The goal of regulatory bodies is to protect both investors and forex providers. The Financial Conduct Authority (FCA) and other regulators ensure that financial institutions behave fairly and ethically. In the UK, all foreign exchange businesses should be registered as Money Services Businesses with HM Revenue & Customs and licensed by the Financial Conduct Authority as authorised payment institutions.
Using a regulated forex broker can give you a sense of security and peace of mind when it comes to transferring your money. Checking your prospective broker’s registration number and doing your own due diligence research on them will ensure that you do business with a trusted and reputable company. You do not want to take any chances when it comes to your company’s finances and turnover.
Currency risk management
Exchange rate fluctuations can have a negative impact on the overall profit of companies that have employees or customers overseas or send large amounts of money abroad. A good foreign exchange provider will have the knowledge and tools to help you mitigate this risk.
Hedging with forward contracts
Hedging safeguards your business from future price changes. The objective is to establish a position that will protect your business against losses if the currency market moves against you. Businesses can accomplish this by utilising a forward contract, which locks in an exchange rate for an agreed-upon sum that can be used on a date up to 12 months in the future.
Make sure you choose a forex provider that offers full disclosure on the costs associated with these contracts and has in-depth knowledge to help you choose the one that’s best for you.
Transaction costs vary depending on the broker. Make sure you get a fair quote for all costs and avoid companies that charge high commissions. Be wary of “hidden fees”. A good forex specialist will be able to tell you exactly how much each transaction will cost before you start the transfer.
Using the right forex partner can save your business a lot of money and ensure higher profits. Since banks don’t specialise in forex, doing foreign exchange through your bank can result in unexpected fees. For instance, some banks charge for depositing money into your trading account. If you use an independent forex specialist, you can be sure that the rate you receive is fixed at the time of the transfer.
When you open an account with a forex broker, you will be asked to give sensitive financial and personal information. You may be required to give copies of your utility bills, passport, credit card and bank account details, for example. Brokers who do not incorporate enough security protections may allow your personal financial information to go missing, causing trade to be disrupted and putting you at risk for identity theft. It is impossible to stress the necessity of completing due research to ensure that the broker employs excellent security features.
Different brokers offer different security features, such as two-step verification to prevent hackers from accessing your accounts. You should choose a broker with robust security measures to ensure that your money is protected during online transactions.
A legitimate forex supplier should never ask you to send cash to their offices or into any personal accounts. Funds should be kept in separate, secure, client accounts.
ALSO READ: Currency hedging: How to manage your SME’s foreign exchange risk
Should the worst happen and your account is hacked or anything else goes wrong, you want to make sure that you can get hold of your forex provider as and when you need them. Consider a forex specialist that offers your business direct access to their helpdesk for business-critical issues. You should be able to rely on your broker to provide responsive personal customer assistance, rather than getting stuck with a chatbot or automated email responses in emergencies.
Testimonials and reviews are the best way to determine a company’s customer service. At Sable International, our forex department prides itself on exceptional customer service and we currently hold an average score of 4.87 out of five (taken from over 1 300 reviews).
If you have confidence in your forex broker, you can spend more time and attention on growing your business. A little research before committing to your chosen forex specialist can increase your company’s chances of success in a competitive market.
We’ve been helping clients transfer money for over 20 years and we’d love to help navigate you along your forex journey. Contact our forex team on [email protected] or call +44 (0) 20 7759 7554 or +27 (0) 657 2153
Sable International is a fully regulated and registered financial services provider in South Africa, the UK and Australia.
Check out the Sable International Currency Zone to get the latest live exchange rates and currency news.
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