Foreign exchange rates notoriously fluctuate, meaning that if you don’t keep on top of them (and this can be difficult – they change daily and often more frequently), then you could stand to lose thousands of pounds. And, when you’re investing in property in the UK, you’re already talking about sums of hundreds of thousands of pounds. So, how can you make sure you’re getting the best foreign exchange rates?
Get the help of an expert
Like anything in life, the best way is to find an expert in the subject – someone who deals with foreign exchange payments on a regular basis. In this case, you’ll be looking for what we term a Foreign Exchange Specialist (FES). There are many such companies and individuals operating in this sector within the UK. A quick Google search and you’ll find a number of operators.
Certainly, a good FES should be able to find you better exchange rates than a high street bank or building society. Banks may charge hefty fees for international transfers, whereas a good FES will prove much more competitive in this respect too. A FES can also help you set up regular automated payments from abroad, saving you time and unnecessary hassle. Also, a company or individual specialising in foreign exchange will be well-versed on how the markets work, and therefore will be able to advise you on whether it would be a good idea to set up a ‘forward contract’. This would fix rates for yourself for a certain time period, meaning you would have, at least, some certainty over what is notoriously a very volatile market. They can also look out for an ideal exchange rate and fix the deal for you (a service known as ‘market order’).
How do you know which FES to trust?
Thankfully in the UK, we have a government body which registers and regulates the conduct of financial authorities. It’s referred to as the Financial Conduct Authority (FCA) and to date it has information on more than 50,000 firms in the UK responsible for providing financial products or services to customers overseas, and of course, in the UK itself.
All companies regulated (i.e approved) by them are listed on the FCA’s Financial Services Register. It will give details about that company or individual and confirm whether or not that business or person has what is known as ‘interim permission’ to provide credit to the public. But it will also alert you to companies which don’t have FCA approval, yet continue to trade, and those which have ceased to provide financial services (by listing the firm, him or her as ‘inactive’).
Benefits of the FCA Register
Not only does the FCA Register allow you to check the approval status and details of a company, it also means that should anything go wrong i.e. you are left out of pocket by the way the company or individual has operated, then it could be possible to reclaim money by applying to the Financial Ombudsman Service who, if they believe you have a case, would then refer you to the Financial Services Compensation Scheme.