The Rise Of Finfluencers: Why Is SEBI Monitoring Them? SEBI shall be making sure finfluencers aren't breaking any rules or leading their followers down a dangerous financial path.
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There's a new breed of influencers in town taking social media by storm. Finfluencers, as they're popularly being referred to, create content on financial advice and the Indian audience seems to be lapping up their videos. Information regarding insurance policies, investment schemes and making money are some of the most searched topics in the finance domain, and those who can give clarity and guide people in these fields are gaining a huge following.
"Finfluencers are offering tips on everything from saving for retirement, taxes, insurance, stocks to investing in cryptocurrency. And let's be real, people love taking financial advice from someone with a perfectly curated Instagram feed and a seemingly endless supply of motivational stories," says Kunwar Raj, Founder, Unfinance.
But why is SEBI monitoring them?
Raj explains that finfluencers can be a great source of information, but it's important to remember that not all financial advice is correct. With great power comes great responsibility, and that's where SEBI comes in. SEBI, or the Securities and Exchange Board of India shall be making sure finfluencers aren't breaking any rules or leading their followers down a dangerous financial path.
Raj outlines three reasons why it is important for SEBI to regulate finfluencers.
1. Misleading information: Finfluencers may not always have the necessary expertise or qualifications to provide accurate financial advice.
2. Conflicts of interest: Finfluencers may have financial incentives to promote certain financial products or services, which could lead to biased or self-serving advice.
3. Investor protection: Regulating finfluencers helps protect the interests of investors by ensuring that they have access to accurate and reliable financial information. .
Ayush Shukla, creator and founder of Finnet Media elaborates on the first point above by saying that these finfluencers may not have formal educational training in the areas they speak in and the number of 'unregistered' investment advisors providing unsolicited 'stock' suggestions on social media sites has skyrocketed. "SEBI is working on guidelines for these finfluencers. The basic functions of SEBI is to protect the interests of investors in securities and to promote and regulate the securities market. SEBI indicated that guidelines for 'finfluencers' are being devised so that unregulated and unlicensed self-appointed advisors are not jeopardizing consumers' financial investments who listen to their advice and end up losing lifelong worth of their income," Shukla tells us.
So just like any other job – these finfluencers will be bound by certain norms and restrictions by SEBI, yet have the leeway to produce content of their choice on their chosen social media platforms. For those who might feel that this goes against the community in some way, Shukla counters that thought by saying that this initiative by SEBI would be appreciated by the fin-influencer community because it shows that the government recognises the role of content creators and is working to make influencers a reliable source of information.
