The number of offshore expert currency brokers providing their trading services to multinational corporations and individual private individuals has mushroomed over the past couple of years. There are many reasons for this, but perhaps one is the enormous growth in the amount of foreign investments, particularly property, by UK citizens. Also, a lot of individuals are rethinking the length and breadth of their investing horizons due to the financial crisis. And finally, people have begun considering forex trading strategies as an alternative investment vehicle.
Many currency brokers have chosen to take up these new markets as a stepping stone to wider and faster wealth accumulation. The most popular is Sterling Trader. This company caters to global investors and professionals, providing financial services for corporate and private clients worldwide. They offer better exchange rates than other comparable firms for their European and US counterparts, and competitive fees. They have a “terrific” pricing structure, one that allows clients to trade in the forex markets from anywhere in the world. This has given them a firm foothold in the European and US markets, and they hope to expand their reach further into Asia.
Other currency brokers include Lombard, National lenders, Barington Financial Services Limited, and CIBC FX. These firms specialize in providing specialized and select trading services for their clients. Some focus on the UK market only. Barington, for example, offers clients two types of accounts – a commercial account which offer higher margins, and a government account. They also offer better spreads and other costs and fees to clients, as well as lower spreads and fees on other foreign markets.
National lenders specialize in providing direct foreign investment services. Their major clients are corporate borrowers and international trade. They offer more competitive rates than other currency brokers to their corporate customers, and they provide a number of trading options. CIBC FX offers direct foreign investment services through direct accounts in Switzerland and Hong Kong. They also offer direct foreign investment services through accounts in Singapore, Tokyo, Geneva, London, and New York.
Foreign currency brokers and agents had become quite popular in the last decade or so. The forex markets are the largest in the world. Roughly $2 trillion exchanges hands daily between the US, the UK, Germany, and China. Most of the foreign money exchanged hands goes through the currency exchanges in Europe, especially in London. Many financial services companies have established branches in London, and many foreigners work there.
There are a lot of currency brokers, banks, financial institutions, and brokers who have opened their doors in New York City. These are mainly the ones that deal in stock and futures trading, and the ones who do interbank transfers. These firms are also the ones that do the majority of the transactions for the banks. They exchange the currencies for the banks, then the banks pass the payments on to the customer. Most of the customers use the banks, since they have a lot of experience and the necessary connections in the banking sector.
One of the most common features that you will find from the top currency brokers, banks, financial institutions, and international transfers is the high commissions. This is because they receive large fees when they make interbank transfers, forward certain amounts of money, or execute a trade on someone else’s account. Because the spread is not as large, and the transaction size is not as important, the broker or institution can offer very high rates for these services. Customers benefit because the high commissions lead to more sales and more income for the broker or institution. This can be good for the customer, but it means that the customer will not get the full value for his money.
The banks will sometimes use the currency brokers, banks, financial institutions, and international transfers as a way to reduce their costs and increase their profits. Since they make money on the trades, they will often pass some of the savings on to their clients. The banks need to pass some of the costs onto the clients, so that they can remain profitable. Even though this may seem like a good idea, the client may not receive the full value for the money that he is paying the broker or bank for the foreign currency transactions. The banks need to charge some sort of fee to cover the cost of the transactions, and they need to make some type of profit for doing so.