Sending 200k to Spain
Discussion
I used GC Partners over the last few months to pay for a property in Portugal / new car / new motorbike / add money to my bank account totalling a lot of money all without issue & paid either same day or following day depending on the time I sent them the funds.
Worth a call to see what rate they can offer you, bare in mind it takes a few days to open the account as money laundering compliance has to be done via passports / due diligence on where the funds have come from etc etc
Worth a call to see what rate they can offer you, bare in mind it takes a few days to open the account as money laundering compliance has to be done via passports / due diligence on where the funds have come from etc etc
Several currency transfer places, Smart Money and IMS FX to name but two, I have used both and they both offer near enough bank spot rate. My last deal was to buy euro's as cash from IMX FX, £2k at 1.55e. On the day the bank rate was 1.57e.
same deal via Santander would have cost me £25 and a similar exchange rate.
same deal via Santander would have cost me £25 and a similar exchange rate.
Physical FX is an unregulated market so what you're paying for with a bank is protection in transit. As you've left it so late to arrange you probably haven't time to send the funds in tranches through one of the cheaper brokers.
What you need to also look out for with the physical brokers is their deviation from the spot market. The industry works on the principle that consumers don't really understand the market. Ie, as a broker in physical FX I wouldn't be governed by any best execution rules and as you would be telling me the direction that you're trading in I can quote you what looks a really tight spread but in fact gouge your eyes out by skewing that spread in the direction of the trade. I could quote you a 50 pip spread but be offering you a buying price that's 200 pips away from the market.
Best course of action is to open a webpage showing someone like IG's two way spot price so that you can see the mid price of the real market and then when a broker quotes you their two way price you can see if it has the correct mid or if it's been moved against you. Physical spread for your amount out to not be much more than 25 pips per side but as a one off transaction expect closer to 50.
Also, there is no commission for physical FX, the spread is the commission.
And if using a physical fx broker then at least look at their accounts for the last few years to check that they are suitable for risking your funds with.
What you need to also look out for with the physical brokers is their deviation from the spot market. The industry works on the principle that consumers don't really understand the market. Ie, as a broker in physical FX I wouldn't be governed by any best execution rules and as you would be telling me the direction that you're trading in I can quote you what looks a really tight spread but in fact gouge your eyes out by skewing that spread in the direction of the trade. I could quote you a 50 pip spread but be offering you a buying price that's 200 pips away from the market.
Best course of action is to open a webpage showing someone like IG's two way spot price so that you can see the mid price of the real market and then when a broker quotes you their two way price you can see if it has the correct mid or if it's been moved against you. Physical spread for your amount out to not be much more than 25 pips per side but as a one off transaction expect closer to 50.
Also, there is no commission for physical FX, the spread is the commission.
And if using a physical fx broker then at least look at their accounts for the last few years to check that they are suitable for risking your funds with.
Michael_B said:
ferret50 said:
My last deal was to buy euro's as cash from IMX FX, £2k at 1.55e. On the day the bank rate was 1.57e.
Unless I’m misunderstanding, the last time sterling was over €1,50 was more than 20 years ago.Missed a number out...should have been 1.155e/1.157e
DonkeyApple said:
Physical FX is an unregulated market so what you're paying for with a bank is protection in transit. As you've left it so late to arrange you probably haven't time to send the funds in tranches through one of the cheaper brokers.
What you need to also look out for with the physical brokers is their deviation from the spot market. The industry works on the principle that consumers don't really understand the market. Ie, as a broker in physical FX I wouldn't be governed by any best execution rules and as you would be telling me the direction that you're trading in I can quote you what looks a really tight spread but in fact gouge your eyes out by skewing that spread in the direction of the trade. I could quote you a 50 pip spread but be offering you a buying price that's 200 pips away from the market.
Best course of action is to open a webpage showing someone like IG's two way spot price so that you can see the mid price of the real market and then when a broker quotes you their two way price you can see if it has the correct mid or if it's been moved against you. Physical spread for your amount out to not be much more than 25 pips per side but as a one off transaction expect closer to 50.
Also, there is no commission for physical FX, the spread is the commission.
And if using a physical fx broker then at least look at their accounts for the last few years to check that they are suitable for risking your funds with.
I am planning to emigrate to Spain next year and buy a property over 500k. Can you explain the above in a manner that a simpleton like me can understand please?What you need to also look out for with the physical brokers is their deviation from the spot market. The industry works on the principle that consumers don't really understand the market. Ie, as a broker in physical FX I wouldn't be governed by any best execution rules and as you would be telling me the direction that you're trading in I can quote you what looks a really tight spread but in fact gouge your eyes out by skewing that spread in the direction of the trade. I could quote you a 50 pip spread but be offering you a buying price that's 200 pips away from the market.
Best course of action is to open a webpage showing someone like IG's two way spot price so that you can see the mid price of the real market and then when a broker quotes you their two way price you can see if it has the correct mid or if it's been moved against you. Physical spread for your amount out to not be much more than 25 pips per side but as a one off transaction expect closer to 50.
Also, there is no commission for physical FX, the spread is the commission.
And if using a physical fx broker then at least look at their accounts for the last few years to check that they are suitable for risking your funds with.
crusty said:
I am planning to emigrate to Spain next year and buy a property over 500k. Can you explain the above in a manner that a simpleton like me can understand please?
Happy to bit which bits?In short, physical FX is one of the last of the traditional spanker's markets so it's wide open to ripping punters a new one.
People generally have experience of buying and crawling shares which trade on a central exchange such as the London Stock Exchange so are used to being quoted a bid and offer price etc. However, physical FX doesn't work like that but people tend to assume it does which means an opening appears to misprice. Usually regulation makes that illegal to do but physical fx like physical gold isn't regulated. Half the time the firms selling the service aren't even the broker so if you look down their webpage you'll find a completely different firm is actually your contractual partner. And that firm is rarely regulated and if it is that regulation won't be covering the physical fx aspect of the business.
If you ever watched The Young One's then a regulated stock broker is Footlights College and a physical FX broker is Scumbag College.
So what that means is that there are no laws or regulations that govern fair play, the gloves are off. There is also no protection for your money. While it is in transit between legitimate, licensed bank accounts it is at risk.
If exchanging more than holiday tokens you just need to be a bit savvy. First you need to deal in tranches, letting each trench settle before conducting the next. The size of that tranche is always defined by the amount of money you could personally lose and not see any change in quality of life. By breaking it down into tranches you also get to deceive the broker, which is important. If you reveal to the broker that you are simply transfer if a single sum in a particular direction then you are inviting a reaming. The geezer isn't going to see you again and you've told him the direction of the trade. By breaking it down into tranches and not revealing it is for a house purchase but instead you'll be flowing funds backwards and forwards you have disarmed the enemy somewhat. You have now become a repeat customer trading in both directions so they have to be careful and quote proper pricing in case you're selling not buying etc.
The next thing you must do is know the mid market price. Physical FX isn't traded on a centralised exchange so technically that true mid doesn't exist but prime brokers deliver their individual pricing to services that amalgamate these to creat a mid so you can get a true enough price within a pip or two. By far the easiest way to do this is via IG's retail spot quote:
https://www.ig.com/uk/forex/markets-forex/gbp-eur
What you'll also notice is that GPBEUR is quoted to 5 places. Another trick a broker can pull is to only quote to 4, some only to 3. At just three places the quote can look really tight at just one or two points but obviously it's actually hugely wide at 100-200 pips.
When asking the broker for their quote you must ask for the two way quote and never reveal your direction of trade. Once you have the bid and offer from the broker put them into a pre prepared excel sheet to give you the mid price and the number of pips either side. You'll have previously entered IG's spot price to get the best idea of true market mid. What you want to see is two things, firstly that the mid from the physical broker is inline with the true market and not conveniently skewed against you and then you want to see the spread you're being changed. Multiple tranches of €50k shouldn't really be costing more than 50 pips.
The other thing you obviously need to do in advance is to set up the receiving bank account for the euros. That can take time because lots of domestic banks have charges for non GBP accounts and if you use a local bank to the target property they can struggle to open an account for you until you have enough local paperwork. Historically, I've always used Citibank and the sender and receiver but others will have a good service. My priority is that I need to be able to phone the bank if needs be as opposed to dialling a number to receive an hour of platitudes delivered in a comedy accent. But if you're transferring in tranches and in advance then that arguably wouldn't be an issue.
Sometimes it is just easier to do it all with one proper bank. They might charge more but you won't know how much until you ask and it might be negligible. The key is to not be speaking to their retail/tourist desk bit be dealing with commercial numbers. The retail spreads will always be big because it's rubbish, small business that costs a bank a lot of money to processs, whereas the likes of Wise do it all electronically with the absolute minimum of KYC so offer a much slicker, cheaper and easier solution for all the sub £10k stuff.
DonkeyApple said:
Sometimes it is just easier to do it all with one proper bank. They might charge more but you won't know how much until you ask and it might be negligible. The key is to not be speaking to their retail/tourist desk bit be dealing with commercial numbers. The retail spreads will always be big because it's rubbish, small business that costs a bank a lot of money to processs, whereas the likes of Wise do it all electronically with the absolute minimum of KYC so offer a much slicker, cheaper and easier solution for all the sub £10k stuff.
They might also charge less. I sent some money to Spain earlier in the year and the rate offered by my bank was better than the online broker quotes. On the bit in bold, you typically need to call them and ask them to get a rate from the fx desk and be ready to commit to it if you think it’s attractive as it won’t usually be held for long. DonkeyApple said:
crusty said:
I am planning to emigrate to Spain next year and buy a property over 500k. Can you explain the above in a manner that a simpleton like me can understand please?
Happy to bit which bits?In short, physical FX is one of the last of the traditional spanker's markets so it's wide open to ripping punters a new one.
People generally have experience of buying and crawling shares which trade on a central exchange such as the London Stock Exchange so are used to being quoted a bid and offer price etc. However, physical FX doesn't work like that but people tend to assume it does which means an opening appears to misprice. Usually regulation makes that illegal to do but physical fx like physical gold isn't regulated. Half the time the firms selling the service aren't even the broker so if you look down their webpage you'll find a completely different firm is actually your contractual partner. And that firm is rarely regulated and if it is that regulation won't be covering the physical fx aspect of the business.
If you ever watched The Young One's then a regulated stock broker is Footlights College and a physical FX broker is Scumbag College.
So what that means is that there are no laws or regulations that govern fair play, the gloves are off. There is also no protection for your money. While it is in transit between legitimate, licensed bank accounts it is at risk.
If exchanging more than holiday tokens you just need to be a bit savvy. First you need to deal in tranches, letting each trench settle before conducting the next. The size of that tranche is always defined by the amount of money you could personally lose and not see any change in quality of life. By breaking it down into tranches you also get to deceive the broker, which is important. If you reveal to the broker that you are simply transfer if a single sum in a particular direction then you are inviting a reaming. The geezer isn't going to see you again and you've told him the direction of the trade. By breaking it down into tranches and not revealing it is for a house purchase but instead you'll be flowing funds backwards and forwards you have disarmed the enemy somewhat. You have now become a repeat customer trading in both directions so they have to be careful and quote proper pricing in case you're selling not buying etc.
The next thing you must do is know the mid market price. Physical FX isn't traded on a centralised exchange so technically that true mid doesn't exist but prime brokers deliver their individual pricing to services that amalgamate these to creat a mid so you can get a true enough price within a pip or two. By far the easiest way to do this is via IG's retail spot quote:
https://www.ig.com/uk/forex/markets-forex/gbp-eur
What you'll also notice is that GPBEUR is quoted to 5 places. Another trick a broker can pull is to only quote to 4, some only to 3. At just three places the quote can look really tight at just one or two points but obviously it's actually hugely wide at 100-200 pips.
When asking the broker for their quote you must ask for the two way quote and never reveal your direction of trade. Once you have the bid and offer from the broker put them into a pre prepared excel sheet to give you the mid price and the number of pips either side. You'll have previously entered IG's spot price to get the best idea of true market mid. What you want to see is two things, firstly that the mid from the physical broker is inline with the true market and not conveniently skewed against you and then you want to see the spread you're being changed. Multiple tranches of €50k shouldn't really be costing more than 50 pips.
The other thing you obviously need to do in advance is to set up the receiving bank account for the euros. That can take time because lots of domestic banks have charges for non GBP accounts and if you use a local bank to the target property they can struggle to open an account for you until you have enough local paperwork. Historically, I've always used Citibank and the sender and receiver but others will have a good service. My priority is that I need to be able to phone the bank if needs be as opposed to dialling a number to receive an hour of platitudes delivered in a comedy accent. But if you're transferring in tranches and in advance then that arguably wouldn't be an issue.
Sometimes it is just easier to do it all with one proper bank. They might charge more but you won't know how much until you ask and it might be negligible. The key is to not be speaking to their retail/tourist desk bit be dealing with commercial numbers. The retail spreads will always be big because it's rubbish, small business that costs a bank a lot of money to processs, whereas the likes of Wise do it all electronically with the absolute minimum of KYC so offer a much slicker, cheaper and easier solution for all the sub £10k stuff.
Your post is mostly complete nonsense and is unhelpful to the OP and may end up costing them a huge amount of money unnecessarily.
Edited by Berger 3rd on Sunday 22 October 12:11
LooneyTunes said:
They might also charge less. I sent some money to Spain earlier in the year and the rate offered by my bank was better than the online broker quotes. On the bit in bold, you typically need to call them and ask them to get a rate from the fx desk and be ready to commit to it if you think it’s attractive as it won’t usually be held for long.
Yup. It's part of getting everything set up well advance of actually needing to do the transaction and then doing a couple of dry runs if you aren't used to this sort of thing. It's very much about the six Ps. Berger 3rd said:
I think you’re confusing forex trading with deliverable FX. Many deliverable FX companies are both authorised and regulated by the FCA (certainly the larger ones) and hold e-money licenses so they can hold client money on account. Money with banks is only protected on deposit up to the value of £85k, there is no more protection for ‘money in transit’ than with a broker. The regulation that covers deliverable FX companies is deliberately designed to protect consumers in the way they would use a deliverable FX company, such as having to hold client funds in segregated accounts etc.
Your post is mostly complete nonsense and is unhelpful to the OP and may end up costing them a huge amount of money unnecessarily.
It's not nonsense as the regulations are different. For example, there's no Best Ex, the segregation is pooling. Bank Ts&Cs will usually cover transit. And as you point out, there is often a difference between firms as to what regulation they do have. There's no confusion between OTC and physical FX. Your post is mostly complete nonsense and is unhelpful to the OP and may end up costing them a huge amount of money unnecessarily.
Edited by Berger 3rd on Sunday 22 October 12:11
DonkeyApple said:
Berger 3rd said:
I think you’re confusing forex trading with deliverable FX. Many deliverable FX companies are both authorised and regulated by the FCA (certainly the larger ones) and hold e-money licenses so they can hold client money on account. Money with banks is only protected on deposit up to the value of £85k, there is no more protection for ‘money in transit’ than with a broker. The regulation that covers deliverable FX companies is deliberately designed to protect consumers in the way they would use a deliverable FX company, such as having to hold client funds in segregated accounts etc.
Your post is mostly complete nonsense and is unhelpful to the OP and may end up costing them a huge amount of money unnecessarily.
It's not nonsense as the regulations are different. For example, there's no Best Ex, the segregation is pooling. Bank Ts&Cs will usually cover transit. And as you point out, there is often a difference between firms as to what regulation they do have. There's no confusion between OTC and physical FX. Your post is mostly complete nonsense and is unhelpful to the OP and may end up costing them a huge amount of money unnecessarily.
Edited by Berger 3rd on Sunday 22 October 12:11
It’s called deliverable FX not physical, and deliverable FX is OTC, which shows you don’t know what you’re on about and are just chucking random terms about.
Berger 3rd said:
The regulation is only different because banks and deliverable FX brokers operate differently and the regulation is there to best protect consumers accordingly. The new consumer duty regulation from the FCA will beef this up even more.
It’s called deliverable FX not physical, and deliverable FX is OTC, which shows you don’t know what you’re on about and are just chucking random terms about.
The regulation difference has its origins from the 80s when various physical, non central exchange assets were treated separately by the SIB when it formed in 1985. It’s called deliverable FX not physical, and deliverable FX is OTC, which shows you don’t know what you’re on about and are just chucking random terms about.
As for today, the end result is a physical delivery. And as you have now pointed out a couple of times, the regulation is different and on top of that different firms run different licenses.
And it remains a market still proliferated by spankers.
DonkeyApple said:
The regulation difference has its origins from the 80s when various physical, non central exchange assets were treated separately by the SIB when it formed in 1985.
As for today, the end result is a physical delivery. And as you have now pointed out a couple of times, the regulation is different and on top of that different firms run different licenses.
And it remains a market still proliferated by spankers.
You keep taking different as meaning bad, when it isn’t, it’s different because banks and deliverable FX brokers work in different ways, so the way they are regulated differs. You hold money on deposit with a bank, hence the FSCS, you make international payments with a deliverable FX broker, hence that doesn’t apply as it isn’t relevant.As for today, the end result is a physical delivery. And as you have now pointed out a couple of times, the regulation is different and on top of that different firms run different licenses.
And it remains a market still proliferated by spankers.
Deliverable FX brokers are perfectly safe and far cheaper than using a bank, your outdated ‘advice’ could easily cost the OP circa £5k if they just end up using their bank, with zero benefit to them for it.
Edited by Berger 3rd on Sunday 22 October 15:51
ferret50 said:
Sorry!
Missed a number out...should have been 1.155e/1.157e
When I changed the £~300k proceeds of a UK house sale into Swiss francs twenty years ago (as a deposit for our Geneva property) we got around CHF 2,50. Back in 1975 it was over 5 francs to the pound.Missed a number out...should have been 1.155e/1.157e
These days you’d get barely CHF 1,09 for each Gordon Brown Peso
Berger 3rd said:
You keep taking different as meaning bad, when it isn’t, it’s different because banks and deliverable FX brokers work in different ways, so the way they are regulated differs. You hold money on deposit with a bank, hence the FSCS, you make international payments with a deliverable FX broker, hence that doesn’t apply as it isn’t relevant.
Deliverable FX brokers are perfectly safe and far cheaper than using a bank, your outdated ‘advice’ could easily cost the OP circa £5k if they just end up using their bank, with zero benefit to them for it.
Perfectly safe is a risible claim and why would anyone end up paying more when the whole post was about making sure the fair price was known in advance? Why is trenching wrong? Where is best ex? What are the risks of pooling or lack of FSCS cover? What's the relevance of looking at the balance sheet? Deliverable FX brokers are perfectly safe and far cheaper than using a bank, your outdated ‘advice’ could easily cost the OP circa £5k if they just end up using their bank, with zero benefit to them for it.
Edited by Berger 3rd on Sunday 22 October 15:51
It's one of the sections of the markets riddled with filth, as you will be fully aware of you work in it. Your eyes must have rolled when all the investigated CFD advisory brokers switched to physical FX and you also knew exactly why they did so. You'll also know the 'comm' ruse etc.
But as for calling an entire post nonsense and then proceeding to agree and confirm most points and then claim 'perfectly safe' it makes me wonder the nature of the desk you sit at?
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