Is it time to regulate financial influencers?

The rise of finfluencer

There is a lot more happening on social media platforms these days, than the sharing of messages, family photos and videos. It has grown beyond being a platform for light-hearted conversations.

Users are increasingly relying on it for news, lifestyle hacks, and particularly financial advice — the trickiest of them.

Latching on to the demand, influencer marketing has boomed with followers running into millions. The staggering rise in markets after the pandemic has also led to the rise of this new phenomenon.

The influencers, especially in finance, have a tremendous impact on an individual’s investment decisions. The main content of financial influencers includes educational videos on economy and markets, stock advice and other personal finance related advice.

A financial influencer or finfluencer may not be qualified enough or a registered investment advisor to be giving advice to the public. But millions of followers still buy into the content because of the simplicity. These influencers break down head-scratching financial jargon in simple terms and explain it to the layman.

Registered investment advisors are authorised by the markets regulator to advise clients on financial matters. India has about 1,300 registered investment advisors.

Financial influencers, although offer financial literacy to a certain extent, pose risks to individuals’ financial…