Do’s and Don’ts of the proof of funds industry

do DO

1.0 Always tell the truth. There is no point telling the people that are trying to help you half truths, mistruths or ‘white lies’. The finance industry is not stupid. Even if you find a fool to talk to sooner or later their supervisor will tell them to check or get more information or ask for an affidavit and you WILL get caught out. It is almost impossible to rebuild credibility. You are better off telling the full ugly truth up front and asking for help.

2.0 Do, remember that at the end of the day this is a professional service industry. Remember, Professionals expect to compensated for their time and the time value of their money. Most people in this industry are lawyers or accountants by trade or are closely supervised by lawyers and accountants. This is a specialist area of finance. To find a lawyer accountant or banker qualified to advise you in this area would cost upwards of $5,000USD per hour.  So submit all paper work in full and complete as soon as possible. The fools have already been easily separated from his money. This only leaves you with the sharpest analytical minds to deal with. The ‘wise old men’ that have accumulated hundreds of millions of dollars only lend to the best quality candidates.

3.0 Do, have your correct paperwork ready. Since the 9/11 terrorist attacks in New York City, a global standard has emerged for correct procedure these are known as; Know Your Customer (KYC), Counter-Terrorist Financing (CTF) and Anti- Money Laundering (AML).  ALL global banks will require almost the same high standard of identity documentation. The basic standard is notarised; passport, or two other government issued, photo identity documents (i.e. car and boat licence) recent bank statement verifying address and balance of funds to pay fees for the service you are requesting.

4.0 Follow the procedure. The procedures are derived from the global legislative standard in banking / securities / consumer protection / compliance etc. No international bank is going to violate any of that for your one or two deals. It is just not realistic.  These are large corporations with vast sums and their banking licences at stake. They simply will not accept proposals that do not follow the laws. They also will not accept variations to their procedures.

5.0 Do have your money ready. It may seem like a crass thing to say. However issuers are very busy, and there are a lot of  ‘tyre kickers’  it can massively increase your credibility and actually put you in a better position if you can quickly establish your identity, your ability to pay for the services you are requesting and exactly what services you are requesting.  Issuers will be keen to work with you and on subsequent deals, you will find that you get offered better service and price. If you can build a strong relationship with an issuer you will make more money over more deals over more years than the person who has incomplete paperwork, argues about price and has trouble sourcing proof of funds instruments.

do DON’T

1.0 Don’t try to ‘negotiate’ on the process. The process is there to establish your identity, and credentials as quickly as possible.

2.0 Don’t try to bluff your way through and sound like a big shot. Generally the industry is happy to help first timers, the important thing is that our expectation of you matches your ability.

If you say you have ‘done this many times before’ and we say ‘send ID, disclaimer and application’ we expect a certain standard of documentation.

If you don’t know; say you don’t know. If you don’t know and then try to bluff through and then change your requirements etc it will cost more, take longer, and may mean that issuers will not work with you in the future. READ THE OTHER INFORMATION ON THE WEB SITE LIKE THE BASIC DEAL FLOW. It will point out the basics to you.

3.0 Don’t skimp on fees. Industry fees are fairly standard.  Sometimes you pay a little extra for fast service.  If you really have a $10, $20 or $500M deal on the table, it makes no sense to stall for the sake of a few tens of thousands in fees. The time value of the deal, having good repoire with the issuer on the next deal and GETTING THE DEAL DONE. Is more important.

Answer this question; ‘What have you done, for free for the issuer in the last 90 days’? Nothing, there is nothing you can do for the issuer.  The best way to influence the issuer is; be easy to get along with, have good quality (Notarised were necessary) clean, neat, legible, high resolution and complete paperwork. The issuer is a usually a multi national bank with multiple levels of regulation and legislation to comply with.

Let’s say you have a 500M MT760 deal and the MT760 has been issued – just as you asked, you have paid but negotiated very hard on price.

At 4pm on a Friday you realise to your horror that you have mistakenly requested the wrong wording for your deal. You now urgently require an MT792 to cancel the MT760 – at this point you will value the relationship you have built with the issuer. What it comes down to is; a human in a dealing room somewhere will look at a screen and think
‘That person was unpleasant to deal with it is unfortunate for them that it did not work out’
‘That person was pleasant to deal with did not quibble on fees and the type of customer we want. Let’s do what we can to fix it for them’.

You can control that outcome, in advance by following the system, being honest, paying when due and having complete paperwork.