News Excerpt:

The Securities and Exchange Board of India (SEBI) has stepped in to protect small investors by proposing to bring a class of “unregistered financial influencers," now termed ‘finfluencers’ under regulation.

Who are finfluencers?

• Finfluencers are people with public social media platforms offering advice and sharing personal experiences about money and investment in stocks. 
• Their videos cover budgeting, investing, property buying, cryptocurrency advice and financial trend tracking.

Major issues related to regulation of finfluencers: 

• The issue is that finfluencers may have vested interests in making money by enticing followers to take a particular action. 
• Digitization is another issue, the Reserve Bank of India has a campaign asking people to be careful, but one can still fall into the trap of being duped through online links and calls. Ultimately one is told that caution has to be exercised, the onus is on the individual to stay alert and away from scamsters.
• In the world of social media, one knows that it is very hard to control what is circulated or consumed. While the SEBI’s paper on the phenomenon asks registered entities not to have any dealings with such finfluencers but tracking them is a challenge. 
• While protecting investor interest is necessary, There is a lot of information formally presented by mutual funds and insurance companies that can be misleadingly influential.

Way forward:

• At the broader level, other regulators too should examine closely how to control unscrupulous entities from exploiting the individual. 
• The government too could get involved in the project to moderate how several other influencers affect household consumption patterns.
• SEBI has timely addressed this alarming call and has set out to draft guidelines for finfluencers. It is pertinent to establish a quality check on finfluencers which ensures that individuals who possess sufficient educational and professional qualifications in the financial field are permitted to provide financial advice. 
• A system of checks and balances needs to be established by SEBI under its guidelines.  

Conclusion: 

Indian finfluencers cannot be left unregulated as they hold the potential to affect investment decisions and trends of massive online consumers and it’s the call of the hour to monitor such influencers.