Most investors will be familiar with the concept of currency exposure.  And certainly,fund managers will ensure that they have appropriate ‘hedging’ in place to ensure fluctuations in exchange rates do not wipe out the gains in any profits held in foreign currency. In fact, these fluctuations are often purposely traded to make a gain, often using complex algorithms.

So what about you or I, when moving money from overseas or sending money overseas? What do we typically do? Most people I spoke to pop down to their local bank branch where their friendly staff are more than willing to arrange a foreign currency trade. In fact, when I was a Bank Manager, foreign currency was one of our most profitable products, so I encouraged all transactions! However, more prudently for our own clients, I am quick to let them know that not only will the bank charge them a sizable fee but will give them the worst rate in the market, as this increases their profit margin. With millions of transactions taking place every day across the world, it is easy to see how the profits stack up. However, our local banks’ charges pale into insignificance compared to that charged from overseas banks. If you are having to remit money from a foreign country into New Zealand, watch out! This is particularly relevant for our customers having to settle on a property purchase and are remitting funds from a house sale overseas. A lousy exchange rate can seriously affect these large amounts by thousands of dollars.

Our advice is to use a foreign currency trader. We have access to XE Money Transfer who operate in New Zealand and Australia and purchases wholesale funds. They can do large one-off transfers or regular transfers. Clients with regular pension payments from overseas, for example, benefit from their rates and service, as well as the large $1M transfers. Talk to us about getting access to XE.

Don’t get stung transferring money, but use professional traders who know how to get you the best rate. One example of this was a client moving to Australia, having sold their Auckland home. The difference between the bank rate and best rate offer by XE was over $23,000, enough for our client to buy a new motorcar!