In a MediaBrief exclusive, Arijit Basu, Vice President Growth & Strategy at BC Web Wise; Meenakshi Gambhir, Executive Vice President of the Scroll Mantra; and Yasin Hamidani, Director at Media Care Brand Solutions, share their insights into SEBI’s latest norms for finfluencers. They discuss the potential impact of these measures on online finfluencers and their implications for the evolving landscape of digital financial advice.
These norms aim to strengthen oversight in the financial advice space, explicitly prohibiting SEBI-registered entities and their agents from engaging in any financial transaction, information exchange, or promotional activity with unregistered finfluencers, unless authorized by SEBI. Read on.
Meenakshi Gambhir, Executive Vice President of the Scroll Mantra sees the regulations in a positive light, commenting, “The Finfluencer community is at a turning point as a result of the new SEBI regulations. Although the limitations might appear difficult at first, they offer Finfluencers a vital chance to standardise their services and become professionals in the field.”
Yasin Hamidani, Director, Media Care Brand Solutions is concerned about the disruption this might cause for finfluencers with regards to partnerships and a potential decrease in income.
“The SEBI regulations prohibiting SEBI-registered entities from associating with unregistered finfluencers will have a significant impact on the finfluencer community. Many finfluencers rely on collaborations with financial firms for sponsorship and credibility. The new rules will disrupt these partnerships, leading to a potential decrease in income for finfluencers who are not registered or qualified under SEBI regulations. Additionally, the credibility and reach of finfluencers may be affected, as they can no longer easily collaborate with established financial institutions,” says Hamidani.
Arijit Basu, Vice President of Growth and Strategy at BC Web Wise, believes that while initially disruptive, the order is ultimately a step towards a responsible financial ecosystem. He says, “Sebi’s new regulation will definitely have a rippling effect on the Finfluencer and will have a significant impact on the financial landscape. I do foresee some disruption at the initial phase but it is definitely a positive step towards protecting investors and fostering a more responsible financial ecosystem.”
“The new regulations will be challenging for some influencers, but it is also an opportunity for them to adapt their content and collaborate with the right financial platforms thereby providing accurate, trustworthy and transparent information which will empower investors to make better informed decisions,” adds Basu.
Discussing what needs to be the next step for finfluencers, Yasin Hamidani says, “In response, finfluencers need to adapt their strategies to comply with the new regulations. They should consider obtaining SEBI registration to continue providing financial advice and recommendations legitimately.
This may involve completing necessary certifications and adhering to SEBI’s compliance standards. Finfluencers can also diversify their content by focusing on financial education, general market trends, and personal finance tips that do not constitute specific financial advice, thereby avoiding regulatory issues.”
Hamidani also underscores the importance of transparency in building credibility for finfluencers and advises, “Finfluencers can build credibility by transparently disclosing their qualifications, affiliations, and limitations in their content. Collaborating with registered financial advisors and institutions for educational initiatives, rather than promotional activities, can also help maintain their influence and reputation while ensuring compliance with SEBI regulations.”
Arijit Basu states that compliance with SEBI guidelines will become key to success and survival. He elaborates, “The focus needs to shift from product information to investor education, risk management and financial independence. Finfluencers will definitely have their task cut out as they have to create reliable trustworthy content which factors in SEBI guidelines and not resort to fancy graphics and false promises.”
Meenakshi Gambhir points out, “Those who adapt by seeking proper registration and focusing on educational content will not only comply with the regulations but also build greater credibility and trust with their audience.”
Highlighting a pivotal shift for the finfluencer community in light of SEBI’s new regulations, Gambhir, Basu and Hamidani stress on the importance of building trust, transparency and credibility to create reliable content factoring in SEBI guidelines and ensuring compliance with their regulations.