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In the last 2-3 meetings, there has been a discussion that if influencers are bad
or nice. A bunch of content creators started making videos on how to invest in
securities, personal finance, and banking products. Finance education is available
to all at no cost, and creators become rich, famous, and successful, and they live
happily ever after.
Well, that is not how life is, and this is not how this story ends. On 25th August,
Sebi released a proposal to restrict regulated entities with unregistered
finfluencers. i.e. the companies listed on stock exchange, these finfluencers
cannot advise anymore on their stocks.
Because these creators make content around finance, and they have the ability to
influence financial decisions of their audiences, that is why they are called
finfluencers. After Sebi passed this law, neither will finfluencers be able to earn
referral fees, nor any promotional advertisement fee, which is basically their main
source of income. Primary criticism against these finfluencers is that they hype
returns and underplay risk.
In 2022, popular crypto lending platform, Volt suspended its withdrawal and deposit
services, which caused panic in the crypto world. Many people blamed these
finfluencers for their losses. Akshat Shrivastav was also making videos for Volt's
own YouTube channel.
And interestingly, Akshat himself did not invest in Volt. Saad Khan from Bhopal,
who got influenced by Akshat's video on Volt, invested 60% of his life savings in
Volt. And now, it's all gone.
Thousands of people like Saad Khan's hard-earned money was lost in the Volt scam.
Now either Sebi should control what finfluencers say on social media, or ring
fenced finfluencers from regulated financial markets. And Sebi has opted for this.
Sebi is following the rules that are followed in Australia regarding this matter.
But it's not that simple. But you need to know that this is not allowed as per
Sebi.
Because ultimately, the advice that the person is giving is not registered. So Sebi
is going to put a stop to this model soon. We all know the consequences of messing
up with Sebi.
When on 25th May, Sebi penalized PR Sundar for providing investment advisory
services without a license. He had to pay a settlement amount of Rs. 46.8 lakhs and
Rs.
6 crores, which included profits earned from advisory services and interest
thereon. Sebi is basically putting an end to finfluencers. So either you get a
license and become a financial expert, or just remain a finfluencer where you talk
about yourself and financial independence.
But you can't do both at the same time. So this was the story about finfluencers.
And what is your point of view on this matter? Do let me know in the comments.
And if you liked the video, then do consider subscribing. I'll see you in the next
video with a new topic. Till then, you take care, have a nice day.
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