Trying to beat the bankers...

[Ripster]

We use HIFX and have done for years. Fast and very easy to deal with. Always found rates to be fairly good and they do what they say. Bear in mind due top Money Laundering rules, an account (with them) can take a couple of days to set up.

 

[jrudge]

Use Moneycorp for work and pleasure!

I suspect they are all similar and all better than the banks.

The only risk is that they go bust in the middle of the deal ( which happened not long ago to Alpari).

Given this choose a decent name and avoid minority players.

 

[jfm]

I don't agree a lot of this. There are 2 limbs to you question:
1. Selling gbp and buying euro- -->. time and time again my bank offers better rates than the specialist brokers for dealing room levels say over £50k. And there is zero credit risk (other than bank going bust and you having £85k plus) and you don't lose sight of the money 2-3 days while the currency broker faffs about
2. Putting the money in a non UK bank--->. Why? Nothing in you Q says you need to do this. When the time comes to pay, transfer the euros from your UK account to the boat seller or broker account. You'll lose sight of it for only an hour. Much more straightforward.

 

[bbg]

I use xe.com. Very easy, very quick and good rates.

Satisfied customer.

 

[pagoda]

I use TransferWise, cost about 10% of the banks and transfers take place in 3 days. Use either direct transfer from your bank or a debit card

https://transferwise.com/account#/

They're the same people as started Skype (sold out to Microsoft) and recently floated in London.

+1 for transferwise. Used them with no difficulty in Norway/Uk transfers. Good rates, much cheaper than banks.

 

[dom]

I don't agree a lot of this. There are 2 limbs to you question:
1. Selling gbp and buying euro- -->. time and time again my bank offers better rates than the specialist brokers for dealing room levels say over £50k. And there is zero credit risk (other than bank going bust and you having £85k plus) and you don't lose sight of the money 2-3 days while the currency broker faffs about
2. Putting the money in a non UK bank--->. Why? Nothing in you Q says you need to do this. When the time comes to pay, transfer the euros from your UK account to the boat seller or broker account. You'll lose sight of it for only an hour. Much more straightforward.

Good advice re credit, though most FCA regulated firms should be OK, somewhat depending on how their counterparty bank clearing arrangements are set up.

Re the bank rates you refer to one has to be a bit careful. Banks routinely milk private client and SME FX transactions to a quite extraordinary degree. Good rates do exist within their wealth divisions, depending on the movements on the account. Generally FX transactions >$1m per annum, >$5m average a/c balance or a >$25m net worth will render someone eligible for 5 pip spreads (i.e. close to interbank), assuming they are not a bit dim in which case its open season! That is the best the banks can/will do and they will steadily widen from there depending on the client. The rates you refer to May simply reflect your bank's personal perceptions of you and may therefore be of limited use for comparison purposes.

I have no direct involvement in FX, but if someone wants to pm me I can give them a couple of contacts with whom they can check the prices they have been offered.

 

[Poecheng]

Thanks for the recommendations on this thread.
Had to send $ to Taiwan; Transferwise couldn't send to Taiwan but their customer response was amazing - email response to Q in about 10mins on a Sunday afternoon !
Was able to do it through Azimo - they deal with Taiwan and also allow you to send either Stg£ or US$ - so all good.

 

[JollyRodgers]

Use MoneyCorp (great interest rates). They are offering a £1 for 1 Air mile with virgin airlines.

Could take the family on holiday somewhere nice for free.

 

[jfm]

Good advice re credit, though most FCA regulated firms should be OK, somewhat depending on how their counterparty bank clearing arrangements are set up.

Re the bank rates you refer to one has to be a bit careful. Banks routinely milk private client and SME FX transactions to a quite extraordinary degree. Good rates do exist within their wealth divisions, depending on the movements on the account. Generally FX transactions >$1m per annum, >$5m average a/c balance or a >$25m net worth will render someone eligible for 5 pip spreads (i.e. close to interbank), assuming they are not a bit dim in which case its open season! That is the best the banks can/will do and they will steadily widen from there depending on the client. The rates you refer to May simply reflect your bank's personal perceptions of you and may therefore be of limited use for comparison purposes.

I have no direct involvement in FX, but if someone wants to pm me I can give them a couple of contacts with whom they can check the prices they have been offered.

Yup, fair comment Dom - the spread that milking banks offer will vary from customer to customer and size of transaction

I still maintain that people should separate the forex transaction from the banking transfer part. Many replies on this thread seem to treat them as linked. Even if I used an FX broker to buy the currency for me, I'd want my relationship bank to transmit the money so that I can shout at someone I know and who cares about my business in case of delays, and in case I need to know where the money has got stuck

BTW, on the credit risk point, many of these FX firms claim (at least) to hold funds in client (trust) accounts. I don't know the detail but that's what some have said to me. May not be enough but feels step in right direction, as regards the credit aspect. Maybe that's what you were alluding to at end of your first sentence.

 

[Elessar]

Yup, fair comment Dom - the spread that milking banks offer will vary from customer to customer and size of transaction

I still maintain that people should separate the forex transaction from the banking transfer part. Many replies on this thread seem to treat them as linked. Even if I used an FX broker to buy the currency for me, I'd want my relationship bank to transmit the money so that I can shout at someone I know and who cares about my business in case of delays, and in case I need to know where the money has got stuck

BTW, on the credit risk point, many of these FX firms claim (at least) to hold funds in client (trust) accounts. I don't know the detail but that's what some have said to me. May not be enough but feels step in right direction, as regards the credit aspect. Maybe that's what you were alluding to at end of your first sentence.

i used travelex at the airport for the forex. A good rate, booked in advance. And convenient.

Debit card in machine once I saw the cash, so I didn't lose visibility at all. (the £30k daily limit on my debit card was an unknown issue that was solved by a phone call)

For the transfer I used my rucksack

 

[dunedin]

There is a huge difference here if talking small euro transfers (even several hundred Euro) vs big Euro sums Eur25,000 upwards typically needed for boat purchase.
For big sums it is all about the FX rate - and certainly worth comparing 2-3 quotes. But this needs to be done real time, hence worth pre registering and getting approval for online sites - I was comparing quotes online whilst on phone to third dealer, who was able to tighten his offer when I told him my other offers. But quotes are only for immediate acceptance or not - so need to have done homework and tracked for a period of days/weeks and set your acceptability threshold

 

[dom]

Yup, fair comment Dom - the spread that milking banks offer will vary from customer to customer and size of transaction

I still maintain that people should separate the forex transaction from the banking transfer part. Many replies on this thread seem to treat them as linked. Even if I used an FX broker to buy the currency for me, I'd want my relationship bank to transmit the money so that I can shout at someone I know and who cares about my business in case of delays, and in case I need to know where the money has got stuck

BTW, on the credit risk point, many of these FX firms claim (at least) to hold funds in client (trust) accounts. I don't know the detail but that's what some have said to me. May not be enough but feels step in right direction, as regards the credit aspect. Maybe that's what you were alluding to at end of your first sentence.

Fully agree with separating FX and money transfer where the client possesses the necessary currency accounts - as you say easier to sort out any transfer mistakes. The FX leg is a bit different; just the other day I had to stick a friend on the phone to the ex-head of a big FX floor to emphasise just how happy the banks are to rip off their clients.

Re the credit risk I was “alluding” to; I only ever allude to anything legal! ...the area is mired with technicalities surrounding pools and sub-pools, whether the pool has been correctly created, etc. Then in 2012 the Supreme Court waded in with a ruling that upon the failure of an investment firm the client pool should include not only the money physically segregated, but also money that should have been segregated. This in turn diluted the available funds to those whose money had been properly segregated. Then came an argument as to the precise scope of this ruling ...cold towel around my head and finally over to the legal boys!

Thankfully this area has been cleaned up a good bit recently. The Financial Conduct Authority (FCA) now explicitly requires all client funds to be held in segregated client accounts within the FX broker’s counterparty bankers. Moreover, the FCA also enforces a strict capital adequacy regime on authorised firms. In the event of a bankruptcy funds held in segregated accounts will have their share of the segregated money pool returned, minus any appointed administrators' costs. Any shortfall will, for retail clients, be eligible for compensation under the Financial Services Compensation Scheme.

Note: anyone purchasing a boat or house (and this applies to bank or broker) must make clear that they are a retail client and not engaging in the transaction for investment purposes. If the bank/broker classifies you as a “market expert” your protection slides a good bit and if by chance a client is classified as a “professional” you should be aware that you are entering the dog eat dog world of finance!

All in all I’d say, for the types of transactions and amounts in question here, that investigating the FX Broker channel will be well worth it for those who don’t possess the clout to force their banks to give them a good deal. Do look the firm up though on the FCA’s website and make sure it hasn’t been dinged for anything serious: http://www.fca.org.uk/firms/systems-reporting/register