Finance Influencers Feel FM’s ‘Warning’ About Regulating Them Can Bring Transparency

Finance Minister Nirmala Sitharaman on Sunday addressed the issue of financial influencers in India and warned of the dangers of Ponzi apps offering financial solutions.

Speaking at an event in Tumkur in Karnataka, the FM said that while there is currently no proposal to regulate "influencers," but noted that a word of caution is essential. “When you take financial advice at face value, it means you are risking your hard-earned money. If there are three or four persons giving us objective suggestions, there are others who are probably driven by some agenda. We must always double-check and tread cautiously,” she said at an event in Tumkur, Karnataka, on Sunday.

The growing number of finance or fintech influencers in India, especially on social media apps like Instagram and Youtube, has already got the alarm bells ringing. While brands and fintech apps prefer using them to reach out to the internet friendly audience, there are talks of government regulations for them too. BW spoke to a few influencers to see what they feel. 

Jay Desai, Finance Content Creator and Chartered Accountant, welcomed the call of the government to set up guidelines around financial influencers. With 2,30,000 plus followers on social media, Desai is indeed a popular name. He says, “I believe this move is aimed at bringing in transparency and accountability in the field of financial advice and education given on social media platforms. And with the rise in the number of people seeking financial advice from the internet, it is very important to ensure that the information provided by financial influencers is accurate and unbiased.” 

Desai further adds, “Overall, guidelines for financial influencers are necessary to maintain the integrity and trust of the financial advice and education industry. However, it is important to ensure that the guidelines are practical and feasible for influencers to follow, without unduly restricting their ability to provide valuable insights and advice.”

Another finance content creator Ujjwal D Gadhvi feels that the rise of finance influencers is both a boon and a bane. He has 918K followers on social media and has spoken on the Tedtalk platform. “Less to no barriers of entry has made the rise of finance influencers a boon as well as a bane. Boon, because authentic creators are creating awareness. But bane because not all information shared on social media is credible. To address this, just like we say, "Buyer beware," it's now Time to say, "Viewer beware." As Content viewers, we must try to verify these things about Content creators - their educational qualification, their past work experience, their subject matter expertise and whether creators share legit sources of information which they use to make Content.” 

Chandralekha, also known as financewizardcl, says that finfluncers content today can be categorised into three buckets - Knowledge, Opinion and Advice. “Knowledge means Content talking about new policies, new investment schemes, interest rates, decoding clauses in Insurance, saving money hacks, educating people to manage personal finances etc. Opinion would mean Content showing personal experiences, analysing the existing opportunities, comparing multiple investment options, talking about a knowledge piece with added opinion and advice means Content providing stock tips to people, promoting specific products, get rich quick schemes, trading calls, etc. belongs to this category.”

She adds, “As per the current scenario, people and government are facing the highest threat from the content in the third bucket. Why? because there have been recent cases of pump and dump schemes, Ponzi and MLM schemes duping people of lakhs of money. I personally feel this is to be regulated, however the categories and nuances in the space must be recognised by the Government for the greater benefit of all. If we see the other side of the story, many people have started investing, or atleast considered investing in government schemes and mutual funds after consuming authentic Personal Finance content. One also has to note that, Nirmala Sitaraman Ji not only mentioned the negative side of the coin but also opined that some of them are providing objective based advice.”