1. Do your homework on the foreign exchange (FX) company. There are a wide range of options for making payments abroad and it is important to consider your requirements. For example, do you need to make a few one-off payments or regular payments? For the latter, a specialist FX officer is the most cost effective option.
2. Look beyond banks. Technological and regulatory change has opened up the FX market, and many of the newer solutions compare favourably to banks, by offering lower fees, for example.
3. Beware of hidden charges. Two costs to consider are fees and exchange rates. Hidden charges can mask the true cost of the transaction.
4. Ask about final costs. A reputable FX provider should happily tell its client the final cost of their transaction after charges and exchange rates are taken into account.
5. Ask how traders are paid. For example, if an FX trader is not paid commission it is likely that it will have clients’ best interests at heart.
6. Compare rates. Often the question of how to compare the exchange rates of the various brokers is asked and a simple solution to this is to visit a comparison website.
7. Don’t forget security. Ensuring that the FX company is FSA authorised is essential, and asking for testimonials and finding out how long the company has been in operation can also be useful.
8. Service is also vital. The FX company should work with customers to understand their goals and keep them up to date with events in FX markets.
9. Timing is everything. Clients should always be informed by FX companies when the exchange rate for the currency they are transacting in appears to be good, and should be offered the chance to ‘buy in’ currency for future payments.
10. Be careful! The FX supplier should be willing to talk about techniques which can help protect against wild fluctuation in exchange rates.