Against the backdrop of an evolving digital landscape, we commend the Securities and Exchange Board of India (SEBI) for its recent proactive initiative in addressing concerns related to finance content creators, commonly known as “finfluencers”. Recognising the dynamic nature of the fintech influencer sphere, SEBI’s move underscores a dedication to fostering transparency and accountability. These guidelines are anticipated to bring about positive change by providing clear directives on what topics to discuss and how to do so responsibly. This step aligns with the ever-changing digital dynamics, ensuring responsible practices within the financial content creation sphere.
In extending our support to SEBI, it is essential to acknowledge the significance of these guidelines. The vast majority of fintech influencers are dedicated professionals who contribute positively to the financial landscape, providing valuable insights and guidance. The need for guidelines primarily arises from a minority of individuals who engage in questionable practices. SEBI’s initiative aims to ensure that the fintech influencer space remains a force for good, promoting financial literacy and responsible investing.
Recently, there has been a surge in criticism directed towards some finance content creators and their followers. While scepticism is natural, it is essential to emphasise that the concerns are primarily related to a limited segment of finfluencers. These concerns often revolve around extravagant claims, endorsements of questionable platforms and a lack of appropriate disclaimers. However, it is crucial to recognise that this represents a small fraction, less than 10 percent, of the entire finfluencer community.
An impartial examination of the pros and cons of finfluencers reveals that the advantages significantly outweigh the disadvantages:
1. Demat account surge: Over the last two to three years, there has been a remarkable surge in demat accounts, reflecting increased retail participation in financial markets.
2. Democratising finance: Finfluencers have played a pivotal role in democratising the world of financial markets and finance, making it accessible to a wider audience. This increased accessibility has diminished the fear of market volatility, with investors utilising market declines as buying opportunities.
3. Simplified financial education: In addition to traditional media outlets, finfluencers have taken the initiative to simplify complex financial concepts. They present these concepts through relatable narratives, case studies and enjoyable content, all communicated in the language of your preference.
While the role of traditional media should not be discounted, finfluencers have made substantial contributions to financial education and awareness.
The path forward lies in a collaborative effort. It is imperative to establish regulations for finfluencers that provide a structured framework. However, these regulations should prioritise reasonability, fostering compliance rather than evasion. Striking a balance between accountability and freedom of expression is key to ensuring that finfluencers continue to play a constructive role in educating and empowering individuals in the realm of finance.
In conclusion, SEBI’s proactive stance to address concerns about finfluencers is a commendable move that holds the potential to bring about positive change. We believe that by working together and promoting responsible practices, finfluencers can continue to be a valuable asset in enhancing financial literacy and inclusivity, ultimately benefiting all stakeholders in the financial ecosystem.
Harsh Goela is a finance content creator, the co-founder of Goela School of Finance, and a stock market investor.