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13 Dec 2022

Q&A: What FX solutions can help law firm partners who are paid in US dollars?

Private banking that reflects your unique financial situation can help you reach your goals. Here, Private Banker Emily Bernstein and Foreign Exchange Dealer Greig Tonks explain how they can support legal professionals who earn in US dollars.

 

A considerable number of partners and associates in UK-Based US law firms are receiving a proportion of their income in US dollars at a time when the Pound has been trading at historic lows.

Many may be looking to capitalise market movements and manage their currency exposure by working with a dedicated Foreign Exchange Dealer. Here’s how it could help.

Q) How do you manage my unique income profile?

Emily: At Investec we have a team of private bankers who are dedicated to working with city professionals, such as Partners at US law firms, and we understand the intricacies of their income profile, including irregular profit distributions and foreign currency exposure.

While firms may manage their foreign exchange arrangements differently, our specialists work alongside FX dealers who place orders and share market commentary. Funds can also be held in multiple currency bank accounts for convenience.

Q) What FX products do clients use and why?

Greig: Given the recent weakness in the pound, some clients have been looking to secure current exchange rates for future funds using a FX Forward Contract.

FX Forward Contracts can be used for transactions up to 24 months in advance to give certainty over the value of a conversion.

For example, one legal professional wanted to secure the current exchange rate to capitalise on the strength of the US dollar ahead of receiving his profit distribution in Q4. This has given him peace of mind ahead of purchasing a new home.

While he won’t benefit if the strength of the dollar increases further, the client felt it was an opportune time, as well as appreciating the certainty. Forwards can be unwound; however, this will typically incur a cost.

Q: How much time do I need to invest in managing FX?

Greig: Our offering aims to be efficient. After a conversation to understand your goals, we support your plans and help you implement them.  We endeavour to be  proactive after receiving your instruction and provide regular updates and calls when appropriate.

Q: How much do you charge?

Greig: At Investec our fee structure is straightforward. We charge a margin on the live market rate and this is built into the rate we offer; there are no additional charges or fees from the bank. Our margin parameters may vary for online transactions when a live rate is not available.

Q: How long does it take to open an Investec Currency Access Account?

Emily: It takes approximately 15 minutes to open an account with Investec and you can apply online.

We also provide a suite of private banking services to our clients including mortgage lending, and wealth management through Investec Wealth & Investment. A dedicated Foreign Exchange dealer is assigned to  interested clients and importantly, we pride ourselves on building personal, long-lasting relationships.

We specialise in working with clients with an annual income of at least £300,000.

Are you a UK-based legal professional being paid in US dollars? Get in touch today to find out how we can help you.


Important information

Any opinions, forecasts or estimates do not necessarily reflect the view of Investec Bank plc ("Investec"), its subsidiaries or affiliates. This commentary does not have regard to the specific investment objectives, financial circumstances or particular needs of any recipient and it should not be regarded as a substitute for the exercise of investors' own judgement. Investors should seek their own financial, tax, legal and regulatory advice regarding the appropriateness or otherwise of investing in any investment strategies and should understand that past performance is not a guide to future performance and the value of any investments may fall as well as rise. This commentary is confidential and may not be disclosed or distributed to any third party without the prior written consent of Investec.

You can only book a FX Forward which is for an underlying personal or commercial spending purpose. You cannot book a FX forward for investment or speculative purposes, for example in order to achieve a gain based on movements in exchange rates. Also, you cannot book a FX Forward on behalf of any other person. Additional terms and eligibility criteria apply for FX Forwards.