With the rise of social media, a new kind of profile has come up, i.e., “influencers”. Influencers are not just limited to beauty and fashion gyaan but are also teaching finance.
Every now and then, you might have come across a YouTube video or an Instagram post that asks you to either invest in some stock or way of growing money. However, the problem that arises is that most of them are not registered financial gurus and might be frauds, too.
Who Are Finfluencers?
Finfluencers are a branch of influencers who create content keeping boring finance in mind and create a long format or a short format video for the audience which is entertaining due to the use of graphics, GIFs, and stickers, and is explained using simpler terms.
In India, some of the popular finfluencers are Pranjal Kamra, Ankur Warikoo, Sharan Hegde, Rachana Ranade, and Akshat Shrivastava.
They are on the rise as they give advice on an array of topics like the stock market, stock trading, personal finance, investments, etc., and get lakhs of views on their videos. They are different from other influencers because of their niche i.e., finance.
How Are They Gaining Popularity?
One of the main reasons why finfluencers are gaining popularity is because India’s financial literacy is at 27% according to the National Centre for Financial Education’s 2019 survey.
Also, unlike qualified finance gurus, these finfluencers avoid financial jargon and explain money matters in an easy language and hence their popularity in India.
While talking to Quint, Nehal Mota, co-founder of Finnovate Financial Services said, “Money and health are two areas of our life that have a lot in common. In both, the gap between what we know and what experienced practitioners know is very vast. And to cover up this gap, we often turn to information online – videos or articles written by either websites or self-described experts.”
Why Are They Under SEBI’s Lens?
Nehal said that viewing these videos is fine until and unless the audience is not behaving the way finfluencers want them to.
She further said, “Because of a lack of regulatory oversight in the internet and social media world, anybody can give advice, which makes the world of finfluencers a mixed bag, ranging from the unqualified to the super experienced, but consumers are left to figure out for themselves which is which.”
SEBI has proposed to regulate influencers so that at least they have a basic qualification that is required in financial matters. While some of the influencers aren’t trained, SEBI-registered members on the other hand are rigorously trained, experienced, and certified.
SEBI registered investment advisor, Renu Maheshwari said, “Common people reach out to the internet to get information about products, market outlook, and free advice. Little do they know that nothing comes for free.
Most of the consumers who follow free advice do not understand the money that flows around these kinds of recommendations. It is the small investor who burns their fingers. Crypto mania followed by the crash is one example. We always advise people to check the credentials of the blogger before listening to their advice.”
Pranjal Kamra, a famous finfluencer told Quint, “Finfluncers definitely need to be regulated. In 2013-14, when the regulations for registered investment advisors (RIA) were brought in, its main purpose was to regulate the medium through which advice was doled out.
Ten years ago, financial advice was mostly doled out offline. Nowadays, people mostly turn to social media for such advice, and if that medium is not regulated in some manner, then the purpose of regulation for RIAs also becomes meaningless and will not be fair on them.”
Thus, the finfluencers are under SEBI’s radar because it doesn’t want them to fall into a trap of fraud and seek advice from experienced and qualified financial experts.
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Feature image designed by Saudamini Seth
Find the blogger: Palak Dogra
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