The Rise of Finfluencers in India: Evaluating their Impact, Regulatory Response, and Pathways for Advancement

Abstract

With the explosion of social media in recent years, social media influencers have become important players in the digital landscape. These influencers with a substantial number of followers and subscribers generate and upload content in different domains and capture the imagination and minds of users of these digital platforms. Finfluencers, are a breed of social media influencers who act as financial advisors and post content on investment, personal finance, mutual funds etc. on various social media platforms. In the last couple of years, a number of unregistered finfluencers have come under the scanner of the Securities Exchange Board of India (SEBI) due to fraudulent practices and the Regulator has taken note and action against them. This paper is descriptive, based on secondary data sources and highlights the pros and cons associated with these unregistered financial gurus as also the role of the SEBI. Citing case studies of finfluencer transgressions, the paper drives home the necessity of strict regulation and also recommends a spectrum of suggestions including a blanket ban on individual finfluencers depending upon the gravity of their infractions with a view of safeguarding the interests of naïve and young retail investors who condition their investment decisions based on the online viewpoints expressed by these financial gurus. The study concludes that financial literacy is the key to informed investment decisions.