In the dynamic world of digital marketing, the emergence of financial influencers, colloquially termed "finfluencers," has reshaped the landscape of personal finance discussions. These individuals, often equipped with considerable social media followings, play a pivotal role in disseminating financial advice, investment insights, and endorsing various financial products. However, with great influence comes great responsibility, and regulatory bodies such as SEBI (Securities and Exchange Board of India) and ASCI (Advertising Standards Council of India) have stepped in to ensure ethical practices and protect consumers. This article explores the guidelines set forth by SEBI and ASCI for finfluencers, with a specific focus on the context of the curative survey scam in Jammu and Kashmir.

The Rise of Finfluencers

In an era dominated by social media, the traditional methods of financial education and product promotion has changed significantly. Finfluencers, armed with financial acumen and a knack for engaging content, have gained prominence as go-to sources for financial advice. Their recommendations on investments, savings strategies, and financial products hold weight, influencing the decisions of a vast and diverse audience.
However, as the influence of finfluencers continues to grow, concerns arise about the transparency of their endorsements, the accuracy of the information shared, and the potential impact on vulnerable populations, such as those in regions susceptible to scams like the curative survey fraud in Jammu and Kashmir.

The Curative Survey Scam

Jammu and Kashmir, with its unique socio-economic challenges and cultural nuances, has unfortunately been susceptible to various scams, including the infamous curative survey fraud where several social media influencers promoted its products promising customers huge returns on investments. This scam often preys on individuals seeking better opportunities and a path to prosperity, exploiting their aspirations and vulnerabilities.
In the context of the curative survey scam, the emergence of finfluencers presents both opportunities and challenges. While these influencers can be instrumental in disseminating genuine financial education, there is a risk of their platforms being exploited by fraudulent actors or inadvertently contributing to misleading financial practices.

SEBI and ASCI Guidelines for Finfluencers

In a bid to safeguard consumer interests, the Advertising Standards Council of India (ASCI) has tightened its guidelines for finfluencers that they can now offer investment-related advice only after being registered with the Securities and Exchange Board of India (SEBI). They should prominently display their registration number alongside their name and qualifications. The inaccurate and deceptive advertising content in categories such as banking, financial services, and insurance can significantly impact consumers’ financial security. Further, ASCI has also revised its guidelines for influencers that endorse products that make claims on health and nutrition. It has been said that such influencers must hold relevant qualifications such as medical degrees or certifications in nursing, nutrition, dietetics, physiotherapy, or psychology.
In May 2023, SEBI barred P.R. Sundar, a top finfluencer with over a million followers on YouTube, from the securities market for a year for allegedly providing advisory services like daily stock investment and trading calls without the requisite registration. It directed him to disgorge the fees that he had charged, along with interest, which amounted to a little over Rs 6 crore. So far, the regulator has passed nearly a dozen orders against alleged violators. While banning most of them from the securities market for a specified period, the regulator has also ordered the wrongdoers to refund all the money collected as fees from investors. More recently, the watchdog issued a consultation paper in which it proposed restricting the association of SEBI-registered intermediaries and regulated entities with unregistered finfluencers. Interestingly, the regulator has also reached out to content creator platforms that offer influencers back-end support like community management and monetisation. The regulator has asked such platforms to ensure that they allow only registered financial influencers, and the effect is already visible.

Educating the Public: A Collaborative Effort

To combat scams effectively, including those related to financial products, a collaborative effort is required. Finfluencers, being influential voices in the financial domain, can play a pivotal role in this endeavor by not only promoting financial products responsibly but also actively engaging in public education and awareness initiatives. Finfluencers should emphasize the importance of responsible and informed investment decisions. Encouraging thorough research, seeking professional advice, and understanding the associated risks should be integral to their messaging. Finfluencers can leverage their platforms to create awareness about prevalent scams, such as the curative survey fraud. By educating the public about common scam tactics, finfluencers contribute to a more vigilant and informed audience. Collaboration between finfluencers and regulatory bodies, such as SEBI and ASCI, is vital. This can involve disseminating official guidelines, participating in awareness campaigns, and fostering a culture of compliance. In addition to promoting specific financial products, finfluencers should actively contribute to improving financial literacy. Explaining basic financial concepts, budgeting, and the importance of long-term financial planning can empower their audience.

The Way Forward

As finfluencers continue to shape financial conversations and influence consumer decisions, the need for ethical conduct, responsibility, and transparency becomes paramount. Regulatory guidelines from bodies like SEBI and ASCI serve as crucial frameworks to ensure that the influence wielded by finfluencers aligns with the principles of fair practices, consumer protection, and the integrity of financial markets.
In the context of Jammu and Kashmir, where residents may have experienced the repercussions of scams like the curative survey fraud, the role of finfluencers becomes even more critical. It is incumbent upon finfluencers, brands, and regulatory bodies to work collaboratively to foster a climate of transparency, trust, and responsible financial practices. In conclusion, as the financial landscape continues to evolve, the collaboration between finfluencers, regulatory bodies

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