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How to Choose a UK Stock Broker

Sam Allcock
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0
How to Choose a UK Stock Broker

This work has considered the important factors to consider while choosing a stock broker in the UK today.

Introduction 

Stock brokers perform different roles for their clients – ranging from order executions to trading on behalf of their clients. Some are known for providing financial advice to guide their traders in making decisions, while the rest provide support and rich educational material to make trading easy for their clients. It is therefore very necessary for any prospective stock trader in the UK to understand what services he desires, to help him in deciding which of the is the best UK stock broker for him.

Whichever type of broker one wants, it is equally important to ensure that such broker complies with the regulatory demands and fulfills the client’s expectations. This work is therefore an invaluable guide for traders to understand the important factors to consider while choosing a stock broker in the UK today. 

Meaning of UK Stock Broker

A UK Stock Broker is a financial service provider that enables UK residents to buy and sell various stocks listed on the London Stock Exchange (LSE). Stock brokers in the UK provide a wide range of services for their registered traders ranging from trading on their behalf, providing financial advice, executing pending orders, etc. Without stock brokers, it will be difficult for individuals to trade stocks from the comfort of their homes in the UK today. 

Types of stock brokers in the UK today 

  • Full-Service Brokers: This type of broker performs virtually all the tasks for the trader such as account management, providing financial advice, carrying out research, and making decisions on behalf of the client. However, full-service brokers are known to charge some commissions for the services they perform on behalf of their clients. 
  • Discount Broker: This type of broker allows clients to take decisions themselves on which stocks to buy or sell. However, they charge very low commissions for using their platforms. 
  • CFD Brokers: CFD brokers provide attractive leverage for traders to maximize their profits while trading on their platforms.

Factors to consider while choosing a UK Stock Broker

  • Flexibility: UK Stock brokers are expected to be flexible to enable them meet the various demands of their clients. Flexibility entails being sensitive to the client’s needs and adjusting their trading conditions to suit them. 
  • Convenience: All stock brokers in the UK are expected to make their platforms very convenient and easy for the clients to use. They are to make their platforms simple and readily accessible for traders. 
  • Services Fees: An important characteristic that marks a good stock broker in the UK today is the amount they charge as commissions for executing various orders placed by clients. Charging higher fees reduces the client’s profits. Therefore only brokers with low cost for using their platforms are best for trading. 
  • Regulation: Stock brokers in the UK are regulated by the Financial Conduct Authority (FCA). Traders should ensure that their selected stock brokers are duly registered with this body to ensure maximum security for their funds. All other brokers operating in the UK without proper registration with the FCA  could be seen as illegal dealers.
  • Leverage for Trading: Most traders who do not have enough funds for trading rely on the leverage provided by brokers to maximize their profits. It is therefore very necessary for all UK stock brokers to provide enough leverage to help traders maximize their profits while using their platform. 
  • Multiple Stocks: Traders have varied stocks as their favorites. Hence,  all stock brokers in the UK are expected to provide a wide range of stocks already listed on the London Stock Exchange (LSE) market for the traders to make their choice.
  • Track Record of excellence: Brokers with a historical strong record of excellence are most recommended for stock trading in the UK today. This category of brokers understands the client’s needs and has established proper solutions to solve them on their platforms.
  • Client Support: Often stock traders  encountered one problem or another while using the broker’s platform.  It is therefore very necessary that all stock brokers in the UK must establish an efficient customer support service system to assist clients at all times. 

5 Crucial Reasons to Invest in Precious Metals

Sam Allcock
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0
5 Crucial Reasons to Invest in Precious Metals

Precious metals like gold and silver have been prized for their beauty and value for centuries. They are popular investment choices, providing a tangible hedge against inflation and economic uncertainty. Although the gold value can be volatile in the short term, it has a proven track record of maintaining its purchasing power. Silver is often considered to be a more affordable option for investors, and it also offers Industrial uses that give it added value. For those searching to add precious metals to their portfolio, there are many ways to do so, including bullion coins, bars, and exchange-traded products.

As an asset class, precious metals offer several advantages that make them an attractive investment choice. Many people invest in precious metals, like Pamp Suisse gold, to protect their wealth from inflation and economic turmoil. Pamp is an operator in the metal refining process and fabrication. They work in reputed mines and deliver bars and coins worldwide. Some well-known suppliers provide a wide selection of low-premium Gold Bar investments, including The Perth Mint’s bullion, Pamp Suisse’s bullion, and The Royal Canadian Mint’s bullion.

What are the reasons to invest in precious metals?

Here are five reasons why you should consider investing in precious metals.

  1. Protection against inflation

Precious metals tend to hold their value higher than other assets during periods of economic inflation. It is because as the cost of goods and services goes up, so does the price of gold and silver. So, it is an excellent way to protect your purchasing power and safeguard your wealth against inflation.

According to the World Gold Council, gold has outperformed significant asset classes, such as stocks, bonds, and real estate, over the past fifty years. Investors often turn to gold during periods of economic and political uncertainty. This is because it is seen as a haven asset that can protect your wealth from inflation and market volatility.

  1. Increased liquidity

As an investor, you will have no trouble selling your gold and silver bars when needed because these precious metals are highly liquid assets in high demand worldwide. You can easily convert your metals into cash, making them a liquid investment.

This contrasts with other assets, such as real estate, which can take longer to sell and may be subject to more volatile prices. It is important to remember that the liquidity of your investment will depend on the market conditions at the time you want to sell.

  1. Diversification

Did you know that including precious metals in your investment portfolio can help to diversify your assets and reduce risk? This is because they move differently than other asset classes, such as stocks and bonds. For example, when the stock market is going down, the price of gold may go up. This positive correlation can help to offset losses in other parts of your portfolio and reduce the overall risk of your investment strategy.

  1. Maintains purchasing power

When paper money loses value, gold and silver tend to retain theirs. This is because precious metals have an intrinsic worth that is not dependent on the economy’s health. This makes them a great way to preserve wealth and maintain purchasing power over time. The time-tested value of metals makes them a safe investment that you can rely on to hold their value over the long term.

  1. Value increases over time

Its intrinsic value and limited supply make gold a good investment that will likely increase in value over time. The same can be said for silver, a precious metal with a limited supply. This contrasts with other assets, which may go up or down in value depending on several factors.

Conclusion

Gold and silver have been used as forms of currency for centuries. In today’s economy, they are still seen as valuable assets. Precious metals can be a good investment for many reasons. They are rare, have a long value history, and are tangible assets. So, consider these reasons if you are considering investing in precious metals.

New Funds Announced for Capital on Tap to Support Thousands of UK Small Businesses

ABC Staff
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0
New Funds Announced for Capital on Tap to Support Thousands of UK Small Businesses

Aiming to help small UK businesses gain access credit during the anticipated recession and whilst inflation rates sore, Capital on Tap has secured a £200m funding facility with JP Morgan and Triple Point to help with the nationwide support.

Capital on Tap, launched in 2012 will provide an all-in-one credit card designed for small businesses as well as a sophisticated spend management platform tailored to those in need. The Sunday Times and the Financial Times have both recognised Capital on Tap as one of Britain and Europe’s fastest-growing businesses. Currently, 200,000 plus small business customers have spent £4 billion on their Capital on Tap Business Credit Cards.

This new funding facility comes just four months after securing a $200m facility to power growth in the US. Both facilities are vital resources with ambitious expansion plans in place, following Capital on Tap’s impressive 61.98% annual sales growth over the last 3 years. 

Alan Hart, CFO, Capital on Tap, commented: “We are thrilled to be working with JP Morgan, whilst continuing our long relationship with Triple Point. Their willingness to support our mission of “Making the Lives of Small Businesses Easier” not only recognises the importance of this mission but also Capital on Tap’s track record of delivering.”

Rob Tanna-Smith, Executive Director, at J.P. Morgan said, “We are pleased to be working with Capital on Tap on this new facility to fund credit card lending to support small businesses throughout the UK.”

Neil Richards, Partner and Head of Private Credit, Triple Point said: “We are delighted to continue our longstanding relationship with Capital on Tap by providing this new facility. Having first supported the business in 2014, this facility is further evidence of the depth of relationship we have built with Capital on Tap over the last 8 years. We look forward to supporting them long into the future.”

About Capital on Tap

Capital on Tap makes it easy for small businesses to manage their business spending, access funding, and earn cash back, travel, and gift card rewards. Over 200,000 small businesses have spent £4 billion on their Capital on Tap Business Credit Cards across the US and UK.

About Triple Point

Triple Point is the place where people, purpose, and profit meet. Since 2004, we’ve been targeting this Triple Point in areas like infrastructure, energy efficiency and social housing, unlocking investment opportunities that make a difference. We manage over £2.7 billion of private, institutional and public capital across five distinct investment strategies: Social Housing, Energy, Digital Infrastructure, Private Credit, and Venture. Each of these strategies helps to solve a problem society faces, and each one creates opportunities for investors. Our investments transform public services, get businesses off the ground, and even kickstart whole markets. 

Documation and StatementMatching.com team up to provide another piece in the finance process automation puzzle

ABC Staff
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0
Documation and StatementMatching.com team up to provide another piece in the finance process automation puzzle

The innovative Finance Process solution provider Documation Software, has announced that it has founded a strategic partnership with StatementMatching.com  the market leading Statement Reconciliation software company.

The goal is to enrich and extend Documation’s range of finance process automation. This partnership will provide Documation’s customers with a powerful combination of tools for Accounts Payable teams to enable fast, accurate reconciliation of supplier statements, saving hours of manually matching statement lines to invoices, identifying exceptions, duplicates, non receipts and reducing GRNI balances. Documation’s Accounts Payable Automation and StatementMatching solution are structured to work seamlessly together making implementation easy with minimal IT involvement.

John Wallace, CEO of Documation said “Partnering with StatementMatching.com has increased our offer for Finance Process Automation Solutions for our both our new and established customers.  When choosing a partner it was essential that they had the same ethos as Documation.   StatementMatching.com were established in 2008 and have worked collaboratively with their customers to refine their solutions and respond to market needs ever since.  This pattern of customer-centric development is also core to Documation’s success and reflects a synergy between these two customer focussed and innovative software solution providers.”

Dan Kimpton, CEO StatementMatching.com responded “We are delighted to welcome Documation as a valued partner. There is enormous potential for mutual growth between the two company’s complimentary product sets, combining the leading statement reconciliation solution with the leading invoice automation platform. We are looking forward to a long, successful partnership”.

For more information about Documation, please visit us  here or follow us on twitter or LinkedIn.

About Documation
Documation is a leading provider of document-centric workflow and content management software, delivering services and solutions to businesses and organisations in the UK, Europe and around the world. As a company we have over 25 years’ experience of supplying solutions across markets and industries, offering a portfolio of solution templates for common business areas including Accounts Payable Automation, Purchasing and Expense Management.

How to avoid costly contract mistakes

Sam Allcock
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0
How to avoid costly contract mistakes

Every business owner wishes they had more time. There’s so much to do, especially when you’re starting out. There’s the hiring of a new team, marketing plans, products launches and all while someone is keeping an eye on the purse strings.

In a fast-paced environment, it’s so easy to overlook a detail that many be worth a lot of time. There are lots of contract mistakes you can avoid when it comes to clients and suppliers. See how you can identify them here…

Not taking accurate notes

When all hands are on deck, deadlines are looming and the pressure is on, things happen fast. Then there’s changing details or shifts of meetings which may confuse things further. Perhaps people are making changes to shift patterns via text or updating how a building project is going via Whatsapp. There may be many people involved in these chats.

Laying out what was agreed in one document saves a lot of heartache later down the line. You cannot rely on your memory in a growing business environment. Not documenting accurately is one of the most common contract mistakes you can make. Avoid this risk for your business by setting up a clearly detailed contract to fully document all the terms, conditions, and include who is responsible for what.

Standardising

Choices are always great. Everyone likes a menu with variety.

However when it comes to business, keep it simple. Stick to standardising systems, processes, and paperwork to save time. Readymade forms and templates are faster than starting from scratch. With this in mind, delegation is easier and oversight is prevented. Nothing can get left out, overlooked, or forgotten if a one-stop shop system is used.

Sign and bind

Not getting a signature is the biggest contract mistake you may be making. Anytime you enter into a business relationship with a client, sub-contractor, or supplier, be sure to close it with a proper contract.

Without one that is signed, your contract is not legally binding. A scruffy note, an email and a verbal chat are not good enough. The best thing to protect your company and minimise risk in a business relationship is to get legal advice on contract preparation and ensure it is legally binding.

Which accounting software for a small business?

Sam Allcock
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0
Which accounting software for a small business?

Thanks to affordable accounting software, long gone are the days when you’d need a room full of filing cabinets to keep track of your accounts, and even the humble Excel spreadsheet has been rendered a relic.

Managing your tax is much easier today with the right software. No longer do you have to stash stuff in filing cabinets or write notes in little books.

Now you can keep track of all your spending, receipts, invoices and how much tax you’ve paid from one centralised platform.

Now, under Making Tax Digital, it’s becoming obligatory for many businesses to use compliant software for taxes and accounting.

All VAT-registered businesses now have to maintain digital records and file VAT returns to HMRC through approved software.

Some of the top providers and what they offer

FreshBooks offers recurring billing, client retainers, and real-time reports. It also offers several pricing tiers suitable for small businesses so you’re bound to find a cost that suits you.

Crunch offers software but in addition, you can call on help from expert accountants as standard. They currently offer a discount of 50% off the first three months on your new software and support.

With Ember, you can expect automated filing, easy invoicing and more. Accountants are on hand to support you

QuickBooks is recognised by HMRC and is so smart and simple to use so it lets you get on with what you best – running your business. It helps manage taxes, cashflow and sorts out payroll in one swoop.

How to choose the right provider

Every small business is different and some will need more features than others. But as standard most could do with an invoicing function and a way to track income and expenditure.

Even if you think many of them are similar – which they are – you might like the design or feel of one app over another plus, there’s inevitably, the cost.

It helps to create a list of questions to consider – here are just a few.

  • Do I need to track inventory and purchase ordering?
  • Do I need to invoice payment deadlines?
  • Will I be doing self-assessment as a sole-trader?
  • Do I have payroll to sort out?
  • How many staff will need to use the software?

Gary McGaghey’s Four Ways for New Private Equity CFOs to Prosper

Claire James
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0
Gary McGaghey’s Four Ways for New Private Equity CFOs to Prosper

Many financial leaders are on the hunt for a new opportunity to expand their skills and challenge themselves. And CFOs who have transformed the financial environments of listed and privately owned companies may be keen to transition to a private equity company where they can take the lead on revival strategies and/or multi-year growth plans. Few career opportunities give CFOs the same chance to strengthen and transform a company for success as becoming a private equity CFO.

However, switching from a privately owned or listed company to a private equity company often comes with challenges. CFOs often have less time to reach target results. They’re often under scrutiny from investors. Borrowed capital usually equals bigger risks. And some private equity companies request frequent updates from the CFO so other business leaders can also contribute to financial decisions.

But when a CFO is new to the private equity company, and maybe the industry too, they probably don’t have relationships established with members of the C-suite team. And they probably don’t have a legacy in the company to support them. Therefore, CFOs who are new to private equity need to establish a strong team quickly so they can progress with their transformational ideas and the implementation of future-proofed initiatives.

The group and divisional CFO Gary McGaghey explains that private equity challenges are much easier to tackle when the CFO can build a strong fact base for making financial decisions, catch up with the economics at play, recognise talent gaps in teams, and lead with transformation in mind. Here, he shares four strategies to help CFOs who are new to the private equity space prosper in their roles.

1.    Get Comfortable With Complicated Cash Flow Requirements

Experienced CFOs will be confident handling a company’s cash flow, debt covenants, and balance sheet. But the economics can get more complex in private equity companies. Debt usually fuels these companies’ investments, which can lead to demanding cash flow management. CFOs in private equity companies often need to report on cash flow every month or even every week.

Gary McGaghey explains that private equity CFOs also often need to spend time evaluating the details of what creates cost and what creates value in an exit scenario. They often need to analyse variable and fixed costs to identify the most important factors in a company’s operating leverage. In this situation, a deep understanding of IT systems and tools can be key to understanding critical data.

However, pre-existing data reports don’t often help CFOs understand the company’s position, especially when these reports aren’t providing a robust, consistent “end to end” perspective of the business cash model. CFOs typically need to develop their own understanding of the company’s cash levers over time while managing cash improvement initiatives and financial operations.

2.    Develop an Ever-Expanding, Reliable Fact Base

It can be challenging for a CFO who starts a new role in a private equity company to build their knowledge of the company quickly. Ideally, they should develop an ever-expanding, reliable fact base to pinpoint value creation opportunities, especially opportunities that the company can capitalise on quickly. But most private equity companies lack large volumes of data and the data analysis and tracking capabilities that would allow them to make the most of value-creation decisions.

As a result, Gary McGaghey explains that CFOs need to know where and how to set up low-cost digital technologies to maximise benefits quickly. As an example, a CFO could make targeted investments in productivity-focused tools, such as cloud-based invoice-management software to save time, improve policy enforcement, and improve transparency. CFOs can make targeted investments by seeking the data initiatives that will deliver high-value quick wins and avoid sacrificing long-term gains.

3.    Recruit Good-Fit Talent

Many CFOs excel at talent acquisition and people management. But recruiting the best-fit talent can be especially difficult in private equity companies, where management infrastructure tends to evolve and where investors push for quick results. Although the CFO is often an outsider, they must select candidates who can work effectively under different pressures and circumstances of the business and industry operated within.

Gary McGaghey adds that the CFO might also coach employees from other fields so that they can integrate productively opportunities within the finance team. Employees who develop a thorough understanding of the company’s financial position can become invaluable to the finance team in helping unlock opportunities to adapt the business processes which will drive productivity improvements in the business.

4.    Lead the Company Towards Transformation

From a big-picture perspective, a private equity CFO’s over-arching goal should be to oversee the company’s transformation. To achieve this, they need to manage metrics through robust, although not overwhelming, strategies and clearly define key performance indicators (KPIs).

Gary McGaghey explains that the private equity sponsor will likely identify an investment thesis and assume momentum. In the meantime, the CFO should identify how the company can generate value on both the cost and revenue sides of the thesis. They should then direct resources towards the desired outcome. In an ideal scenario, the CFO would manage or co-manage initiatives to develop a showcase that models the transformation the company is progressing towards.

Prospering as a Private Equity CFO

Gary McGaghey explains that when a CFO has an in-depth understanding of how to generate value for the private equity company and has a firm hold on its finance function, they can become both a challenger and an influencer. Reaching this position enables CFOs to hold CEOs and business unit leaders to account.

The CFO should host monthly business reviews with leaders in all functions. During each review, they should analyse the factual foundation of every business activity and examine every business proposal from an impartial perspective. They should also make certain that every investment decision aligns with the shareholdervalue creation thesis and the priorities in delivering that outcome. This approach can help the CFO become invaluable to the company as they make the financial decisions and lead the strategies that generate desired results.

Learn more about Gary McGaghey’s success as a private equity CFO.

About Gary McGaghey

As a chartered accountant in South Africa and a chartered management accountant in the UK, Gary McGaghey is a divisional and group CFO who has helped an array of companies achieve their transformation goals. These companies operate in a range of industries, such as beverage, pharmacy, media, and fast-moving consumer goods (FMCG).

Having led these listed and privately owned companies to success through impressive organic and M&A-driven growth, Gary McGaghey is now the CFO of the €1.3bn end-to-end marketing production services group Williams Lea Tag. Here, he manages the company’s carve-outs, mergers and acquisitions, divestitures, cost-restructuring programmes, and balance-sheet reconfiguring.

Gary McGaghey is also the non-executive director of Fitmedia UK, which develops children’s fitness analysis and testing solutions. Before taking on his current roles, he held statutory executive director and non-executive roles for listed companies and privately owned companies, including Robertsons, Nelsons, and Unilever.

THE MENTAL HEALTH BENEFITS OF IMMERSING YOURSELF IN NATURE AND LIVING AN CAMPERVAN LIFESTYLE

Sam Allcock
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0
THE MENTAL HEALTH BENEFITS OF IMMERSING YOURSELF IN NATURE AND LIVING AN CAMPERVAN LIFESTYLE

Camping is such a popular pastime because it provides several benefits that assist us both physically and emotionally.

However, you may discover that spending time at a campground is not your ideal nature escape. These locations bring noise, crowds, and everything that the wilderness does not, diminishing the wonderful impact nature has on your mental health.

Looking for the best camper van for sale allows you to avoid these crowded campsites, letting you reconnect with nature and reap the benefits of the experience.

The Mental Health Advantages of Immersing Yourself in Nature

Several studies have shown that immersing ourselves in nature improves our mental health and overall well-being. Some of the top reasons for spending time outside help to a better, healthier life are listed below.

Serotonin levels skyrocket

Serotonin is the hormone that regulates our mood, happiness, and contentment. Serotonin deficiency causes anxiety, tension, and depression. Too much time spent working, perusing the internet, and dealing with daily worries can reduce the synthesis of this hormone.

When you spend time outside, your serotonin levels rise. Exercise and exposure to sunlight are two natural and highly effective strategies to increase the amount of serotonin your body produces. The result? A boost in self-confidence reduced anxiety and promoted a positive outlook. A holiday to nature may be just what you need if you’re feeling down or stressed.

Endorphins are Increased.

Camping trips frequently involve more outdoor activities, such as hiking, canoeing, or fishing. The more you work out and move your body, the higher your endorphin levels will be. Endorphins are natural compounds produced by our bodies to ease stress and pain. A leisurely walk by a river or a ride through the mountains will leave you feeling less agitated and anxious, ready to face whatever the day has in store for you.

Of course, locating a location near a natural feature, such as the mountains, boosts your chances of participating in these activities even more. Unfortunately, this isn’t always possible with a standard Camper van. However, thanks to their tough, all-terrain construction, off-road camper van trailers can go almost anyplace.

Restful Sleep

Melatonin is another natural hormone produced by the body that helps to regulate sleep cycles. Too much time spent indoors or in artificially light surroundings reduces melatonin production. Low levels of this hormone cause irregular sleep patterns, restless nights, and a fatigued and unrested sensation during the day.

Increasing your melatonin production is simple, and all it takes is some time spent outside. When the sun goes down, our bodies go into melatonin production mode, making it easier to fall asleep and wake up feeling refreshed. However, exposure to light, even artificial light, hinders this natural process, making falling asleep more difficult. When we go out into nature, we use less artificial illumination, which allows our circadian rhythm to reset, making it simpler to get a decent night’s sleep.

Perspective Change

Because you are bombarded with emails, social media notifications, phone calls, advertising, and the influence of others around us daily, it is easy to feel overwhelmed or as if you are not accomplishing enough or moving in the right direction.

You can adjust your viewpoint by spending time in nature away from the “noise” of daily life. The relaxing sounds of water, the cheerful tweeting of birds, and the overall silence of the woodlands help you focus and perceive a more hopeful road forward.

Because they can handle rugged, difficult terrain, off-road camper trailers make it much easier to reach spots in the outdoors that offer this kind of tranquillity.

Remove Yourself From Digital

Several studies have found that spending too much time online or behind a screen might lead to sadness and anxiety. Spending time away from phones, tablets, TVs, and computers to detox your online life is a terrific approach to reset your mind and broaden your happiness.

While the off-grid trailers have continuous power, allowing you to use these devices, the potential of these travel trailers to take you off the trodden path and immerse yourself in nature is unrivaled. You’re unlikely to want to play on your phone instead of taking a trip in the woods or going rock climbing, so disconnecting from technology is straightforward.

Where Can I Get an Overland Camper Van?

Now that you can easily see the benefits of immersing yourself in nature, chances are your desire to stay at a crowded campsite has evaporated entirely.

This means you’ll want to take your camping experience to the next level – off the grid. While roughing it in a tent is good when there are conveniences nearby, it isn’t so great when you’re out in the middle of nowhere.

The ideal solution is to purchase a camper van that allows you to cross all terrains and survive without the amenities of a campsite. While there are a few on the market, buying a quality overland trailer from a respected company is your best chance. After all, you’ll be out in the middle of nowhere, and you’ll need a reliable travel trailer.

OMC Motorhomes offers a unique take on an off-road camper van with innovative designs that prioritize safety while fostering an outdoor luxury lifestyle that keeps you close to nature.

Final Thoughts

Nature provides many benefits that improve your mental health. To reap these benefits, though, you must spend time in nature, away from crowds, noise, and electronics.

The best way to enjoy nature is to organize a trip utilizing an overland campervan trailer, which allows you to leave the hustle and bustle of a campground and relax.

Facebook to pay music rights holders a proportion of advertising revenue on user generated content

Sam Allcock
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0
Facebook to pay music rights holders a proportion of advertising revenue on user generated content

As had been expected and anticipated, Meta has recently stated that it would be switching to a revenue-sharing model for user-generated video content, which will affect how artists and music rights holders get paid from Facebook

Meta’s new ‘revenue-share’ model will see Facebook pay music rights holders a proportion of ad revenue on user generated content. But how exactly will this work, and what does it mean for video and music advertising? We’ve put together this guide to outline all you need to know.

Music rights holders push for a revenue split

Most of the music we see in pop culture and the charts nowadays have usually accumulated a great amount of its popularity from video sharing apps like TikTok, with video creators sparking trends using music created by original artists.

The sharing of money among various social media platforms has been a point of contention for music rights holders for some time. Social media platforms like TikTok and Facebook appear to be becoming more and more popular – as are their creators – but artists and music rights holders don’t seem to be benefiting from them as much as the creators who are profiting off of their music.

Facebook listen to artists’ demand for monetisation

For some time now, many musicians have received upfront payments for their work, instead of getting paid each time one of their songs is streamed, or used on a platform, and thus making money every time someone hears their own music.

 Monetisation is a much fairer way for music rights holders and artists to profit from music advertising on social platforms like Facebook. After all, artists’ music can be streamed several times a day on video-sharing platforms and popular videos. Hence, it’s only right that their music is monetised, allowing them to receive money every time their material is played.

Meta have listened up and taken it on themselves to change the way music rights holders are paid on their Facebook and Instagram platforms. But what does this mean?

What is Meta’s revenue share model?

As we mentioned, a revenue-share model will replace all user-generated video material. Video creators who use licensed music in their videos will receive 20% under the new revenue share model Meta have in place – this applies to any video that is over 60 seconds.  Funds for this will come from the advertising income their created video content generates. The remaining funds will be divided equally between Meta and the song rights owners.

How much do music rights holders receive?

Video creators will receive 20% of the funds while the other 80% is split between the music rights holders and Meta. Therefore, a split of 80% of the money made from an artist’s music will go to the owners of the rights. The details of the split have not yet been disclosed by Meta, but artists can certainly anticipate a much higher profit from their own music with this new model.

Final thoughts

As you can see, such a change to how artists receive compensation for the use of their music is a positive step forward. It makes sense in context of the new ways that we enjoy music, and the consistent growth of social media.

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