The new SEBI consultation document represents an admirable step toward regulating the expanding finance content creation sector. The industry’s responsible expansion depends on tackling the ubiquitous problem of inaccurate information and content producers who are motivated by profit.
The transmission of screenshots by finfluencers of the money they are making on trading and derivatives via channels like Telegram and providing stock recommendations and tips for subscribers has been one of the major issues in the world of financial content creation. These deceptive representations have persuaded unwary audiences to engage in financial activities that frequently result in significant losses based on the mentorship they go on to seek from such channels.
I have made the decision to refrain from making videos that are focused on certain stocks or mutual funds because I view myself as a responsible content creator in the finance sector. Instead, I concentrate on creating personal finance educational content that gives consumers knowledge and decision-making abilities.
For Example, while working with a brand like CRED, we weren’t promoting the brand directly but more so the importance of paying your credit card bills on time. It’s more about building awareness about basic financial habits. I can therefore prevent unintentionally influencing viewers’ financial decisions by using this strategy. My primary source of income comes from partnerships with personal finance promoting brands, thus these new SEBI regulations have not had a huge impact on my business because I am driven by putting audience education before advocating particular financial products.
The consultation paper’s absence of procedures for specifically registering finfluencers, however, is a notable flaw. The proposed SEBI standards appear to be geared toward SEBI-registered firms, but little thought has been given to simplifying the registration of finfluencers. Many of us don’t register not because we don’t want to; instead, it’s because the registration categories that are now available don’t fit with our business models of exchanging financial and general information through infotainment content.
It’s critical to remove the myth that all finfluencers are only interested in offering stock recommendations or making grandiose claims of financial success. Many of us creators are committed to raising awareness among investors and consumers alike, even though some of us may partake in such behaviors. Our content includes a wide range of subjects from fundamentals of personal finance to general financial well-being advice.
I believe Finfluencers ought to be viewed as being similar to media outlets. In order to engage and educate our viewers, we generally offer entertaining and educational content. We work in the fluid environment of social media, which requires flexibility and agility, unlike traditional media. The role we play is similar to information disseminators like media and news outlets. Just that our formats and content development is different and catered to our target audience.
To sum up, SEBI’s consultation paper is a positive first step toward regulating the financial content creation sector. But it’s essential to follow the finfluencer registration rules with more specificity. This strategy ought to take into consideration the variety of our material as well as the beneficial part we play in spreading financial literacy and instructing a new generation of consumers and investors. It is crucial to strike a balance between regulation and the freedom to share knowledge if we want to ensure the responsible development of this emerging sector.
Sharan Hegde aka Finance with Sharan is a finance content creator, investor and the founder and CEO of The 1% Club