Friday, 27 November 2015

Literally can't give it away!



Giving money away is harder than you think. 

I recently wrote to around 50 Finance Directors, mostly in what are quite large firms, offering them some free money. I was very open about why I was doing it, so that any suspicion about it being a trick of some kind could be set aside. (a transcript of my email to them is below)

These individuals have enormous responsibility to manage the finances of some pretty big firms, so more than anyone should be smart with money. Yet not one of them took me up on my offer.

Now I am sure, if I popped down to my local shopping centre and tried the same thing, all my envelopes of money would be gone in minutes.

So, why did my experiment get this result ? (which, by the way, did not actually surprise me at all)

You see, in my many years of working with Finance Professionals what I experienced is that almost all of them believe they know everything they need to know about finance matters already. This leads to a very close minded approach and a suspicion of anyone who suggests there may be a better way of doing things for their firm. Now of course if you believe someone is trying to sell you something on the back of such suggestions, that is going to make you wary. 

I wasn't trying to sell anything at all and was very clear about that.

This should be worrying for CEO's and shareholders of companies everywhere. Finance Heads should be tuning in to any opportunity to improve their firms profitability. I know that if I had an FD refusing an envelope of free money, I would be giving them a very different envelope. 

An envelope with their marching orders inside



Dear XXXXXXXXXXX

Would you be interested in having some Free Money? 

That's right, would you like an envelope with some bank notes in? 

Why am I doing this? There are three reasons 

  1. Having travelled all over the world for the last 20 years, I have always been one of those people that hangs on to my unspent foreign notes to use on my next visit there. For the moment though I have stopped globe trotting so I thought I would give it all away. 

  1. I want to conduct an experiment. You see, everyone these days is so weary of the endless tricks used by companies selling their wares, that I expect very few people to say 'Yes please, I'll have some free money'.  No one believes that anything is ever really free. 

  1. The last reason is to raise awareness. Most companies are wasting money in the way that they handle their foreign exchange. So I thought I would too, by just giving it away. 

If you want to receive an envelope with free money inside, all you have to do is send me an email with your details, and agree to a have a 5-10 minute chat with me on the phone about how betterFX (my business - www.betterfx.co.uk) can save your firm much more than the money you will get in your envelope. 

I have divided up my bank notes into 10 envelopes, which are all sealed and identical, so I genuinely don’t know now what is in each one.    

First come first served. So, as they say in all those corny Black Friday promotions, when it's gone, it's gone!  




Wednesday, 25 November 2015

Bromance, Showmance...what's next

Sitting at my desk with the radio on, 'Bro-mance' and 'Show-mance' both got mentioned....

Before it gets out of hand, I claim all of these as mine...

Sno-mance -   Ski holiday fling
Slo-mance -    Going out with someone for ages without it going anywhere (or relations with a sloth)
Gro-mance -   Couple who met at a fertilizer factory/allottment
Woe-mace -   Tragic relationship / one with 'Wossy' / with a horse that won't stop
Blo-mance -   All kinds of possibilities, polite and otherwise
Sloe-mance -  In love with posh berry infused gin
Doe-mance - Lady deer loving
Foe-mance  - Got carried away with the idea of 'keep your friends close, but your enemies closer'
Cro-mance -  Passion with Russell..or a common bird
Glo-mance -  Love between radioactive folk
Hoe-mance - 2nd allottment option / garden tools enthusiasts
Bow-mance - Ardour between archers or string musicians
No-mance   - Put down to anyone who fails in attempting romance. Separation or divorce
Low-mance  - Affection between not so tall people or with anyone from the Netherlands

running out of ideas now....

XO - mance (Fine cognac infused love)
OhNo!-mance - waking up beside someone you only just met the night before....and now regret

That's enough for now....pls think of some more!

Wednesday, 18 November 2015

Finance Directors and Ostriches - why they both stick their heads in the sand


The FD and the Ostrich, by betterFX


One of the best known myths is the one about ostriches 
sticking their heads in the sand when frightened; it is not 
true - they run away very fast (at up to 40mph). The myth 
comes perhaps from the need that ostriches have, to root
around in the sand for small stones which they swallow to 
help their digestion.

Answering the question, "Why do FD's, CFO's and other finance managers (let's just use the collective term FD's for now) stick their big brained heads in the sand" where Foreign Exchange is concerned, takes a little longer.

In my two decades in the FX business, one of the hardest things to do is to persuade FD's that they might even have a problem, even though 80-90% do, but just don't realise it.

I have a number of theories about why this is, based on real experiences meeting with hundreds of FDs.

1. Too busy. Finance departments are rarely staffed up to the level where management can examine every nook and cranny of the company's financial activities. Being reactive, fire fighting and meeting reporting deadlines all come first.

2. FD's are generalists. By definition most FDs are generalists needing to have a very broad knowledge of a wide range of financial disciplines. This is particular true in small and medium size businesses (SME's) who would not have the luxury of specialist finance roles in tax, treasury, accounting, corporate finance etc.

3. Closed mindedness. I'm not sure if that is an accepted term, but what I mean here is not being open minded. The more senior a finance manager is, the more they believe they are all knowing. This is probably reinforced by being the finance expert in their company, and to whom all colleagues and senior managers look to for financial wisdom. If someone comes along and essentially says they may be missing something, the shutters come down.

4. The prey taking advice from its predator. Many FD's take their advice from their banks, or non-bank FX providers. The goal of these providers is to make as much money for THEIR shareholders, which means finding as much revenue from the FX flows of a company as possible; and that does not normally mean offering the lowest possible costs in terms of FX rates. In fact, in most cases it will mean the exact opposite.

So what do you think happens when the FDs of companies are too busy to look into an area of cost, that they are not a a specialist in, but which they still believe they know enough about to be able ignore, and who put their trust in the firms that want to exploit them??

Answer;  Lots and lots of banks and other FX providers making lots and lots of money, whilst lots and lots of companies LOSE lots and lots of money, without realising it.

The real question here is who is most at fault? Is it the finance manager community for allowing themselves to be exploited in this way, or is it the banks and non-bank FX providers who are at fault for exploiting them?

Or is it neither? Is this just how the free market world works, where sellers extract the highest price a  buyer is willing to pay, and exploiting buyer weakness is a fair game?

One thing for sure is true, if you do stick your head in the sand, don't be surprised if you get bitten in the backside!!

If you are a finance manager and want to tackle this problem in your company just visit www.betterfx.co.uk, and send in a contact form. betterFX is NOT an FX provider, but finds companies the best FX deals on the market, personally negotiated for you.

Some of the biggest house hold names in the world have followed this advice and saved huge sums - your company could too.