Almost All Finfluencers Giving Stock Market Advice Not Authorised By SEBI: Report

Around 98 per cent of India’s financial influencers, or “finfluencers,” are functioning without regulatory approval. With only 2 per cent registered with the Securities and Exchange Board of India (SEBI), according to the latest CFA Institute report, Clicks and Credibility: Understanding Finfluencers’ Role in Investment Decisions, released on March 20. The study’s outcome was based on a survey of 1,615 retail investors and content analysis of 51 prominent finfluencers. The report pointed out the growing influence of social media personalities on investment decisions, as well as the risks they pose to uninformed investors.

Arati Porwal, CFA Institute’s India head, stressed the importance of safeguarding investors from misleading financial content. “It’s essential that investors verify the credentials of those they follow and seek guidance from SEBI-registered professionals,” she said. 

Unregulated Advice, High Influence

Despite the low registration rate, 33 per cent of finfluencers actively offer ‘buy or sell’ recommendations. The report raised concerns about how often these financial influencers without accountability, are contributing to an environment where misinformation thrives.

The report found that 82 per cent of investors following finfluencers have acted on their advice and around 72 per cent of investors have reported profits. However, 14 per cent of investors aged 40 and above admitted to falling for misleading or fraudulent recommendations.

Blind Trust and Verification Gaps

The report added that 67 per cent of surveyed investors acknowledged the importance of SEBI registration for finfluencers. Meanwhile. 35 per cent admitted they never verify an influencer’s credentials before making investment decisions. 

Shockingly, 53 per cent of those who claim registration is critical were unaware of whether their preferred influencers were actually SEBI-registered.

Who Are India’s Finfluencers?

The report revealed that most finfluencers belonged to younger demographics, with an average age of 31 years, and 60 per cent are under 29. Social media, particularly Instagram (used by 100 per cent of surveyed influencers) and YouTube (84 per cent), served as the primary platform for financial content dissemination.

Opaque Sponsorships and Misleading Practices

Another rising concern shown in the report was the lack of disclosure regarding sponsorships and financial affiliations. With 63 per cent of influencers failing to clearly disclose their paid partnerships. Even those who provided disclosures often limit them to captions or hashtags, avoiding clear on-video transparency, the report added.

How Investors Make Decisions

The study also examined investor behaviour, showing that 51 per cent prioritise returns, while 39 per cent were more focused on risk levels. However, 37 per cent considered past performance when selecting investments. Notably, younger investors falling between the age group of 21 and 25 tend to invest sporadically, whereas those above 36 prefer structured monthly investments.

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