The Fall of the Multiple FX Broker Model
If your business is using multiple FX Brokers, this is a must read!
In today’s world we are conditioned to Compare Prices, Customer Service, Speed and endless more features in products and services we require/desire. One thing that often is left out is the very little consideration we give to how much time we are spending comparing.
To remain relevant to our industry and to not upset our colleagues in other fields we will look at how much time is spent comparing FX prices for Currency Transfers or International Payments and its effectiveness.
Let’s start by understanding the main reasons why we compare:
Reason 1: We feel we are receiving a bad price
Reason 2: We don’t Trust the FX broker will provide a consistent price
Reason 3: We have been ripped off by a previous Currency broker
Reason 4: We have been let down on payments not being dispatched correctly or on time
Reason 5: We have received sub-standard customer service
Reason 6: We have no tools to benchmark against
Let’s now look at how much time is spent comparing prices from 5 FX Brokers every week for the whole year:
Average call time to each currency broker: 5 minutes
Total time spent every week including the booking of the transfer: 30 mins
Total time spent in one year following this process: 26 Hours
Average salary in the UK: £26,500
Average salary per hour: £12.75
Cost of 26 Hours: £331.50
Points to take away from the above exercise:
- The person booking the trade was spent a total of 3 working days and 2 hours booking currency transfers / international payments
- The time spending booking trades has been lost and could have been better spent on other business activities
- Although the time cost was £331.50, the currency rates would have most likely fluctuated during the calls to the various brokers meaning you could have ended up with a worse rate than you received on your first call.
- You cannot compare effectively from one call to another as the mid-market rate is constantly changing every second.
- Dealing with multiple brokers means settling funds to multiple providers. This again can take further time from a banking perspective as does setting up new beneficiaries, checking details etc
- If you’re business books more than 1 trade a week the time spent could increase dramatically
Solutions
- Make sure your firm is using an online platform to execute their Foreign Exchange – this avoids any unnecessary noise
- Agree a suitable FX margin with your FX provider that works for both parties
- Benchmark against the Mid-market rate on every transfer and only use a provider that displays this at the point of execution – this will ensure you are receiving consistent pricing
- Consider hedging your currency exposure by using Forward Contracts
- Establish workable currency budget levels
- Use our Free tool on our homepage to understand how currency transfers are costing you and decide if you are happy paying this much.
How can Mayfair FX help?
- Gives you access to both Spot or Forward contracts
- Charge you a small FX margin ‘Spread’ – save up to 3% compared to using a Bank or FX Broker
- No hidden fees or charges
- Online platform to check & book currency rates 24/7
- Hassle-free registration
How to get in touch?
Call – 0203 66 77 345
Email – team@mayfairfx.com
Website – https://www.mayfairfx.com/register/
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