate to in GBP. First off, our client was keen to achieve as close to a GBP sum as possible. In speaking with us around the time he listed the property, he was equipped with an understanding of what sort of offer he could afford to accept in order to realise that sterling goal. We were keen to impress on him the fact that a rise or a fall in the value of the pound would affect how many euros he needed to achieve for the property. A rise in the value of the euro would mean he could accept a lower offer for the french house. Conversely, a drop in the value of the euro would mean he needed to be more robust in his negotiations with his would-be buyer. Fortunately for our client, his buyer offered him a very satisfactory price and the pound also began to move to it's present lows. So, given the clear chronological structure of the french buying and selling process, having accepted the offer and with his buying having paid the 10% deposit required, our client knew precisely the date on which contracts (the Acte de Vente) would be signed. His mind now turned to his options with regards to extracting the euros and realising them as sterling. He options were: 1. To provide his notaire with details of his own France based euro account, into which the notaire could deposit funds on the day of completion and from which our client could then arrange for their onward transmission to the UK. 2. To provide the notaire with his UK GBP account details, that the notaire might send the euro sum directly to the UK. 3. To provide the notaire with our EUR denominated client trust account details, that the notaire might credit us and we could facilitate the exchange and transmission of funds to our client's account. We would always advise client to avoid the second option. Here's why: By asking your notaire to send euros directly to your sterling account you are inviting your bank, or indeed the notaires banking provider, to exchange the money for you. This leaves you without any even remote estimate as to what GBP sum might arrive with you. Your bank applied an arbitrary retail rate of exchange. From experience we know this retail rate is likely to be 3.5% less competitive than other non-bank channels can offer. Furthermore, the time it takes for you euros to arrive as GBP in your UK account is difficult to know and hard to estimate. We know if instances where it can take between 7 and 10 days to clear into the UK; however, it must be said that such a long time is rare and usually due to other obstacles not being factored into proceedings. Prime Cap does not mind whether you provide your own french bank details, or our EUR client account details to your notaire. We are concerned with you using a broker like us and you achieving a commercial rate of exchange. The difference between a commercial rate and a retail one can be worth many thousands of pounds to you, so, the key is to ensure that a retail banking institution is not involved in the exchange. One thing we are keen to impress here is that, although we would be delighted to facilitate the exchange of your euros into sterling, much of our work is to do with illustrating to would-be clients what they have a right to expect. We do not charge anything for our consultancy, transaction mapping or pricing services and we are often used as a benchmark against which experienced clients and advisors to high net worth families compare their current brokers. For us, there is still value in being used a resource in this way. If our service, style and rates dont directly tempt to you to engage us, then we still want to make a positive and lasting impression on your and your advisers. Now, in the scenario above, our considering which option to choose, it was agreed that our EUR client account details be provided to our client's notaire and that the proceeds of the sale be directly, electronically transmitted to us on the day of completion. We mentioned that our client enquired with us early in the process. We welcome this because it still very much remains the case that some notaires in France are unfamiliar with sending money abroad for their clients of UK origin. Like us, our client wanted to make sure that their notaire had our bank details in good time before completion, and that the notaire was content with the information they had been provided. It is worth noting that our EUR client account is held in the UK, with our bankers in London. We use one of the world's largest clearing institutions which means we know that you notaire's bank (and indeed yours) won't have any issue sending us funds, however, if your notaire is not familiar with sending euro internationally, they may not realise/appreciate that it is an international payment, rather than a local or domestic one. Now, here is where the plot thickens... We received a call from our client on the day of their completion. They were sitting in their notaires office. Bear in mind that our client had provided their notaire with our bank details days before the completion and had no objections raised. And yet, the notaire was disinclined to transfer funds to the account details provided. We understand now that this is because our client had simply printed out the IBAN and SWIFT code they wanted the money sent to. This was, in the eyes of the notaire, not formal enough and dissimilar to the conventional french 'RIB' details that typically accompany such an instruction. Why such an objection couldn't have been expressed at some point prior to the actual day of completion is something we are unlikely to ever know, and objecting in such a way did very little to insulate our client's nerves from attack. The acronym 'RIB' stands for 'Releve D'Identite Bancaire'. Translated this basically means 'Bank details'. This is typically a formal document often available from or provided by a french banking institution; an equivalent of which does not actually formally exist within the UK banking sector. It is one of these formally laid out representations of the bank details that our client's notaire was expecting, and, as our client found out, it was only this that our client was prepared to accept. Quite rightly, our client wondered how he was expected to provide such a document when they do not in fact exist in the UK. Fortunately, our client was yet to close their French euro account. This meant that he was able to provide the notaire with alternative banking details, domestic to him and in the form or a RIB (as our client has sensibly brought one to the signing). It is situations like this which inform our experience and our ability to guide our clients in the most sensible way. Going forward we will intend to suggest our client(s), were they choosing to instruct their notaire to send funds directly to us, that they bring a RIB for their french account too, just in case their notaire feigns unfamiliarity with their sensible and perfectly legitimate request for money to be sent to us in the UK. Despite having worked with hundreds of private clients repatriating money from the sale of their french properties, we had never encountered a notaire refusing to act on the instruction of the client in this way. Luckily the client could act swiftly so as not to derail the signing and, once funds were in the client french account, they were able to advise their bank to make a same currency euro to euro transmission to us. At the top of the post we mentioned that our client bought their house in France before the single currency was even in circulation. This was interesting to us because it meant that our client had no particular benchmark or EUR to GBP rate of exchange they felt they needed to aim for. Yes, they wanted to achieve a specific GBP sum from the sale of their euros, but, it wasn't the case that the rate of was at 1.30 when they bought and that anything better than that (GBP being lower) constituted a currency gain for them. They were a client without the sort of expectation that most come to us with. The sale price of the property was €2,700,000. Therefore, every fractional movement in the rate of exchange - every 0.01%- was worth the GBP equivalent of €270. We express that value in that way because, the GBP value of that €270 varies depending on the prevailing rate at the time... minute by minute, second by second, that EUR figure could be worth more or less. Generally, as mentioned, a UK retail bank will apply a premium or 'mark up' to their rate of exchange in the region of 3.5%. This would be the case if you just sent EUR to your GBP account. So, this client stood to hold onto more than €81,000 worth of currency simply by working with us on the exchange. Our commercial rates are tailored to undercut even the most competitive challenger. That is precisely the reason why we advocate the tailored pricing process we use. A computer or an algorithm cannot effectively account for the aggressive pricing of a competitor, but, an experienced broker can. One of the most competitive payment and international transfer providers in the market today is a company call Transferwise. They offer competitive rates through a convenient desktop or app based platform. However, you do not have access to an experienced operate to who will advise you to take your domestic RIB to your contract signing. Furthermore, although the rate they offer you will not be 'marked up' by any great measure, Transferwise et al will still charge you 0.35% as a stand alone fee for access to their 'trade' rate. In this scenario this still means a fee payable of €8,100. Knowing this, as we do, means we can tailor our fee or our mark up to ensure you pay less than this figure. We deal with sizeable transactions on a regular basis. We have a dedicated team whose specific purpose is to guide you and to undercut the sort of online rates you get from these technology driven challengers...and this is how we can afford (for want of a better word) to undercut so regularly and by such a margin. We warmly invite you contact us to discuss this in more detail. | 0203 172 8193 | #france #notaire #frenchproperty #selling #repatriation #euros #singlecurrency

  • Winter Wonderland: How we work with overseas property agents.

    Prime Cap is not in the business of advising on the where(s) and when(s) of buying a property abroad. Cliche abounds when it comes to the next hot-spots for international movers and shakers, speculators and red blooded capitalists. However, we know a lot of trusted and experienced friends (of the business) and partners who are happy to take you through a 'property search' and it serves us well to make 'string free' introductions to these professionals should introductions be of use|interest to those wanting counsel in the tricky and emotive world of international real-estate. Our work is to maximise the buying power of someone who holds a currency different to the one in which their intended purchase is priced; to reduce, if not remove, someone's exposure to sudden or unexpected changes in rates of exchange during the buying process, and to ensure that someone servicing a mortgage or maintaining a foreign currency balance for their activities abroad pays as little as possible in order to achieve the biggest amount of foreign currency they can. Simple!? In order to do what we do successfully, we need clients to do it for. We come by these clients by aligning ourselves, both formally and informally, with businesses and professionals who work directly with families and individuals doing what has been outlined above, and more. At the most fundamental level, getting someone to introduce you to their precious and hard won customer|client boils down to a couple of key things. It is hard to write an objective post about the referral of private clients largely because the actual practise of referring has subjective preference at its core. Generally money trumps good will when it comes to referrals from the property sector, but, as a relationship evolves, the latter overtakes the former in forming a lasting a reciprocal bond between the parties involved. Please do not mistake us as cynics. We do not consider commissioning an agent to refer work to you|us|one to be a bad thing and nor do we think less of agents for whom this is the overriding factor when it comes to selecting a firm...furthermore, we compete readily and aggressively to be the firm on the receiving end of such referral. Assuming that every FX broker pays a commission to an introducer and that every agent receives one will allow us to broaden the topic and truly establish what differentiates one broker from another when the playing field is in fact levelled. Principles and idealism do not pay the mortgage and, whilst Prime Cap is lucky enough to receive a larger number of non-commissioned referrals than most, we do have to work hard at reminding our partners just why, if not for the commission, we are best in class at what we do and therefore should be top of their list of 'valuable contacts' for internationally engaged individuals. Reasonable Margin Our head of business development remembers a conversation (some years ago now) with the CEO of a recognisable UK based high street estate agents. Although working with numerous foreign buyers bringing non-sterling capital in to the UK, the reason the agent did not refer a currency broker is because, in the words of said CEO, incorporating or recommending any specific third party for currency services was "too fraught". Reading the room, it was clear the agent wouldn't be moving to recommend a foreign currency company. The reason being that the agent had concluded that their former partner for currency services did not have a unilateral approach to pricing foreign exchange transactions. Individual brokers working for their erstwhile nominated partner were at liberty to dictate the rate|margin the client received. Hence, the agent had found on a number of occasions that their client had not received the most competitive rate and, in instances where profit had been generated on a transaction the margin applied was disproportionately weighted in favour of the broker. So, the margin the erstwhile partner of this estate agent had been applying to the rate of exchange had in fact resulted in negative feed back which over time compromised and undermined the integrity of the relationship between broker and agent and agent and client. "Too fraught' refers to an inability on the part of the agent to be able to rely on the broker firm, and their staff, to deal with the referred client reasonably. Needless to say, the degradation of trust in this case and the shortsightedness of the broker, or indeed the greed prompted by a purely commissioned operating model, means the agent feels unable to complement their own suite of services by referring those of another foreign exchange business. And who can blame them. Personal connections and knowing someone beyond the merely professional paradigm tends to be the main reason why one is referred. It is therefore not surprising that our brokers try to position themselves in the right places at the right times so as to meet appropriately connected potential introducers. We tend to be successful when dealing in the wealth management and legal spaces, probably because of where we are geographically located. Being referred to a client is one thing; the client engaging one's services is quite another and so it is again understandable that a referrer might seek to introduce a firm to whose value, style and motivation they can relate. What makes Prime Cap different is that so channeled and personal is our network, we often find ourselves able to offer that which most estate and search agents really want - a referral in kind. Sure, I can offer you a cut of the money i make on a transaction, but what if i could bring you someone who would use your services too? Although not always possible, this is what the Prime Cap team aspire to do. We never promise to be able to do this. Offering reciprocal introductions is not a standard part of our referral arrangements, but, over time and through close working practices with our partners it becomes easier to introduce trusted resources when we can. When we offer a commission, what is it we're putting on the table? As a broker, we make our money on the fractional mark up we apply to the rate of exchange we offer our client. Our reason for being is that our mark up is less than what anyone else would apply, so the client gets the best rate around. Prime Cap can undercut our competitors precisely because of the volume of referrals we receive. We can operate profitably on lower margins because we have more transactions and bigger value trades going through our books. The more trades we conduct and the larger they are in size, the bigger slice by which we can undercut our competition and, in turn win business and attract new referrers. It is a proportion of that fractional mark up that we offer, on occasion, to a referrer. So, the level of competition the client gets is not affected or altered because it is our profit that is shared, not their currency. The client benefits from the unique arrangements we have with our market counter-parties and our ability to scale down our margin in light of higher volumes transacted. Here is a worked example: An apartment in Chamonix costs €600,000. Our client lives in the UK so will be paying sterling. The market rate of exchange (which is what global banking institutions exchange between themselves at and is what someone might see if they Googled GBP to EUR rate of exchange) is 1.50, let's say. When selling to our client directly, their bank pockets €0.05 for every pound out client spends (that is an approximation illustrative of a margin of difference and is by no means exact). Therefore, our client pays £413,793.10 using their bank. The banks revenue on this transaction is £13,793.10. Prime Cap applies a margin of €0.01. This means our client pays €402,684.56. Prime Cap's revenue in this instance is approximately £2684.56. Please allow for the fact that the rate of exchange between GBP and EUR is not 1.50 so the figures, costs and revenue are purely illustrative. If the market rate is at 1.50 then it costs your bank a mere £400,000 to provide the client with €600,000 because they are exchanging at that market rate. Prime Cap does not transact at the market rate, so some of the £2684.56 we might realise as revenue is in fact lost|taken|paid to the bank as they mark up the rate they offer us. In the true meaning of the word 'broker', Prime Cap are arranging an exchange between a client and a banking institution (not necessarily the institution the client banks with themselves). The client is able to benefit from the unique terms and relationship Prime Cap has with it's mark counter-parties (the institutions we have currency lines with). The bank recognises us as a broker and so offer us a better rate of exchange. The sad fact is that the client could never hope to achieve the rates we offer were they dealing directly with a bank; for one thing, a bank does not view an individual in the same way as they do a business like us. It is a percentage of our revenue that we pay to the introducer and, because that revenue is only realised once the deal has been executed|settled, the client's rate and exchange is not actually affected by any fixed arrangement with an introducer. At Prime Cap we think it is important to a) acknowledge how we make our money and b) provide clients with an understanding of how an exchange is completed. Much has been said about 'hidden charges' and it has been argued that the margin a bank applies is tantamount to an extortionate fee they do not declare. We do not think that is a fair understanding of the mechanics of foreign exchange. Your bank has a profit margin just like any other business. Some banks apply less of a margin and every person is at liberty to decide whether to accept a rate or not. Transparency is something we pride ourselves on delivering and, especially where our partners are concerned, it is one of the main reasons why we are referred as broadly as we are. Our margin is low and never withheld. So, if you happen to be a property agent and you would like to discuss what commission percentage we offer, be assured that it will be a percentage of the revenue generated off an exchange priced in order to ensure, unequivocally, that a client gets optimum competition. We are happy for you to negotiate with us to achieve a higher commission percentage, but we will not widen the margin the client receives as a means of offsetting the commission you expect. If you would like to discuss any of the figures, terms, concepts or practises discussed above then please arrange a convenient time to speak with our management team by messaging #alps #zurich #swissproperty #buyinginaustria #buyingagent #chamonixproperty #skiproperty

  • How to: send multiple payments, cheaply.

    There are all manner of elaborate ways for big businesses to inject stunningly convoluted mechanisms for multiple payments associated with payroll, top-ups and other batch or bulk transmissions. Annoyingly for small businesses it always tends to cost more than it should and take up a fair bit of time, particularly when the recipient is abroad. So, in this simple and quick post we will give two examples of clients of ours who make use of us to send multiple payments. We'll explain how we can bring the cost down and how we can speed up the process for businesses of all sizes. One of our clients is a translation business. They pay free lancers abroad for their services; ad hoc and varying amounts. Their services are charged in GBP and so our client pays the free lancer in GBP. There is no currency exchange involved for our client and the exposure (the effect of movements in the rate of exchange) is carried by our client's recipient(s). We could serve as the currency broker for the recipient, but, this is not the focus of our post today. Why would a UK business use a payments provider to send sterling abroad? The simple reason is because our bank charges us less to send a payment abroad than they do a business whose core activity is not payments. We can achieve wholesale pricing on payments we make. Provided we then charge our client less than their bank, our client makes a saving on that payment cost. If HSBC charge £16 to send funds abroad and we only charge £10, then our client saves £6, obviously. This may not seem like much if the payment is infrequent, but, the client in question usually sends about 100-120 payments a month. Therefore we are saving them a minimum of £600 a month. Furthermore, were they to use their bank, each payment would need to be input manually and released accordingly. With our simple online system our client can send us all the GBP they wish to transmit - instantly and for free as it would be a domestic GBP 'Faster Payment' - and once logged in to our system they just select who they want to pay from a pre-loaded menu, how much they wish to send and when they want for the payment to arrive. This is a tremendously convenient feature and leverages the smart tech focus of our system to speed up the process of inputting all those payments. What's more, the client can pre-book for a payment to go out on a particular date. So, whomever it is in accounts can sit down on a Monday and create all of the payments they want to go out on the following Thursday. The only thing they need to do is make sure the GBP total is with us on Thursday, if not before, so that we have something to send for them. Every payment is then searchable on our system and easily identifiable. Unlike with their online banking, the client can even search by beneficiary. So, they can easily and quickly identify when they last paid a certain free lancer, the sate on which the payment left us and the time it should have taken for the money to arrive at the other end. It is a simple matter of fact - online banking services, in their current form, do not do this. Where there is a foreign currency element to the instruction, our client can login at any time and buy the foreign currency needed. They might chose to do this when they consider the rate to be at a favourable level; or, in fact, if they are keen to pre-empt what they fear might be a drop in the rate. Our system allows businesses to act when they want to and because of the emphasis we place on product selection, they don't need to pay us until the actual payments need to be sent. One of our clients imports sophisticated furnishings from numerous suppliers across EMEA. Usually these items are priced/invoiced in US dollar. So, once they know who they need to pay and what amount should be sent, our client buys the total US sum they require. They can then login to 'draw down' from that pre-paid USD pot. They can do this months before the payment needs to be sent if they wish (and provided their are sufficiently liquid). Again, in this instance our client's bank charges them £27 just to make an international payment to their suppliers. We can cut this cost by nearly two thirds and improve their rate of exchange too. So, whilst we hawk ourselves out as currency brokers, we are also a businesses that can speed up the time spent inputting payments and reduce the cost of those payments too. All of this is part of the service and comes at no extra cost to our customers. If you would like to become a Prime Cap client we invite you to give us a call on 0203 172 8193. Alternatively you can apply to become a client directly HERE. #freight #payments #batch #wire #transmit #sterling #online

  • A simple guide to buying a property in France and how currency comes in to it.

    Between 1995 and 2010 there was a distinct boom in the number of families buying houses in France. Subsequent changes in French legislation (relating to capital gains tax on second properties), movements in the rate of exchange and concerns over consumer credit in the UK have seen shifts in the flow of money across the channel, but, the process and the specifics of the procedure remain unchanged. We look at how to do it, what are the stages to 'the buying process' and how do currency payments and exchange rates affect buyers and sellers alike? On the face of it the process is quite similar to that of the UK. You view a property and move to make an offer. The offer is agreed and then the format for buying comes into effect. Unlike in the UK though, selling properties in France is a licensed activity which usually means a more hands-on, formulaic and clear experience for all concerned. An agent receives a 'mandate' to sell a property and it is through them and the local Notaire that the process...proceeds. For what it is worth, if you are actively looking at the time you read this post, we would be quite happy to connect you to some extremely competent agents operating in Paris, the Dordogne, Provence and on the Cote D'Azur. Just ask. So, you've seen the house you want and you make an offer. If we suppose this offer is accepted, the agent then presents you with the paperwork. Within 7 days of the signing of the paperwork - the 'compromis de vente - you will be required to pay a 10% deposit. This deposit is redeemable if your buyer pulls out. If you pull out, provided there is no 'clause suspensive' (or reason undermining the sale), the deposit is forfeit. So, as the buyer, your first concern is the readying of money to pay this 10% deposit. This amount is paid directly to the notiare for the locale in which your a buying. The notaire is the local state representative. They are charged with conducting the UK equivalent of searches. They are both the collector of payment and the signer and settler of the transaction. The first rate of exchange you will have to consider, assuming you have not already availed yourself of a preferred company through which you might conduct an exchange, is the one you face for converting your sterling into euros in compliance with the 'compromis de vente'. Your notaire and the agent in France will inform you directly of the date on which the deposit needs to be paid. Delaying this payment for whatever reason may leave you liable to penalty, although this rarely happens. After your seven day 'cooling off' period after the acceptance of the offer, money needs to be in the notaire's account for the process to continue. You can use a company like Prime Cap to send your sterling to France. We can either deposit money in to your french bank account, one which we can advise and guide you on setting up by way of our relationships with third party domestic facilitators, or, you can ask us to credit the appropriate euro amount into the notaire's account directly. Specific referencing of the payment - so, what the notaire would see as the identifying marks of your incoming payment - can be included on the transmission. Furthermore, we can provide you with a direct and immediate confirmation showing where your money is going and when it will arrive. You will not know the GBP cost of the euros you want to buy until you actually explicitly instruct for the exchange to go ahead. Whilst you will always be encouraged to make use of the 7 day period between the document signing and the arrival of the deposit amount, we work with you to make sure you've not left it too late for the funds to clear on the right date. Bear in mind that your UK bank might have a daily limit on the amount of money you can move from your online banking facility. Usually you can visit your UK bank in person and instruct them to transmit the whole amount in one go, but, you need to remember that this does not necessarily mean your money will arrive with us the same day. We advise you to take this in to account during that 7 day period and please do not leave it to the last minute. Twelve weeks after the signing of the 'compromis de vente' and provided no issues are flagged by the notaire, comes the completion, which is referred to as the 'Acte de vente'. This is when you will have to pay the remaining balance to the notaire. Your agent in France will serve as your go-to point of contact for all communications with the notaire and your vendor. Unlike in the UK there is no role in this process for a solicitor or legal representative. That is all taken care of at a local level but the supposedly impartial notaire. Also unlike the UK, you won't have to worry about being gazzumped during this period. The french process locks in the buyer and seller which means that, provided the terms are met, far fewer purchases fall through than in the UK. There will undoubtedly be a difference between the rate of exchange you achieve for the deposit payment and the rate of exchange you can achieve for the balance of the purchase. Prime Cap can talk you through making use of contracts which fix the rate of exchange for both payments. Your UK bank does not offer you the ability to fix one rate for both payments, but it is a standardised and useful inclusion to our offering and something that, whilst not actively advocated, forms part of any discussion that should take place between you and your currency broker. Again, on the day of completion, funds need to already be with the notaire. If you choose not to fix your rate of exchange you may find that it has gotten better or worse since the day you paid your deposit. In effect, this means that the sterling cost of the property has either risen or fallen depending on the movement in the rate. We strongly advise that you acquaint yourself with what it would mean were the rate to drop sharply. Can you afford it? We have had a number of instances where a buyer is actually unable to complete because they had not accounted for the fact that the rate of exchange had dropped. This left them without enough sterling to buy the euro amount they had committed to. During the course of your relocation/integration into France, whether you are buying for a second/holiday home or relocating totally, you will need to open a french bank account. Once you have your account set up you could drip-feed funds across when the rate is good using Prime Cap's services - of course, this relies on the rate improving over the twelve week period. You will usually have to sign the 'act de vente' in person and all parties will usually need to be at the notaire's office on the day of completion, or at least appoint a proxy to be there for you. Our system will provide you with a confirmation of payment at the precise time we release your sterling to the notaire. If you want we can even copy the notaire in to the email notification of the money being sent. This means that you should be able to confirm the arrival of your deposit and subsequently your balance amount before you visit the notaire for the completion signing. The formulaic nature of the French buying process means that, in essence, the whole thing is more straight forward and predictable than that of the UK. You are not waiting around for one solicitor to respond to another. Also, the agent involved in the process is wholly committed to seeing the purchase through and they can serve as a valuable point of contact especially, if you're not too confident with your french. Planning and calling on a broker to advise you of the current rates of exchange, even when you are viewing, is highly advisable. Brokers like Prime Cap do not charge on an hourly basis like a solicitor. So, you can call, gets quotes and chat things through with us as many times as you like, even if you don\t buy your currency from us. Bear in mind: There is no sense in going to look at a series of properties only to find that the rate of exchange means they're actually beyond your reach. We had one buyer who thanked us for suggesting they use a £1 for €1 calculation when conducting their search, because, the rate of exchange is, was and likely will be ever higher than 1 for 1, so, the buyer felt as though they were receiving quite a sizeable discount. Put to one side the fact that you will get a better rate of exchange from Prime Cap than you from you bank and you begin to see that the transparency of our service and the fact that someone is there to troubleshoot, support and guide you, is a very valuable aspect to the way we work. An improvement in the rate of exchange is a 'given'. And when you accept this fact, you can begin to truly appreciate the other bits of the service. Even if we gave you the same rate as your bank, which we won't, you would be better off engaging our expertise than trying to do it all yourself during a time that is highly emotional and typically conducted in a foreign language. 0203 172 8193 #france #buyinginfrance #notaire #agent #actedevente #compromisdevente #forward #stagespayment #deposit

  • Safety in numbers: 5 reasons an accountant should align themselves with a currency broker...

    1. Advances in online facilities mean that you can now login to work with a nominated currency broker across a number of different financial verticals, for instance creating reports, confirming orders and capital flows, and rates of exchange as well as receiving eyes-on access to your clients' activity - which can, on the invitation and authorisation of your client, extend to the actual execution of transactions. ​​Without an online system accountants can or could only rely on verbal or manual updates and reports from their brokers. More often than not a business would rely solely on their accountants advice as to whether a broker was the right business to use to conduct foreign currency payments...and, in instances where an accountant might not have a preferred broker, the client might simply use their bank, to their significant cost. Our system(s) enables one user to book a transaction and for that action to be escalated up the corporate chain to be sanctioned by a more senior party. This, in itself, means that work can be done within a defined workflow protocol without inconvenience to the parties involved and ensuring a customer's reliance on their accountant's guidance is not undermined. 2. By referring a broker you know, like and trust you are enabling your client to provide you with consistently formatted information relating to their international payments and foreign exchange activities. By referring someone like Prime Cap you are helping yourself as well as your client. One of the most off-putting aspects of actively recommending a support business like Prime Cap is the potential for our systems and formats to be at odds with the formats, practises and preferences of our partners and the way they recommend their clients to record and report. By harmonising our online solutions and enhancing the detail and complexity of our reporting and recording templates we provide you, as your customer's accountant, with more of the important information, clearly shown and easily understood. 3. In precisely the same way that you might be relied on to provide insight on strategy and the suitability of certain partners and service providers who offer lending/borrowing and capital raising or investment, foreign exchange and the expertise of a broker are services and tools that are only beneficial to your client. We fit in nicely as part of the 'portfolio of service providers' offered up by a number of our peers in the professional and private client business services space. We do offer a profit share arrangement to certain strategic partners, but, as a business that is driven by offering the lowest margins to our customers, we make no apologies for the fact that any profit share is secondary to the value we are committed to giving customers in the first instance. 4. Your client could improve their foreign currency bottom line by as much as 4% on rates of exchange alone. Simply by us improving the rate of exchange, your customer is reducing what they need to pay to buy stock priced in a foreign currency. Likewise, for clients you have who are earning or selling to foreign clients, we can assist them in realising the most GBP possible for the foreign currency revenue they might have accumulated. By referring a business like Prime Cap you are ensuring your client gets more than just your expertise. They get a driven and committed service provider experienced in overseeing a strategic approach to FX. 5. International payroll costs can be reduced not just for you but also for your client. Many payroll services focus purely on sending a GBP amount to the right person on the right date and taking into account the appropriate amount of tax. What happens if the employee is/lives overseas? If you are tasked with getting their salary to them, but, their account is overseas and therefore denominated in another currency, the recipient is disadvantaged by the arbitrary rate that will be applied by the receiving bank. First off, a firm like Prime Cap may be able to offer lower international transfer costs than those of your bank. An example of this being: a client of ours who pays overseas free-lancers. He pays them a fixed sterling sum, so, the currency exposure is carried by the recipient; however, the client uses us to send the sterling sum precisely because the cost of doing so through us is over 50% cheaper than through their bank. The employees/free-lancers in question are welcome to become clients of Prime Cap in their own right and thereby manage and handle the foreign currency amount they receive, but, that personal arrangement has little to do with our client's accountant. We invite Independent or smaller practitioners to call us to see how what we can do can improve the efficiency of their own currency activities and those of their clients. For larger practises, working with a currency broker should not be seen as threat to customer service. If you choose wisely, you are only strengthening your position and serving the interests of your client. We are available on 0203 172 8193. #Accountant #Accountancy #foreignexchange #currencyexchange #currencypayments #payments

  • CONTRACTS | What is a 'Same Day' contract, who uses it and why?

    In earlier posts within our Library we talk about 'Forward' and "spot' contracts. The reason this is going to be a slightly briefer post is simply because a 'Same Day' contract is rather like the other two, except that our client has made an express request to have at least the ability to receive their currency on the same day they bought it. Let's explain: The 'Spot' contract is the standard one used in most capital markets transactions. It prices a rate or an asset in real-time, but it allows for two days between the purchase and the settlement from you the client. This two day period allows you to get your ducks in a row, liquidate your assets to pay for what you've bought, instruct your bank to send money to the right place...generally to give you a bit of breathing space after you've instructed us to buy your currency. One of the caveats of downsides of the spot contract is that, in the same way that you are given up to 2 days to get you settlement sum to us, we are limited in our ability to send out the purchased currency until two days hence. In effect we are saying to whichever institution we have bought your currency from 'We will have the customer's money in our GBP account for you to debit two days from now'... conversely, the institution we are buying your currency from says 'we will have the currency the customer has bought, credited to your foreign currency account two days from now'. So, with a spot contract we don't actually have your currency with us until two days from the booking...on the 'value date'. Whilst this is generally not a problem for companies like Prime Cap and our partners (because we hold enough currency that we can release what you've bought before our source suppliers it to us physically) it is sensible to contractual commit both parties, you and the source, to providing the settlement amount and the foreign currency amount, on the same day. It basically just makes for a smoother ride and gives you some assurance/reassurance that funds couldn't be available any quicker. If you didn't send the settlement sum on the 'same day' then, obviously, we would not be able to send the funds out until your settlement arrived. Furthermore, we are not going to hunt you down if you settlement doesn't arrive on the same day. One thing worth noting about a 'Same Day' contract is that it can come at a fractional premium. The rate offered on it might not be quite as competitive as that of a Spot contract...and this is because it is not the standard contract. To have access to the currency you've bought 'Same Day' you are asking the institutions involved to do something atypical. The cost difference really isn't sufficiently great to dissuade one from considering a same day contract, but also, if you're not absolutely sure you can get us yours settlement same day, or you don't have funds on account already, why pay more? | 0203 172 8193 | #samedaycontract #settlement #clearance

  • 3 things to do when 'markets' are volatile.

    Whilst volatility is an analytical term based on deviation and statistics (for the most part), when it comes to rates of exchange and exchanging one currency for another for whatever reason, volatility essentially means unpredictable change in rates. Volatile rates of exchange can be good or they can be bad for businesses and individuals, it rather depends on what currency you want to 'sell' and what currency you want to 'buy'. So, given that you can be either positively or negatively affected by volatility in the currency markets, we look briefly at some simple ways to mitigate the effect of such unpredictability in rate movements and to protect the value of the currency you hold as far as possible. 1 Identify what rate of exchange achieves an acceptable margin for you and your business. If you import items from abroad which you then sell in the UK, your margin will move up or down with the rate of exchange. By eliminating your exposure to that rate movement you can fix your notional margin for anywhere up to 18 months. This is done by using a what is called a 'forward contract'. Yes, cash flow will determine you ability to use this type of contract (and for how long) but, when 5-10% could be added to your costs within just 6 months simply because of movements in rates of exchange, putting aside a lump sum that enables you to secure a forward contract is something worth considering in earnest. When you have established the rate of exchange you need to aim for, or the one that enables you to achieve an acceptable margin, you can begin to devise a set of rules that will effectively refine and hone your approach to your payments activities. 2 Take a breath and work out precisely what a drop in the value of the currency you hold would mean for your business and, in discussion with your broker, establish whether there is any sense in delaying your exchange until waters calm. Whilst you may be considering paying the invoice sat in front of you, and headlines and dinner party chatter has perhaps given you concerns over where the rate of exchange might end up and thusly how likely it is you may have to pay more, talk to someone who can expressly quantify what it might cost you. Prime Cap can quantify potential upside as well as downside. Availing yourself of an understanding of these may assist you in cutting through the rhetoric and innuendo. 3 Plan ahead. It is never too early to speak with a currency specialist about how sharp and unpredictable changes in rates of exchange might affect you. Do remember, volatility can be both positive and negative. Volatility simply means movement up and down and an inability to assuredly predict where a rate might end up. It is essentially instability and this can be good as well as, have a plan. Your broker should be able to talk you through what rate it might be reasonable for you to 'aim' for and also what rate is sufficiently undesirable to, if approached or hit, warrant you to strongly consider, if not act to, cut your losses...if indeed you're minded so to do. Again, your broker is not there to tell you where the rate will go, but, an experienced broker should be more than willing to lend you their views on what is reasonable to expect based on the circumstances that prevail and to play-out ranges and results with you. We've often been told that one of the most valuable things we can do is to emphasise the value in speaking with a currency specialist. As a broker we tend to angle towards inviting customers to engage our services over those of another, but, true confidence in the value of one's role is most effectively and definitely displayed when one steps out of the pitching ring and simply lends one's voice to endorsing a concept. We do not mind if you do not engage Prime Cap, but, we know it to be true that you will be best equipped to weather, deal with and in appropriate circumstances capitalise on movements in rates of exchange by speaking with a specialist currency company rather than relying on the reactionary and sub-par platitudes of your high-street bank. www, | 0203 417 5781 | #currencyexchange #volatility #business #invoices #forward

  • "No Deal" | What are your options? Your 4 point plan.

    In the lead up to the UK's exit from the EU we will find sterling on a hair trigger. The ability to second guess which way a currency's value will move is as elusive as partisan free rhetoric in Westminster. So, because neither you nor we can seriously hope to accurately predict where the rate will end up (so numerous are the possible outcomes) we find ourselves incentivised to tell you about how to make sure you're not too drastically affected by whatever the result ends up being. 1 First off...if you have invoices on your desk that you know need paying in the next 3 to 6 months and you can afford to settle them now, don't, just buy the currency you need in order to do so now. Keep your capital where it is, but, take out a contract 'buying forward' to the tune of at least some of the foreign currency you'll need to settle those invoices in the months to come. If the rate drops then you've bought in well. If the rate rises then you don't need to pay it any attention because you've covered yourself. 2 Ask your supplier to invoice you in Sterling. By requesting that your overseas supplier take on the currency risk, you can forecast what you need to accumulate far more easily. Granted, a number of suppliers will not do this, but, if you would prefer clarity and are prepared to pay a fractional premium in order to get it then your counter-parties may find that more appealing all together. 3 Earning in a foreign currency? Whether you are an individual salaried in a foreign currency or a business selling in overseas markets but reporting in sterling, accurately forecasting a proportion of those sales and taking steps to protect your revenue is sensible. Similar in some respect to the importer 'buying forward', the company selling to overseas markets should be trying to extend access to a weak pound for as long as they can...because doing so cements if not increases margin. 4 Work out your break even rate. If you're a business operating in any way with foreign currencies or customers paying you in something other than sterling then you need to be aware of your break even rate, and understand how to use it as a guiding principle for your currency activities. Our expert brokers place great weight on the importance of knowing your 'break even' rate. Centre around an understanding of your margin (desired, implied or immovable) the first step towards mitigating exposure to rate movements is to work out the relationship between unit price and RRP (or it's equivalents). If you'd like to find out more, then do give us a call. | 02031728193 | #brexit #nodeal #forwardbuying #Forwardcontract #euroexchange

  • 4 reasons why you should pay your mortgage through an FX broker.

    Unsure why, other than surmising that people don’t really understand the breadth of work the deliverable FX sector is capable of handling, one of the most common assumptions made is that firms like Prime Cap only deal with 'sizeable' currency conversions. Not so! It is certainly true to say that the benefits of the improved spread/rate we offer are more clearly evident on big(ger) conversions because 3% of £100,000 is numerically greater than 3% of £1000, but, that does not mean that a company, ours in particular, will arbitrarily turn away smaller payments just because of the amount. In fact, you’d be accurate in thinking that the business with 100 clients doing small amounts regularly is more stable than the firm who has just the one client doing a bigger sum once. Diversification is key to a good currency dealer being able to consistently deliver a competitive margin to all their clients. With this in mind there are a couple of ways you can approach making smaller regular payments and there is just no reason why you should be put off of using a cheaper specialist just because of erroneous assumption… 1. LOWER TRANSFER FEES - In the same way that an FX firm can pass on the benefit of it’s wholesale buying power when it comes to the actual rate of exchange, so too can it pass on the benefit of economies of scale when it comes to the processing and associated costs of sending money abroad. The two costly aspects of sending a payment are the cost of wiring it and the margin within the rate of exchange and your bank will always charge you more for using their platform. It might cost you £16 to send a payment to Spain using your UK high Street bank. At the same time, because they do many many more payments than you a day, week or month, it might only cost an FX business £5 (or less). Hence, the FX firm can undercut your bank on the associated costs. In fact, this is precisely what companies like TransferWise sell themselves on. Their ads state 80% saving vs. your bank. This is because they charge you £3 rather than £30. It is clever and it means you get a saving, but, as the savvy among you will have noticed, it does not tell you anything a bout their rate of exchange per say. Also, although it doesn't matter because a saving is a saving, they're not 'giving' you a payment cheaper; they're actually just sending it in a different way. It is a very clever strategy and it took them a while before they attracted enough clients to reach critical mass in terms of asking a profit, but, ask yourself...are you really going to send £250,000 over an app? 2. A BETTER RATE OF EXCHANGE - Foreign currency companies have smaller margins for a number of reasons and are able to negotiate their costs from the whole of market. This means that either by locking in a rate (which we will come to) or by transacting each month, you will pay an average of about 2% less vs. your bank on a foreign exchange conversion simply because they will take less off the top of the euro they're selling you. One of the particularly appealing things about a non-bank company is that you can actually call them up each month to compare their rate against anyone else. Doing this sort of thing manually gives you the option to suspend a payment if the rate is particularly poor, or increase the amount you send when rates are good. Either way, you'll be talking to someone who knows what you're trying to achieve than a call centre operative who rarely gets questions about currency let alone have any control at all over what rate you might receive were you to opt to use them. As touched on above, you will definitely be paying less to send the funds internationally, so, all in all the whole process should be more cost effective by the rate and the payment cost and dealt with more efficiently because all staff at FX firms like Prime Cap know what they are doing when it comes to sending payments…you wont need to be on hold to get through to the correct department if you have a question or want to change an aspect of your payment. At Prime Cap we enable you to do all this online (if you want to), a bit like online banking, but, you have a direct and dedicated telephone link to your dealer who a) can see what you see and b) can anticipate precisely what you may need help with, then and there. 3. AUTOMATE THE PROCESS - Some companies offer what is called a ‘regular monthly transfer service’. Generally this is a direct debit service that allows you to determine how many pounds are debited for conversion or how many/much of the foreign currency you want to buy each month. We think these ‘plans’ do not offer the level of competition you deserve; in addition to which it is sometimes difficult to compare the rates used, because, under the direct debit clearing conditions you may not know precisely when your money was converted - is it on the day they debit your account, or is it on the day they credit the broker? It is not particularly transparent, but, it is very convenient. The best of both worlds comes if you select a standing order payment for your monthly mortgage amount. You are the one who controls this in a far more direct way than with a direct debit. Using the standing order method means that you broker converts funds when they receive them…not necessarily when they are doing all the other payments for that month. This means you will get a real time update as to the rate you got and as to when funds will arrive ‘at the other end’. This way is generally more competitive for you and still allows you to plan for unexpected moves in the market. What this way does not do is debit you to the tune of a certain foreign currency amount, but there are simple ways to accommodate for this. Undertaking a simple analytical exercise with Prime Cap's dealing team will enable you to offset any rate movements and equip you to manage your monthly transmissions more transparently. Anecdotally, having worked at on the very first non-bank FX firms to offer a structured 'Regular monthly transfer', we can attest to the fact that the rate of exchange should be far far more competitive on those products than they are. The company has some 10k clients. Let's say 20% of them send £1000 per month for the overseas mortgage and using their regular transfer service. So, the company is therefore converting £2,000,000 each month. Typically the firm in question would apply a rate with a 3% 'mark up' on it. They did so because they knew they banking competitors did not offer such a convenient service and so they had little commercial incentive to improve their rate. We don't think it fair, even in the face of the costs to send a payment, a business should make a revenue of £60k when all they're really doing is performing a debiting exercise on a set day each month. Maybe that's just us. 4. FIX A LONGER TERM RATE If we were to agree that the average payment towards a foreign currency mortgage is in the region of €1200 then, over the course of a year, someone might need to buy €14,400, let's say. Do you think that when exchange rates are good someone would be inclined to lock in that rate for a longer period? It not only allows them to forecast and know their expenses, but, it may begin to constitute a saving if the rate were to depreciate? In the same way that a business can buy the currency it needs to settle an invoice prior to the date on which the settlement is due, an individual can buy however much currency they need/want and simply pay for it further down the line or on a month by month basis. The average rate of exchange from sterling to euro for 2016 was 1.28. This means the average cost of someone’s €1200 mortgage was £937.50. If one had locked in a 12 month rate in February of 2016 when the rate was 1.40 they would have saved themselves £919.29 for the year – nearly a month's mortgage payment. When I see people chasing reductions of £150 on their utilities or moving bank accounts for £50 I find myself frustrated that more people do not mend the roof when the currency sun is high. Yes, the caveat to using a forward contract for your monthly payments is that you may have to lodge 10% with the company you take out the contract with. In theory, therefore, what your saving on the rate of exchange simply remains with the firm until the 12 months is up. That is the way to look at it… So, to conclude, FX firms can reduce the fees you pay when you send your monthly payment. They can also ensure that you are paying fewer pounds for that same fixed foreign currency amount. You can sit back and allow Prime Cap to take care of the payment and, if so inclined, you can cement your monthly payment for a year. Bear in mind that these types of tools and tricks don’t just relate to mortgage payments. They come in to their own with any smaller regular payment whether you are a business or private client. | 0203 172 8193 | #sterling #europe #france #PrimeCap #foreign #international #directdebit #payment #broker #FX #euro

  • What does it mean to be an 'independent' currency broker? Does it even matter?

    The concept of an 'independent' broker is one we have coined ourselves. It is not a term in common parlance within the currency exchange sector, but, in the context of owner managed businesses you could argue that any FX firm not listed publicly is of course 'independent'. So, what do we mean when we say 'independent'? Essentially it boils down to the discretion we give our brokers. In certain currency companies there is an imposed 'target margin' that brokers have to apply to a rate of exchange. As sort of 'minimum' revenue, if you will. This is perhaps understandable in organisations where overheads are a sizeable concern. The minimum revenue on a transaction might be the 'breakeven' point, however, it is usually the case that 'the house' inflates that minimum revenue figure required so as to ensure operating profit. Again, no harm in that, but, it does mean that a business like ours has the room to undercut, because of our structure. We have the same access, capacity and systems as far far larger organisations, but, we address every matter on a case by case basis. We're independent in the sense that our stakeholders (whether that be shareholders, directors or partners) have no say over who we buy our currency from, the margin by which we have to markup our currency, or the style in which we engage with our clients. These are all things set by us and our brokers, as a team. Consider this example: An individual who owns a house in France and sends £2000 every three months to pay for up keep and expenses (cleaner, gardener etc. etc.). For some 'payment institutions' the minimum revenue figure their brokers must achieve might be £20, others £50... On a £2000 exchange the broker would need to apply a mark-up equivalent to a revenue of £20. If the broker does not achieve this minimum revenue figure then the difference is paid by the broker from the revenue generated on any and all other transactions conducted. So there is a distinct and indelible incentive for the broker to take a certain margin... £20 is equivalent to a mark-up or 'margin' of 1% on an exchange of £2000. Consider then that a bank may well charge a currency company to send the funds to an account abroad. At Prime Cap we are charged £10 for every transfer. This means that, if we worked by the same minimum £20 revenue target, with a £10 wire fee (which we always pass on to our client at 'cost') the customer is paying 1.5% minimum for the use of a currency companies' services. Not bad, but, that £20 or 1% margin is the minimum that broker is expected to make in revenue on a transaction. There is nothing stopping that broker marking up their rate by many multiples of that 1%. Fine, when a bank applies a mark-up of 3.5% before you've even gotten out of bed, the broker is still appealing, but, consider how many clients the broker needs in order to earn an attractive salary on the figure above. £20 a transaction...that would require a lot of customers... Hence, the broker either needs a lot of customers, or he must widen his margin on those he has, or he seeks larger volume transactions... We're not saying that the sorts of target margins imposed by the larger 'factory firms' on their brokers are wrong... ..they're still far more competitive than a high street bank, but, what we are saying is that the broker has no control over whether that margin should or should not be applied, and this presents a 'value vacuum' that we comfortably and happily fill. Typically, when Prime Cap is introduced to a client there are preliminary smaller payments to be made to and from a country. These can be ongoing, indefinitely; based on the example above, most firms would not entertain smaller value transactions. It would be considered a waste of time when larger transactions could bring in greater revenue with potentially less leg-work require. Our approach is different. We take a longer term view. On the one hand, hundreds of smaller payments over many years contribute for forming a stronger more diversified client portfolio for us...but also, we want to a make a good impression so that, should anything more complex come along, we have shown ourselves to be committed and credible, and the best place for such an exchange. Our approach is at odds with the more transactional approach of many brokers. The company that turns away a smaller exchange where they have to be more competitive is the company that isn't differentiating themselves, at least in this market. Incremental portfolio growth (compound interest, if you will), coupled with the expertise we have, and the fact that we a privately owned, means we will outlast many of the front office teams we come up against. Essentially, we can afford to remain in the market by tailoring our price points... ...our profit is reinvested into tighter margins and contingency to offset any drop in activity. Many middle-tier currency firms plough profit back into directors' dividends or unsustainable commission structures for their brokers. Strangely, it is a little bit like how the UK has benefitted from being outside the EU single currency block. Supply and demand affect the value of the pound. When other countries couldn't devalue to make themselves and their products move competitive, the UK could, which meant it could keep afloat and competitive within global market. In a market that has certain fixed costs for participation, our independence means we are nimble and more adaptable. We're not constantly chasing profit or return on investment to our share or stakeholders, and we are far more open to taking a much longer term view. Our brokers will look at the longer term potential value in not just the transactions a client proposes, but also the value of their good favour in terms of word of mouth reach. We need neither the colossal scale of online and app based providers who offer tiny margins; nor do we need to exclude all but the largest sized transactions. We can afford to sell currency at a competitive price across a number of convenient and simple platforms, and at the same time offer personal insight and guidance to individuals and companies with varying needs. It's a nice place to be. #sales #margin #currency #independent #boutiquebroker #sendmoney #undercut

  • Private Schooling | fees in a foreign currency? Is your process costing you more than it needs to?

    Always looking for pertinent ways to illustrate the uses of a currency broker, we note that payments considered arbitrary or every-day tend to be overlooked when it comes to improving process and, in the case of paying a private school for your child's tuition, reducing the actual cost of such tuition by simply improving the rate of exchange achievable by families exchanging currencies. As we have oft commented, the means by which you instruct a payment can have andistinct effect on both the cost of the payment. By making use of regulated, tried and tested new technology to instruct a payment through a non-banking currency and payments provider, you can improve your rate and provide yourself with clarity and certainty. A currency broker will often and invariably provide you with an appealing improvement to the rate of exchange. By advising clients as to how to lock in a favourable rate, currency brokers like Prime Cap can cement their role as a key tool in minimising expense for whatever payment is being considered, but, so personal is the way someone pays for their child's tuition that it is sometimes hard to credibly persuade a parent or family office to consider such tools in earnest. Ordinarily private schools in the United Kingdom will ask you to pay them in their currency of operation. Understandably. Sure, schools like Harrow has set up overseas entities, but, being that so many pupils hail from outside the United Kingdom and yet attend the UK 'branch' of the schooling brand, parents and guardians, trusts and funding organisations who still suffer from uncompetitive rates of exchange simply by using their banking provider to exchange and transmit monies to the institution, needn't. When you know what you are expected to pay, consult with your chosen broker as to the current sterling cost. Speak with them about what could influence the rate of exchange. Ask them about ways you might ensure that this current rate is available beyond today. By that we mean, ask your broker whether there is a way of locking in the current rate (and therefore the current cost) for payments that may come your way in the coming months or years. Of course, the rate of exchange might move in your favour, so we simply mean to suggest that you might prefer to know what the foreign currency cost could be for the longer term. A decent broker will apply the same approach to your immediate or near term payment, and indeed your longer term obligations, as they might for a businesses looking to cement their costs. Making use of something like a forward contract can ensure that you pay no more over the course of a year even if the rate of exchange changes. You may not have funds liquid for a full and upfront payment and so a forward contract means you can obviate exposure to rates going against you which would mean an increase in the cost of tuition in the currency you earn. Online transaction platforms such as those offered by Prime Cap provide you with direct line of site on the transmission and movement of money. So thorough is the reporting policy of Prime Cap's online system you will arguably have more visibility over your transaction than you could ever reasonably expect to receive from your retail domestic bank, wherever that may be. Many private schools place a lot of emphasis on the connectivity of their alumnae and the extent to which a pupil's relationship with it's former school, the community it creates and the values that will always be shared, extends far beyond their graduation. We find it gratifying to note that many of the schools we are connected with (personally and by way of a more commercial alignment) see our work as truly valuable for parents resident outside the United Kingdom and paying their fees in a foreign currency. We work with a number of specialist consultancies that aide families relocating to the UK, moving from it and pursuing expert guidance as to the integration of their children into the education structures of their current country of residence as well as those globally minded families who are selecting from a worldwide pool of educational institutions. We are truly delighted to facilitate introductions to settling in services and specialist schooling and tuition consultancies such as IW Schooling Consultants, Sourcing Property Group and Holland Park Tuition & Education Consultants. So extensive is our work with the family relocation and non-resident space that we have set up a standalone suite of services for expat and non UK families and private office operations. RESi Pay is designed for non-UK and non-EU residents who have multiple payments to make relating to their UK property and family obligations in the UK. RESi Pay's services are designed as a way for busy families and individuals to centralise all of their billing in one place, with one provider and to capitalise on improved rates of exchange for those may individual outgoings. Do visit the RESi Pay site to see whether you qualify for this tailored set of services; or, just give us a call to establish whether our unique methodology might serve you better. Put simply, £35,000 annual tuition equates today to €39,725 or $47,250 today, as we write. Tomorrow, or as little as 10 minutes from now, that foreign currency cost could be €40,000 or $50,000 simply because the rate fo exchange might well move in the 'wrong' direction. Months from now everyone sending a payment of this type can be assured that the EUR or USD cost will be either higher or lower. The fact that a family may not have €40k or $50k sat in the bank and therefore elect to pay fees in instalments or termly, means that costs will fluctuate with 'the market'. This needn't be the case and the work of a broker like Prime Cap is to sensitively but precisely assess what contract of exchange suits our client, their circumstances and their preferences. We comply fully with FCA regulation and work only with FCA and HMRC compliant Authorised Payment Institutions for the purchase or sale of currency and the receipt and transmission of funds - verifiable directly through the FCA register - and we invite you to call us to discuss this topic in greater detail on: | 0203172819 | #SourcingProperty #IWSchoolingConsultants #HollandPark #Fees #Tuition #graduate #forwardcontract #currencyexchange #currencypayment #schoolfees

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