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Currency Conversion Checklist

Over the years we at Valor have assisted numerous clients with repatriating or sending funds for various reasons. These have included inheritance distributions, property transactions, global investments, lump sum pension payments and many more.

We are one of the few private wealth firms with a retail currency license enabling us to provide personal currency services where we connect and get to know what your purposes and timings are and how they could impact the transaction. This varies to many currency services who focus only on transacting as directed and leave you to research the options and their implications.

As part of our personal currency service, we have developed some checklists that help to develop the strategy that is right for you. Some of the things we check are in the list below.

Currency checklist:

Who: Are the bank accounts in the same name of the person sending and receiving the money?

  • While this is not always required – particularly for inheritance distributions – both bank and non-bank FX providers may want to see currency transactions being sent from the same person / entity.

When is the transaction due?

  • This will impact the alternatives you have available to you.

What is the purpose of the funds being received?

  • If the funds being received have a specific purpose, it may be worth considering locking in the exchange rate prior to the funds being received or when you need them in Australia/foreign country.

Where is the exchange rate at relevant to where you want it to be.

  • If you want to convert currency at a rate different to where it is at when you are ready to convert, you do have options, but they involve a degree of risk. If you must convert currency quickly before the currency achieves your preferred rate, you can convert the currency but then simultaneously take out another FX contract that allows you to profit from the currency moving in the direction you thought it would.

Frequency – is this a one-off transaction like an inheritance or is it a regular payment like a pension payment or investment returns.

  • It is possible to enter into agreements with FX providers to exchange currencies at today’s rates. While the rate may differ due to transaction costs and forward rates, you can lock in future rates to protect future payments.

Which service provider: who can convert the currency and what are the differences and how do they relate to me.

  • Different providers are suitable for different reasons. Navigating this process isn’t straightforward and there can be good reasons to choose one over the other depending on your individual circumstances. We have many years of working in the currency market and can match the right provider for your needs.

Understanding these points helps us to put together a strategy that works for you.

Each situation is different, and it is beneficial to have a personal service that provides what is need and gives peace of mind. Whether it be profiting from currency conversion or having certainty around values for subsequent property purchases, we can assist.

Feel free to contact us for a chat about your upcoming currency needs.

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