‘Trust only the real experts’: read the tagline of a front page advertisement in a business daily featuring a financial influencer (or finfluencer) and a logo of the IT Ministry next to that of YouTube, which has drawn sharp criticism from people on the Internet – who have questioned whether the ad is an endorsement of expertise of finfluencers or a particular social media platform.
While the advertisement does not directly relate to financial influencers, and links out to a YouTube playlist of online safety hygiene, including spotting misleading content, the criticism emanated from the fact that it carried the picture of Rachna Ranade, a popular financial influencer, the tagline, and logos of YouTube and the IT Ministry – at a time when the country’s markets regulator, the Securities and Exchange Board of India, is looking at cracking down on finfluencers.
Rajeev Chandrasekhar, Minister of State for Electronics and IT, clarified Monday (June 26) that the advertisement was not an endorsement of a person or platform. “Just to be very clear – this is not an endorsement of any person or any social media platform… Given that these types of advocacy ads could be misinterpreted, I have advised more careful use of Govt logos in these campaigns by private platforms,” Chandrasekhar said.
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.
Why did the ad attract criticism?
Finfluencers have drawn the ire of the investors’ community, given that they provide unsolicited ‘stock’ tips on various social media platforms without being registered investment advisers. SEBI has taken note of it and is working on guidelines for content creators in the sector. Recently, Finance Minister Nirmala Sitharaman asked people to exercise caution while following the advice of finfluencers.
More often than not, it is unclear if these influencers have any educational or professional qualifications to offer such financial advice, and if there is any kind of monetary transaction that happens between them and the entity they are promoting.
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Some of them have lakhs of followers with their investment advice being closely followed by millions of people across the country. They post videos in English, Hindi and a mix of English and Hindi. What has raised concern is that scamsters are using this route to manipulate share prices.
Do other organisations have influencers under the lens?
Last February, the Advertising Standards Council of India (ASCI) released new guidelines for social media influencers and other advertisers about publishing ads about virtual digital assets (VDA) including cryptocurrencies and non-fungible tokens (NFTs), in line with the government and Reserve Bank of India’s long-held stance on cryptocurrencies.
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Per the guidelines, all advertisements for VDA products, VDA exchanges or featuring VDAs should carry a disclaimer that says, “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions”.
Earlier this week, ASCI also released its half-yearly report of complaints it received between April-September 2022, detailing social media influencers that were found to be non-compliant with its advertising guidelines.
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Among those that allegedly violated its guidelines was a top Bollywood actor who posted an ad about ‘Beyond Life NFT’. ASCI said that between April 2022 and September 2022, it processed 781 complaints against social media influencers of which around 2 per cent were related to ads about financial instruments, mostly cryptocurrencies.
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