Welcome back to the Wisdom Lifestyle Money Show. I'm your host, Scott Dillingham. Today I have Marc Racette. Did I pronounce it right?
Marc Racette:Correct.
Scott Dillingham:Yep. Perfect. Perfect. So Mark is an expert in foreign exchange, and he's going to show you through some of the tactics and tricks how he can help you to save thousands over going with a bank. But I guess before we get into that, Mark, I'm curious how you got started.
Scott Dillingham:Like how did this like come up that you just
Marc Racette:Yeah, no, it's a good question. I mean, I've actually been in this industry for just over a decade now. Funny enough, my career began internationally. Was helping Canadians expand business into Asia. So I was stationed in Shanghai for a couple of years And then I came back and I had a good understanding of, you know, global economics and figured the best place to apply that would be in the foreign exchange realm.
Marc Racette:I've been working with one company for over a decade and as of last year decided to venture out on my own and get Pulse FX up and running.
Scott Dillingham:Good for you, that's awesome. No, I'm excited to hear because like, I know like, it's so easy, it's so convenient to just have your bank do the funds or there's other services and we even discuss them, you know, at a recent event and you're like, yeah, but you know what, they're really, they're they're not giving you the best exchange. So, yes, their fees might be low, but they've baked it into the exchange. So you're not still not getting the same funds. So I just I just wanna hear from you how you do what you do and and how it works.
Scott Dillingham:And I know you've prepared a presentation for so I'd love to love to hear.
Marc Racette:Yeah. For sure. I can cover all that, during the presentation. We can talk a little bit about the landscape. At the end, even have a few kind of, live comparisons versus what I was able to pull today in terms of data from what, banks are offering.
Marc Racette:So, yeah, I can get that going if you wanna get that started now.
Scott Dillingham:Yeah. That's perfect. So what I'll do, I'll watch for hands. So everybody who's listening now, you can raise your hand if you have a question. And, Mark, I know, obviously, you'll be focused on your presentation, but I'll let you know if there's a question, and then, we'll go from there.
Marc Racette:Awesome. Okay. Let me, share my screen here, and I'll get this going. Okay. Hopefully, you can all see that.
Scott Dillingham:Yes.
Marc Racette:Perfect, so yeah like I said my name is just starting off again and Mark Brissett, with Pulse FX. So I'll be going through this presentation, if you guys have any questions once more, please feel free just to raise your hand as Scott indicated. I'll be able to stop and kind of answer, as relevant And yeah, I'll get going from there on, but the point of this conversation or this presentation once more is how to ultimately save money when you are a, let's just say, Canadian investor looking at buying property in The US and there's foreign a exchange component to that. So I'll cover the basics of the presentation. Right now we're going to dive into the general market overview, tips and tricks, things to look out for.
Marc Racette:Generally, if you are a Canadian investing in The US, it does definitely help to understand some basic economics, what ultimately might move the market, and what to keep a lookout for if you know, you're closing, let's just say, within a month, within a few months, or within a year. We'll have a quick overview of a variety of factors there. I'll then go into some of the products and services that an FX firm can provide. Some of these you might be able to get from the bank, some of them you might not, so I'll kind of give you a heads up what might be possible. Some of them are also dependent on if you are an individual investor versus investing through, let's just say, a holding company, in this case a business, So I'll pinpoint those as well too.
Marc Racette:I'll then kind of explain a little bit about the value of having an FX partner. So as Scott stated, there's a lot of options out there. Typically, you know, many people have their bank. There's a lot of online brokerages. Our firm in particular is what we would like to call a full service firm.
Marc Racette:It's not just about having an online portal, but also about having a partner that you can work with that understands your business. Very much like working with Scott, they or you the partner is able to get more of an in-depth understanding of what your needs are and help you plan for the future. I will end that presentation as well, like I said, within savings comparison just from data I pulled earlier today. You can see exactly what the differential would be between a variety of banks, credit unions, as well as through Pulse FX, then ultimately leave the floor open to more questions at the end of the presentation. So going into just a quick market overview.
Marc Racette:So once more, quite a bit to look out for whenever you are doing business or investing outside of the country, let alone internal factors. I'm sure everyone's read this morning in particular with Trudeau resigning. A lot of news, coming out over the next few months with also Trump coming into power on January 20. So a lot is happening right now that it certainly pays dividends to stay in the loop about. So I'll go over a few factors and a few key indicators that might be worth looking out for within the next few weeks, if not the few months, if you are looking to invest in The US.
Marc Racette:So as I indicated before, politics is a big one. In particular, with Donald Trump's return to presidency, we could see The US economy significantly reshaped. Once more he has a strong focus on more protectionist and domestic industry, as well as through his use or his imposition I guess of universal tariffs on imports. We could see quite a bit happen between the CAD and US dollar in particular. Ideally, his goal is to bolster domestic manufacturing in the short term, but that also risks triggering inflation, which is another topic you need to look out for.
Marc Racette:Typically, if you talk about inflation in a nutshell, when it becomes more expensive to borrow versus it becomes cheaper to borrow, this is going to impact not only the value of mortgages through the position of interest rates, but it's also going to impact the value of a currency in particular as well too. Once more, the more expensive it is to borrow, in other words, the higher interest rates are, the more that currency typically has a value and the lower interest rates are and vice versa. That typically means it's much more cheaper to borrow so the value of that currency is a little bit lower. So just quite a bit to look out for in terms of what's going to happen with changes in The US economy. Something else in particular to note is Trump also, I believe, has a strong focus on devaluing the US dollar just to once more promote domestic manufacturing.
Marc Racette:Because once more, a cheaper US dollar ultimately means more, people around the world are going to be able to buy said product that is manufactured in The US. So we could see, you know, quite a bit of news coming out in the next few months. I'll talk about some forecasts later in this presentation, but a lot of people are actually expecting this US dollar in particular to lose value come q two of this year just with, the changes that might be implemented in The US. So something to keep on top of. You know, it could impact, once more the currency markets quite a bit, let alone in the last three months, I think we've seen close to a 7% movement in the rates from CAD to US, just with all the speculation about what's gonna be happening on the political front as well as ongoing global issues.
Marc Racette:So definitely, if we see that happen once more with a return towards a stronger CAD weaker US, that's going to be dramatically better for Canadians investing in The US. So obviously other topics to look for are any changes once more or any commentary on interest rate changes. Overall oil prices for example, this is one that hasn't been a huge market mover as of late but typically the Canadian dollar has been largely tied to the value of oil. Once more, if you look at political stability around the world, generally if there's conflict happening in the world that leads to safe, heavy currencies like the US dollar gaining value. So these are things that on a macro level you should look out for that could kind of indicate where markets are going in the long run.
Marc Racette:Ultimately, though, I'll talk about this as well and at a later point, but the one of the values of having FX Partners is we can once more pull these forecasts for you and help you decipher what might be happening or what the what the major banks are in particular are predicting over the next year, for example. So if you look at this quick graph, I I just pulled this data, as of, I believe this was of November, but it's pretty much, remained the same for most major banks. As you can see, come q two, most banks are predicting the US dollar to fall. If you look at, I think the highest once more, was TD predicting this the US dollar could go up to $1.45 which was actually very close. Not to say that TD is necessarily always the best forecaster, but you do have if you take away that point in particular, there is a bit of a consensus as you can see come Q2 where most banks are expecting this US dollar to taper off.
Marc Racette:So just keeping all that in mind, definitely a lot to look out for in terms of market movers over, you know, whether you're looking at investing over a week, a year, you know, we can kind of break that down into smaller events throughout the course. But I will now talk about one of the, I guess, the thing most people are here to learn about is more of the the products and services and other ways you can save money. So as we know, the most basic exchange is called a spot transfer. So that's essentially when you go into the bank and you just say I want let's just say $100 US this is what it's going to cost in CAD and you exchange. Now there's two other products that might be beneficial for you.
Marc Racette:One of them being a limit order. So if you do have flexibility in terms of when you might be wanting to invest either in like a real estate or an event like a real estate investment project that someone else putting together for example, limit orders might be beneficial to you. A limit order is essentially saying or creating a threshold where you can secure funds when it hits a certain rate. So let's just say the rate right now is 145. If it makes sense only for you to contribute to a project when the rate hits that 143 mark, you can look at a limit order and say I want to contribute, 50,000 once this rate hits 143.
Marc Racette:And that allows you to now, have that order in the system. You can go about looking for other projects, you can time that limit order to when that investment window might expire. So if it doesn't hit, you know, you continue to move on. If it does hit, then now you're in play and you're able to now invest in said project. Another product being forward contracts.
Marc Racette:So these are limited to holding companies or businesses I should say, but a forward contract is more like a buy now pay later product. So if you for instance, let's just say you want to buy a home let's just say for half a million in The US, if you want to might not want to necessarily want to this but if you wanted to pay a large portion of that upfront, let's just say you wanted to put a larger deposit down, if you don't have enough money right away but if you like where the rates are at and if you want to base your calculations on how much your expenditures should be based off today's rate, you can get a forward contract. You can secure that deposit today's rate and then with forward contracts you have a window that you can set up. It could be anywhere up to a year in advance where you say where then you fulfill that contract. So you lock in today's rates, let's just say, at $1.45.
Marc Racette:Let's just say, in a month from now, the rates go up to one forty seven. You're protected in that sense because you've already based and secured the funds at that one forty five. Now the worst could happen too, of course, where the rates could fall back down. So I would say the idea of a forward contract is not necessarily to be speculative on the market, but just to get a better idea of what your ultimate cost is going to be by the time you close or by the time you have to put a deposit down. So this is once more a very beneficial project product for any sort of investment business that wants to, you know, protect cash flow, for example, or protect, you know, or get a better, sorry, projection of their pricing over the course of the next few months or to a year, for example.
Marc Racette:Another interesting product is that we offer is a multicurrency account. So let's just say you are already investing in a US property or anywhere else in the world for that matter. Let's just say The UK as well. If you don't already have a US dollar account or like a British pound account, The UK for example, through the use of multi currency accounts, we can act or through the use of Pulse FX, sorry, we can set up virtual accounts for the collection of funds. So if you're let's say you bought a property in The US, let's just say you're renting it out, you're making income off that property now, but you don't have an account in US dollars, we're able to create a virtual holding account that you can use to collect those funds and then whenever you would like or through automatic conversion we can have that those funds held and then converted back into CAD at a much more optimal rate.
Marc Racette:If you're currently doing all your investment in The US through a Canadian dollar account in Canada, you'll notice that any money going in and out, you're probably getting charged an arm and a leg for by the bank, especially on the incoming side of things, simply because you go through their standard auto exchange fee plus any incoming wire fees, for example. You kind of get hit with a couple couple fees in that sense. So another interesting product, I should say, if you are ever looking to collect funds, not just pay, but once more on the inbound. Something else you'll know if some of you might have encountered this already, sometimes sending funds to The US is not as easy as it seems, especially when you're sending funds to, let's just say, a trust company or to any sort of investor or crowd funded investment platform for example. There's a lot that your bank might ask in terms of documentation for getting that wire through.
Marc Racette:So even if you have the money ready to go and you've had all the wire instructions, everything you need to send that money, sometimes you'll find the bank comes back and asks a lot of questions just to try to figure out what the purpose of that investment is. So that's another area where firms such as Pulse, we can help put together a package upfront and just give you a good indication of what ultimately is going to be required by banks. Another thing to look out for is payment options. Now, depending on where you are sending funds in the world, you'll have the ability to either send funds internationally or through domestic banks if you use a brokerage firm such as Balls FX and that could save you quite a bit of money as well too. Your average Canadian bank for example will charge anywhere between $30 to $90 for a wire, so it's a bit all over the place depending on what kind of tier of account you have with the bank.
Marc Racette:Versus if you send funds typically domestically in The US via a system called ACH, in Europe a system called SEP, typically those are free wires. So you're able to save quite a bit of money on top of getting better exchange rates. You're able to typically save quite a bit of money just on fees in general. You'll find a lot of online brokerages as well too, will charge significant fees and that usually is where they might make their money even if they provide lower rates. So a thing just to look out for in general is just how much you're paying in terms of fees and looking at payment options as an example.
Marc Racette:So this is where I'm gonna talk about once more the value of having an FX partner in particular. So once more, if you're using a bank versus an online brokerage firm, depending on once more when it comes to the bank for example, depending on what tier or how big, of an account you are for them, you'll see a wide variety of rates they typically provide. I find generally any bit if you're a consumer, you're generally getting charged the same as most consumers. If you're a business, it's usually if you have been in business for less than five years, you get charged. Pretty much what consumers get charged.
Marc Racette:I find anywhere between that five to ten year mark, get typically a standard business pricing and then ten year plus. The banks provide what they call preferred rates, which is not necessarily what it sounds like. Anyone that's been in the mortgage space as well too, you'll know. It's typically not very hard to shop around the banks and get a better rate elsewhere. But, yeah, I'll go through just a quick overview.
Marc Racette:So once more, it helps to have some expertise when you are investing. I mean, if you're spending the money to invest in a property in The US, you know, a one cent movement in the rates could be dramatic. I mean, if you're moving a $100,000, you know, you're talking about a thousand dollars difference. If you're moving half a million, you're talking about a $5,000 difference. But generally, if you're a consumer, you're not saving you're not looking at a 1% fluctuation.
Marc Racette:You say you might be looking at a 1% fluctuation on top of an additional, you know, 3% that the banks might be charging for an exchange rate. So, you know, having an understanding of the markets, having a partner in place to help you save, you could be saving significant amount of money. I mean, if you, you know, look at a, you know, half a million dollar transaction, I've seen sometimes, individuals save anywhere between 15 to, let's just say, $17,000 compared to just using a standard bank. And that's not just better rates, but understanding what might be coming out, understanding if you don't have a need to, make that payment right away, what is coming on the market within the next week, within the next two weeks, within the next month, How that might impact the rates, if that might be advantageous to you, we can look at that as well too. Competitive rates, so this one I'll show you guys just at the end when do the comparison of rates I pulled today.
Marc Racette:But generally the rule of thumb is if you're a consumer, a firm like ours can typically save you about two to 3% on average. If you're a business, it's probably closer to that one to 2% savings, but generally the banks aren't necessarily hard to beat. Even other brokerage firms, online firms for that matter, they have most of them when they first started out were charging a flat fee and they still have that, sorry, a flat exchange rate, they still have that but now they've started adding additional fees associated with those payments. So you might see that reflected over time in some of these online firms. So it helps to have once more transparency when it comes to rates as well too.
Marc Racette:So just understanding that and finding a partner once more that that provides transparency, I find goes a long way. Then products and services that fit your needs. So once more forward contracts for example and limit orders most banks might not provide that if you're well certainly if you're not if you're a consumer but even if you're an early stage holding company they usually refer those sorry, reserve those products for some of their what's quote unquote preferred clientele, which is the businesses that typically have been in service, you know, five to ten years plus. So something to actually once more look for in a partner is whether or not you have those capabilities. And most banks, for instance, won't provide multi currency accounts either.
Marc Racette:That's very much a service that brokerages like Pulse would provide. And just a little bit more information on on who we are, and then I'll kinda jump into a little bit about how to save money. But oh, sorry, with the actual comparisons. But generally, depending on where you're investing, you know, we can pretty much work anywhere in the world. The idea behind us is once more that full service approach.
Marc Racette:So not just having an online portal, but having peace of mind to know that you'll have someone that real to talk to at any point in time to help guide you through that process, help you understand your needs, and to help you ultimately make that payment if you require that assistance. And essentially, where we or the impetus for why we started our company is once more transforming that experience and bringing that personalized touch back into the market. So to get into the the fun part, just an average savings comparison. Once more, this is data I'm gonna go through. I believe I have three banks on here as well as a credit union, and then at the end, just where we're at.
Marc Racette:But it's pretty much night and day the potential for savings that we can provide versus going directly to a bank as anyone at this call probably knows. Mean, more having a broker in the mix is typically your your best bet for getting a good rate. Once more, our our aim is to be a bit of a buying group so to speak, you know, being able to, you know, take your needs, shop around the banks for you, and essentially work to get you the best rate. For Pulse, for example, we use a couple of vendors and have, I think, roughly sixty sixty eight banking partners across the world. So, again, to the fun aspect of this.
Marc Racette:So for example, if you look at TDs today, rate today, and this is as you can see I pulled this as of January 6, they're offering a CAD to US rate of roughly $147.99 so that's you know, let's say 148 Going to RBC you'll see pretty much a little bit better, pretty much the same thing around $146.8 so almost around that $147 mark once more. Look at Scotiabank for example, they're as high as about 146.63 so once more getting closer to that 147 realm. You look at credit unions like Alternate as an example, they're as high as 147 as well. Once more looking into Pulse FX and this is where we can help most is just on that standard spot rate. We are closer to that 140 three-one 144 realm as of today.
Marc Racette:So as you can see on average the savings differential is usually around, I would say, that two to 3%, you know, ballpark versus what the major banks can provide. So that that's really all there is to to the presentation here and the service. I mean, we aim to once more be as simple as possible. The real value once more that we provide is once more that personalized service compared to what a bank or an online brokerage would ultimately provide. Getting understanding of your needs, whether on personal or business level, is really what goes a long way.
Marc Racette:Find a lot of the online brokerage firms are really just going the the scalability model where it's, you know, here's a rate, here's a platform, have fun. There's not a lot that goes into it past that, but you'll find through, that personalized touch that not only will you get good rates, but ultimately, our goal is to help you get a good rate at a good time as well too, as well as by also looking at other products and services that might optimize that purchase for you. And, yeah, that is the presentation.
Scott Dillingham:That's awesome. So I have a question for you, Mark. So I've got money on buying a property, and I wanna use it as my down payment in The States. How do I get my money? Like, how does that process work?
Scott Dillingham:I know the the bank method. Right? Going into the bank and they take care of it. How does it work with you?
Marc Racette:Yeah, so very straightforward with us. Depending on if you are a consumer or a business, it's a slightly different process. If you're a consumer, then it's pretty much a wire in wire out. We have, banking connections with almost every major bank in Canada, so it would be a quick almost domestic wire based off, which bank you use. If you're a business, then we can actually, connect to your bank via pre authorized debit mechanism, which is essentially allows you to, you know, forego the need for, wiring us altogether.
Marc Racette:And then when it comes to the outbound payments, we can help, initiate those wires to the beneficiaries on your behalf. We can also verify that your banking details are correct. If you're paying, for instance, a Bank of America account in The US, those are typically, a certain, those typically have certain routing codes associated with them. They certainly have, they have a certain number of digits associated with account numbers. So we can help you, you know, make sure you have all the information required to at least get that wire out as well too.
Scott Dillingham:Nice. That's awesome. That makes sense. I just didn't know. Now there's a chat question from Chris.
Scott Dillingham:He says for the limit order, do you need to have the funds with FX or just ready to transfer when the rate hits a dollar 43?
Marc Racette:We don't need to have the funds on on on hand. You just need to have them ready to go when we the limit order hits it. Typically, we have about a three day settlement window too. So let's just say the limit order hits today, you would have today plus two more days to just collect the funds needed to facilitate that order. So we wouldn't have to tie up any of your funds on our end.
Marc Racette:And then once that order hits, you have today plus two more days to settle it.
Scott Dillingham:That's awesome. No. I appreciate it. So awesome, Mark. Now I know you put the details there, but for those that are listening and not watching, how do they contact you to get transfer started for the
Marc Racette:Yeah. For sure. So I can put my detail or sorry, I can send once more my details either in the chat or to Scott. But essentially, if you just go pulsefx.com, you can reach out to us there. You'll also find our email there.
Marc Racette:Ultimately, you want to contact me directly it's, going to be my name so m a r c dot r a c e t t e pulse so p o l s e f x dot com And my direct number, which I will, just share here is gonna be (416) 848-1028. So whatever works best for you. And I also welcome if anyone wants to add me on LinkedIn as well too, They can get, send me a connection and message me there as well too.
Scott Dillingham:That's awesome. No. I appreciate it, Mark. Thanks so much for coming on. Was there any questions from anybody who's watching today?
Scott Dillingham:If there is, put them in the chat. We'll give it a minute here, Mark. And then if not, then we're all set. I know that's that's pretty cool how you guys are. It makes a big difference, like how much cheaper you are, especially when you're transferring large funds, but even small funds.
Scott Dillingham:Like I can see people using this for even vacation money. Right? They're going on on vacation. Right? Like so do you do you have a minimum?
Marc Racette:So honestly, anyone doing a couple thousand or more on the corporate level is typically where we're able to help. On a personal level, it's typically anyone doing about 10,000 or
Scott Dillingham:more. Okay.
Marc Racette:And yeah, we have a lot of clients that are doing, you know, smaller payments like I said that in that couple thousand around whether you know, they're paying for renovations, whether they're just transferring money to their account in The US to top it up because they want to, you know, avoid winter, you know, the snowboard snowboard community for that matter. Yeah. Yeah.
Scott Dillingham:That's awesome. Cool. Well, there's no other questions, so we'll let everybody go for now. But thanks so much for coming on, Mark. This was very valuable.
Scott Dillingham:I can absolutely see how I could save money, and I'm I'm I'm excited for it. So thank you.
Marc Racette:Thank you for having me once more.
Scott Dillingham:No worries. Take care.
Marc Racette:Take care.