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The report emphasises Importance of traditional financial advisors amidst rising popularity for finfluencers.
- Term ‘Finfluencers (or financial influencers)’ refers to individuals who uses social media to share information, recommendations, or guidance on financial advice, news or other related matters.
- They have potential to shape the financial decisions of individuals.
Key highlights of report
Reasons for rise in finfluencers
- Accessibility of social media: Around 60% of the global population uses social media.
- Feeling of inclusivity in content: Creators with diverse backgrounds across language, geography, race, ethnicity, and lived experience caters to a wider audience.
- Engaging content: learning about financial topics is more engaging for novice investors through short, entertaining videos, memes and metaphors, to explain financial concepts.
Importance of traditional financial advisors
- Risk associated with finfluencers’ advice: Due to opaque algorithms, catchy posts may be prioritized over quality.
- Ensuring individuals wellbeing: Traditional financial advisors and institutions have a critical role in ensuring access to holistic, personalized advice, risk management and education to enable successful investor outcomes.
- This holds significance as retail investing volume doubled in the past decade, with 19.5% of stock market shares traded by retail investors in 2020 (Globally).
SEBI actions for regulating Finfluencers
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