Foreign Exchange Broker - are they ripping me off?

Harrypods

I need to move some money into Australian Dollars - a fair bit, the proceeds of a house, because we're moving to Australia next year - and my IFA recommended a foreign exchange broker that they use.

The GBPAUD was quite strong until recently, at 1.85, so I asked them to exchange some GBP into AUD. They didn't reply to my email for 2 days, by which time some more Brexit news had taken its toll, and the rate had dropped to 1.75. When I confronted the broker about this, he said he was on holiday, and whoever was supposed to check his email, hadn't.

So - we set a series of market orders in case the GBPAUD bounced a bit - which it didn't. Then I asked to set a rate of 1.75, so if it bounced up to that level, it would buy the AUD. Again, I didn't get any notification, so I emailed him again. He replied "Oh yes, the trade happened overnight", and soon after I received a confirmation from them for a buy - at exactly the rate we had agreed ,1.7500.

However - I checked the overnight interbank rates, and the rate had always been ABOVE this level - it never crossed a threshold that would have triggered the buy. I asked him about this, and he said that the rate included their commission, so it had been waiting until touching that level before triggering. However - again, the interbank rates doesn't look like it reached a peak overnight that it hadn't already hit the day before, which should have triggered at whichever rate they had set as a trigger that included their commission.

So - the question is... are they completely useless, and are now trying to claim the several thousand pounds' commission for the invaluable service they they provided me? If so, the morals of this infuriate me, as I'm paying them several thousand pounds to do something that I could have done with a low-cost DIY platform, because they're supposed to set the limit order.

The question of whether I can claim recourse from them is probably much harder, but I just wanted to understand if it's likely I can get to the bottom of what happened so that I can at least claim a discount on their service feeds, if not reverse the trade.

I know this isn't quite savings or investments, but can't see another suitable channel.a

Thanks!

D

Paul_DNAP

You agreed a target rate of 1.75 and they did the deal at a rate of 1.75000, I can't see where the "rip-off" occurred?

Harrypods

Thanks - yes, that's what they told me as well.

This is the thing about FX trading (or many other kinds)... I ask for 1.75, and then they might wait for the rate to go up to 1.755 or 1.760 before they make the trade, so they can take 0.5%, say, off the top as commission, and fees.

Do I lose? Well, there's more potential to lose an opportunity. They made a few thousand pounds, so that's money they have which I don't. To get that, they may have held off the trade longer than I would have liked, and if the rate peaked at that point and then went down, the trade may not happen at all and I miss the requested rate as a result. But it's all a question of probability.

But yes - as someone who shops middle or bottom shelf, drives efficiently, and works hard for commission, the idea that I, or someone else, can make the value of a years' worth of those savings by timing a trade a few seconds later is fairly frustrating, as it implies I could use an automated low-cost service and keep those thousands for myself.

Paul_DNAP

When setting the target rate you should have been more explicit in saying "I want it at 1.755 so I get 1.750 and you get the 0.005" but you didn't, and you should have checked just where their commission is charged before committing to using them as a broker.
And as for the timing, yep, that's what happens on the trading and exchange markets, a few seconds or hours or weeks or years either side and you would have got a different deal. But you did the trade there and then and you got the deal you got.