Managing your Foreign Exchange can deliver significant savings.
With increased globalisation, foreign exchange management is critical for modern business practices. So why are so many businesses doing it so poorly?
Foreign exchange offers a significant opportunity to save for most businesses. Many businesses utilise their bank to transact their Forex. With the Australian ‘four pillar’ policy the large banks represent a safe haven. That does not mean that they represent good value.
At the current time there is not one Tier 1 bank that provides transparent reporting on FX. Opaqueness creates a breeding ground for opportunism. The opportunity being maximising profits rather than savings for customers.
Most of the businesses that we talk to are not managing their FOREX. And by that we do not mean margin management or forward cover. What we mean is businesses have not seized on the opportunity to manage the pricing they receive. In the last 6 months we have delivered over $8.5 million in savings opportunities to large companies.
Transparency Creates Accountability.
Supply Clusters provides transparent reporting on Foreign Exchange through our member portal. Sign up to our Standing Offer arrangement and your data will be available 24/7. Members have access to their data including detail on every single transaction. Join today, start saving and see all the detail you need to manage your FOREX needs:
- The type of trade you made (forward, spot or other)
- The total amount of foreign currency purchased
- How much you were charged in margin
- Any other fees or charges
The key questions you need to ask your FX provider
- Do you provide transparent margins that are able to be verified either on a statement or reports? If you are not receiving transparent margins you are leaving yourself open to gouging. Dealers use opaque pricing as a way to maximise the profit on each transaction. The more volatile the market, the more they are able to use a larger margin spread and the more you pay.
- Is there a cap on margin rates that you will provide to me as a customer? Can I verify this through reporting?
- Are you, your advisors or dealers on commission?
- Are your advisors and dealers different individuals?
- Can you guarantee the same security as a Tier 1 bank provider?
If your provider is unable to answer yes to all of these questions, then you might consider a new supplier. Contact us to discuss more.
Supply Clusters Standing Offer
We have partnered with XE Money to help take the cost and lack of transparency out of foreign exchange.
Supply Clusters members receive the following benefits through XE Money:
- A capped, low margin / spread on wholesale currency rates.
- Free trade audit. A complimentary review which identifies where costs can be reduced and improvements made in risk management.
- No foreign currency transfer administration fees.
So how much should you be paying?
Even a small buyer of foreign currency should only be paying a half a percent of margin on top of the wholesale rate. If you are a large buyer of foreign currency then the rate should be much lower. Paying any more than this is leaving money and profit on the table.