When it comes to transferring money, the big question is often whether to use a licensed money changer or go to the bank. Rather than recommend one over the other, I’ll just explain what I’ve learned over the years as a financial planner who helps people in Israel with their U.S. brokerage accounts.

Two types of transactions

Money changers generally offer two types of transactions. The first is cash-on-the-spot. When you bring in cash or a check, the money changer will exchange it for cash. Since you don’t leave without money, this is low risk. The second way is to leave the money in safekeeping with the money changer, who will then wire the money over the course of the next day or week to your bank account. This is a higher risk because the money changer may delay the transfer or default on the agreement.

Only use professional, licensed investment advisors

Although money changers are experienced at handling money, they are not investment experts and you should not let them invest your money. Don’t let promises of higher returns tempt you. When it comes to investments, stick to a licensed professional investment advisor and a reputable brokerage firm.

Differences between money changers and banks
People often prefer money changers because they offer much better service than banks and generally offer better rates. Still, with banks, there is less risk.

If you do decide to go with a money changer, here are some things to note:
• Make sure the money changer is licensed.
• Make sure that they don’t commingle accounts, but keep the money segregated.
• Make sure that they keep clear records. If they are using scraps of paper as receipts, you need to wonder how professional they are.
• Make sure that they offer reasonable deals rather than promise special arrangements. For instance, be suspicious if they promise above-market interest rates on deposits (which they probably shouldn’t be doing anyway since they’re not banks).
• Make sure that they charge a fair amount for their commissions.

Naturally, there is much more to learn about transferring money safely, so please see my free webinar at www.profile-financial.com/multicurrency for much more detailed information.