Hedging decisions can have a material impact on cash flow, funding costs and financial performance — yet the products involved are complex and typically sold by banks with their own incentives. A hedging adviser helps you understand your true risk, evaluate alternative strategies and negotiate fair market pricing, ensuring hedging decisions are aligned with your objectives rather than product sales.

You can — but there are some important reasons why many organisations choose not to.

Pricing transparency. When dealing directly with a bank, you are essentially a price taker. Banks are not obliged to show you how they price their products, meaning you may have little visibility over the margins built into what you’re being offered. Without an independent adviser, it’s very difficult to know whether you’re getting a fair deal.

Understanding the risks. Do you fully understand the implications of each product before committing? For example, taking out a fixed rate could be highly detrimental if you later decide to sell the underlying asset — potentially leaving you with a costly breakage cost. These are the kinds of risks that aren’t always clearly explained upfront.

Have you done your analysis? Before hedging, it’s important to understand why you are hedging and what you are trying to protect. For instance, are you putting this hedge in place because it impacts your bank covenants? Without a thorough pain point analysis, there’s a risk of buying a product that doesn’t truly address your exposure — or worse, creates new problems.

At VUCA Treasury, we guide you through all of this — ensuring the solution you put in place is the right one for your specific circumstances, not just the one that was easiest to sell.

We offer both, depending on the nature and scope of the work involved. Some engagements are better suited to a fixed fee arrangement, which gives you cost certainty from the outset. Others are charged on an hourly basis, particularly where the scope of work is less defined at the start.

We will always agree the fee structure with you upfront as part of the Letter of Engagement, so there are never any surprises.