Unregistered finfluencers spark concern especially among investors over 40: Report

In the digital age, financial influencers, or "finfluencers," have emerged as prominent figures guiding retail investors through the complexities of the stock market. These individuals leverage platforms like YouTube, Instagram, and Twitter to share investment insights, stock tips, and personal finance advice, often reaching millions of followers. 

However, a recent survey by the CFA Institute reveals a concerning trend: only 2% of these finfluencers are registered with the Securities and Exchange Board of India (SEBI), yet 33% actively provide stock recommendations. 

The CFA Institute's recent study, as cited by a report in Livemint, sheds light on the risks, misinformation, and undisclosed motivations that are shaping the expanding influencer economy in India, as more and more individuals rely on social media for financial advice.

According to the findings of the report released in March 2025, a staggering 82% of investors who follow financial influencers on social media have taken action based on their advice, with 72% of them reporting positive financial outcomes.

Finfluencers and their influence

The democratisation of financial information has lowered barriers to stock market participation. Finfluencers, with their relatable content and accessible language, have played a pivotal role in this shift. They often share personal investment journeys, market analyses, and educational content, making investing seem approachable to the average person. This trend is not confined to India; globally, platforms like Reddit's WallStreetBets have shown that collective retail investor actions can significantly impact markets. 
​
Regulatory guide

Despite their growing influence, the lack of regulatory oversight is alarming. The CFA Institute's survey highlights that a vast majority of finfluencers operate without SEBI registration, raising questions about the credibility and reliability of their advice. Arati Porwal, Country Head of CFA Institute - India, emphasized the need for investors to remain vigilant and seek guidance from SEBI-registered advisors, scrutinizing the credentials of the influencers they follow. ​

Sebi's vigilance

In order to prevent finfluencers from misleadingly selling stock tips on social media platforms disguised as educational content, the markets regulator Sebi has released a preliminary circular limiting the use of current share price information. According to this circular, individuals solely engaged in educational activities are not permitted to provide advice or recommendations related to securities unless they are registered advisors.

"Such person (someone who is engaged solely in education) should not be using the market price data of the preceding three months to speak/talk/display the name of any security including using any code name of the security in his/her talk/speech, video, ticker, screen share, etc. indicating the future price, advice or recommendation related to security or securities," Sebi said in a circular in January.

Furthermore, non-registered finfluencers are prohibited from making any claims regarding investment returns or performance, either explicitly or implicitly. Sebi warned that individuals found in violation of these guidelines could face penalties, suspension or cancellation of registration, and other disciplinary actions.

The regulator, in response to mounting concerns regarding the influence of unregistered financial influencers (finfluencers) on stock prices, recently implemented new regulations. These regulations prohibit regulated entities such as mutual fund houses, research analysts, registered investment advisors, and stock brokers from collaborating with unregistered finfluencers. 

Last year, Sebi amended norms to oversee and monitor unregistered finfluencers and to limit partnerships between regulated entities and unregistered individuals. Sebi has already taken action against finfluencers like 'Baap of Chart', Ravindra Balu Bharti, and PR Sundar for breaching these regulations.​