Many of the clients that accountants, solicitors and wealth managers act for carry foreign currency exposure, yet currency usually sits outside the adviser's own remit. This guide explains, for professional advisers, where that exposure shows up across a client's affairs, what it helps to understand so you can flag it and refer well, and how the regulation and protection behind a currency transfer works. The aim is to help you protect your client's outcome and your own relationship with them, not to turn you into a currency specialist. Medlock & Thames is a currency broker, so this is general information rather than advice, and nothing here is a recommendation on what any particular client should do.
Why does currency matter to professional advisers?
You are usually the first person a client turns to when money is involved, and on any matter that crosses a border the exchange rate is often the largest variable nobody is watching. The pound regularly moves by several per cent over a few months, and the Bank of England publishes the daily spot rates that show how often it shifts on interest rate decisions, inflation data and political news. On a six figure transfer, a move of that size can cost more than the entire professional fee for the work. Spotting the exposure early and pointing the client to someone who can manage it protects the client's outcome and reflects well on you, even though the currency itself is not your job to execute.
Where does currency risk show up in a client's affairs?
The common thread is timing. Wherever a client agrees an amount in one currency now but pays or receives it later, the rate can move in between and change the cost in pounds. That gap appears in different guises for each type of adviser, so it helps to know the signs in your own work.
What should an accountant look for?
For accountants, the signs are usually in the management accounts. An SME client that imports or exports will carry foreign currency invoices, with a gap between the invoice date and the payment date during which the rate moves. Clients that budget and forecast in pounds but trade in another currency face the same risk on margin. At the year end, foreign currency balances and any overseas operations have to be translated, and where a client uses a hedge, the accounting treatment matters and the documentation must be in place from the start. We cover the management side in FX hedging for finance directors and the reporting side in IFRS 9 hedge accounting explained. It is also worth preparing clients for the anti money laundering and source of funds checks that apply to larger transfers, so they do not delay a payment.
What should a solicitor look for?
For solicitors, the clearest case is cross border property, where a client agrees a price in euros or another currency, pays a deposit, and completes weeks or months later, with the rate moving throughout. The balance and fees usually have to reach the notary or the other side's client account in cleared funds on a fixed date, which makes the timing unforgiving. The same exposure runs through international estates and probate where assets are held abroad, through matrimonial matters with overseas assets, and through corporate deals where part of the consideration is in another currency. Our guide to buying property abroad sets out the country timetables, and how a forward contract works explains how a client can fix the rate for a future completion.
What should a wealth manager look for?
For wealth managers, currency tends to surface around life events and large one off movements: a client buying a holiday home abroad, receiving foreign income or a pension, relocating, or moving a significant sum across currencies as part of a wider plan. The amounts are often large enough that the rate on the day, and the spread built into it, makes a material difference to the client's position. The practical questions are when to move the money, how to handle the timing, and how the funds are protected along the way, all of which a currency desk can walk through with the client. Our personal currency service is built for exactly these situations.
How is a client's money protected in a currency transfer?
This is the part advisers most often want to be sure of before making an introduction. A currency transfer usually involves a broker, who arranges the transaction, and an FCA authorised institution, who receives, holds, safeguards and pays out the money. Safeguarding means the institution must keep customer funds separate from its own, so they are identifiable as the client's and are protected from the institution's own creditors. One point matters more than any other: the Financial Services Compensation Scheme does not cover payment services or electronic money, so the protection comes from safeguarding, not the FSCS. We explain the full chain in our regulation and compliance guide, and our own detail is set out in our regulatory information.
When should you refer a client to a currency specialist?
A simple rule covers most situations: the moment a client has a sizeable payment or receipt in another currency, especially one with a future date attached, is the moment to mention it. A property completion, a financing round, a corporate deal, a recurring run of supplier payments, or any exposure large enough to move a client's margin or budget are all worth a conversation. The single most useful thing is to refer early, before the deposit is due or the completion date is fixed, so the client has time to consider the options rather than converting a large sum under pressure on the day. Referring does not change your own role: you continue to advise the client on your own matter, and the currency desk simply handles the exchange and the transfer.
According to Medlock & Thames
In our experience, the introductions that serve a client best arrive early, while there is still time to plan, rather than on the day a payment falls due. The most common question accountants bring to us is whether a client's recurring receipts in a currency can be set against their payments in the same currency, a natural hedge question, and the answer often changes how the client manages the rest of the exposure. Advisers who raise currency as soon as a cross border figure appears, even just to flag it, tend to see the smoothest outcomes for their clients.
Frequently asked questions
Does referring a client change my regulatory responsibilities?
Making an introduction does not make the currency firm your agent, and you continue to act for your client under your own professional and regulatory obligations. You should follow your own firm's rules on introductions and conflicts. The currency transfer itself is executed by an FCA authorised institution, separately from your retainer.
Will you advise my client on what to do?
No. Medlock & Thames is a currency broker. We explain how the options work and execute transactions through FCA authorised partners, but we do not provide regulated financial advice. The decision always rests with the client, alongside the advice you give them on your own matter.
How do introductions work in practice?
We work alongside professional firms and are happy to talk through how an introduction is handled, including how the client is looked after and how we keep you informed. You can see how we work with advisers on our partnership page.
What checks will my client face?
The authorised institution must carry out anti money laundering checks, which means verifying the client's identity and, for larger sums, asking for evidence of the source of funds. Preparing the client for this early helps avoid delays on a time sensitive payment.
Is the client protected by the FSCS?
No. Payment services and electronic money are not covered by the FSCS. The client's money is protected by safeguarding, which keeps it separate from the institution's own funds. This is an important point to understand before making an introduction.
Related articles
This guide is the hub of our Intermediary Intelligence series. For your discipline, read the accountant's guide to FX risk for SME clients, what solicitors need to know about FX in cross border property, and how to brief a currency broker for wealth managers. For quick answers, see the FX regulation FAQ for advisers and our regulation and compliance guide.
