A BRAVE NEW WORLDThis article was also printed in the SME Australia Magazine.
For over two decades, share investors have enjoyed access to discount brokerage with their stock portfolios. It has also extended into derivative, CFD and even currency trading. So why don’t Australian businesses enjoy discount brokerage for their overseas payments?
Let us start from the beginning…
WHAT IS DISCOUNT BROKERAGE?
Discount brokerage, as opposed to ‘full-service’ brokerage, enjoys a discounted rate or cost, far less services and resources for the client to use, and usually involves self-execution of trades via an online platform.
In stocks and shares, discount brokerage can be the better option for those who know enough to make their own decisions, can enter their own trades and wish to save a whole lot of cash along the way.
Discount brokerage rates vary from as little as 0.03% and up to 0.25%. Full-service rates are often closer to the 1% mark, making them far less attractive alternatives in this age of information and globalisation.
The rates are usually determined by the size of the trade or cumulative trades.
WHAT ABOUT THE IMPORTER / EXPORTER?
Up until now, most Australian businesses have been paying the full-service rates even though their volumes are quite high.
In addition they are paying ‘full-service’ rates, but receiving zero service and resources as well. This means they are paying top dollar and getting very little in return.
And furthermore the ‘full-service’ rate has been fluctuating wildly because it’s most often a hidden cost, and is rarely disclosed to the client.
Here’s an example of an importer that pays $105K in Aussie Dollars to China for a shipment, getting a rate of 103.40 while the interbank rate is 104.28. The hidden cost is the difference between the two.
You can see that there’s a considerable hidden cost here, even on an average sized payment. And keep in mind that 0.85% can be quite conservative. In many cases you may be paying more, plus other fees along the way.
WHAT CAN I DO?
It’s easy… Simply contact ADDISON CAPITAL for a complimentary cost assessment, and find out what a fair rate is based on your business’ overseas activity and requirements.
Then we simply illustrate this in black and white so there is no hidden cost. We also cut out telegraphic transfer (TT) fees on the spot and get you started on the road to savings.
HOW DO I BENEFIT FROM DISCOUNTED RATES?
The benefits of lower costs are endless…
~ Bigger marketing budgets
~ Boost your imports and exports
~ Accelerated business growth
~ Better transparency and peace of mind
- Take the Cost Calculator : phone or online
- Calculate a ‘fair’ rate and your annual savings
- We offer this in black and white
- Start paying discount rates and saving thousands today!