The term “fininfluencer” is currently popular among investors as these people provide advice on personal finance investments, including stock investments, on social media platforms. However, the reality is that these advisors are not officially registered or SEBI-registered advisors, due to which various illegal practices have come to the fore. As a result, the Securities and Exchange Board of India (SEBI), the regulatory body, announced in December that it plans to set up a framework to identify these financial advisors. Should You Trust A Social Media Influencer For Your Funds, Let Us Hear From Industry Experts.
Mr. Ayush Shukla, Producer & Founder, Finnet Media said, “Money is a very important asset and hence it is important to allocate it wisely and more importantly carefully. With Instagram flourishing, there are a lot of people who have worked on content creation – some copy-pasting famous creators without even knowing it. It is important to verify the credibility of creators, their education, background and the type of content they create. However, the final decision should be driven by personal research and customization as per your needs as content creators raise awareness and not customized personal finance solutions. Finance is personal so not everyone can tell you what to do and what not to do, you can reach out to creators for new ways to invest and follow them but the final decision is always based on personal research and guidance must be operated.”
Mr. Kunwar Raj, Founder, Unfinance said, “The question of whether or not you should trust a finance influencer with your hard earned money is a tricky one. On one hand, these influencers can be a great source of information and inspiration. On the other hand, well… most of us have heard stories of so many people blindly trusting a finance influencer who claimed to have a secret formula for getting rich quick? Be aware that these stories usually do not have a happy ending. While there are certainly some benefits to following finance influencers, such as access to valuable financial information and inspiration, there are also risks. One of the biggest threats is the potential for fraud and misinformation. There are many examples of people losing money after trusting someone on the internet who claimed to have a secret get rich quick formula.”
“For example, 8 personal finance influencers in the United States were charged with fraud in December after authorities said they made $100 million by promoting stocks planned on dumping, taking advantage of their followers. It is essential that just because someone has a large following on social media, does not mean they are an expert in the field of finance. Even if they have a genuine interest in the subject, they have a license to finance may not have the same level of knowledge, skills or ethical standards as advisors. On the other hand, there are many trusted finance influencers who are providing valuable information and inspiration to help people manage their finances. They have worked to increase financial literacy. and provided access to a wide range of resources that may not have been easily accessible prior to the advent of social media. Finally, it is important to approach finance influencers with a healthy dose of skepticism. Always do your own research, impress or Verify the creditworthiness of the layman, and consult a licensed financial advisor if you have any doubts or concerns. Also, keep in mind that only you are responsible for your financial decisions. You can also verify product reviews from various sources and check the credibility of Influencers before taking their advice. So make sure you have all the facts before investing your hard earned money. And always be aware of the potential risk before making a decision,” said Mr. Kunwar Raj, Founder.
Ujjwal, Content Creator – Finance, CS said, “Copying content is as easy as liking an Instagram picture. Today anyone who has a phone can become a financier and start talking about money. Thus, in such a situation, you can protect yourself and your money by considering a few things before making financial decisions based on an influencer’s advice or recommendations: Research the influencer’s background and credentials. Do they have any qualifications or experience in the financial sector? Are they professionally qualified (CA/CS/Lawyer) to talk about the material they are talking about? View their content. Is it adding value? Are they providing valuable, informative content or are they trying to sell you something? Consider their objectives. Are they being paid or compensated to promote a product or service? In 99% of cases, the answer is yes. If so, it is important to ask the influencer about his experience with the product or how long he has been using it. Some influencers test the product’s features themselves before telling their audience about it.”
“In another opinion when you come across an advice. Try to get behind why such advice was given? Ultimately it is important to exercise caution when making financial decisions based on advice from influencers. In my experience, 80 % Financiers will not ask you to invest in stocks or mutual funds. They know their responsibilities. Do your own research or consult a licensed financial professional before making any major financial decision, said content creator Ujjwal Always a good idea.”
Shreya Kapoor, Content Creator – Finance, X-Ban said, “Finfluencer’s job is to guide you through the various options available to you. While it is paramount that they also do due diligence before associating with a brand, consumers should take this as a directional answer rather than gospel. It is essential to do your own due diligence around the brand and align it with your risk appetite and time horizon. The audience should ask relevant questions and in fact if they have any issues, use the Influencer as a medium to reach out to the brand. For example: I have covered many queries and problems faced by audience with a brand and got it fixed within 2 days. Most influencers strive to collaborate with brands that they personally use and believe given the volatile nature of the space that their experience will be helpful as to the opportunities available to the audience Makes sense but in the end, personal finance is so specific that no one brand/product can be one size fits all – so DYOR should be a standard practice.”
Anushka Rathod, Digital Content Creator – Business & Finance said, “Absolutely not! You should not trust every finfluencer with your money. It is your hard earned money and you need to be extremely careful. Lots of people on the internet Will give you stock tips, suggest specific policies. These things should strictly come from a SEBI registered advisor. Though a lot of makers are genuine and do their own research to give you proper information, you need to know about the fundamentals and characteristics of certain investments. This information is not subjective and you may use it to begin your research and make your investments according to your unique circumstances.”
Disclaimer: The views and recommendations given above are of individual analysts or broking companies and not of Mint.
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