India’s financial scenario is changing, especially with SEBI (The Securities and Exchange Board of India) stepping in to regulate financial influencers, or “finfluencers.” The goal is simple—ensure investors get reliable, unbiased advice and protect them from misleading information.
SEBI has issued a circular to clarify rules for regulated entities and individuals, aiming to stop illegal advisories posing as stock market education. As a result, many finfluencers are experiencing declining brand deals and overall influence.
This crackdown has caused brand deal rates to drop by 40-60%. Brands are now shifting their focus to long-term financial products and educational content, preferring to collaborate with influencers who offer reliable, risk-free advice on mutual funds, SIPs, and retirement planning. Source: moneycontrol.com
In this article, we’ll explore the impact of SEBI’s regulations on finfluencers and provide guidance on selecting a financial advisor who aligns with your needs.
SEBI’s Crackdown on Finfluencers
Social media has led to the rise of finfluencers—people who share financial advice on platforms like YouTube, Instagram, and Twitter. While some provide useful insights, others, without proper qualifications, may spread misleading information. To protect investors, SEBI wants finfluencers to register and follow set guidelines. It also plans to ban unregistered finfluencers from promoting mutual funds and stockbrokers. Source: moneycontrol.com
SEBI’s Key Restrictions
SEBI has now banned two major activities for unregistered influencers:
- Giving investment advice, directly or indirectly, without SEBI approval.
- Making claims about returns or performance without SEBI authorization.
SEBI’s Rules Impacting Financial Influencers
SEBI Bans Unregistered Investment Advisors | A circular issued on January 29, 2025, bans unregistered individuals from giving investment advice. This step aims to protect investors from misleading information and highlights the need for advice from registered professionals. |
Earlier Restrictions on Unregistered Entities | While an earlier circular on October 22, 2024, had already restricted associations between registered and unregistered entities, this latest update aims to eliminate the practice of unregulated financial advice disguised as stock market education. |
Three-Month Delay on Stock Price Data | According to experts, with SEBI mandating a three-month delay on stock price data, financial influencers who rely on real-time updates may lose relevance. |
Regulatory Measures Aim to Curb Misinformation | These regulatory measures are designed to curb the spread of inaccurate financial advice and ensure investors can access reliable information. Consequently, finfluencers who fail to comply with these guidelines may lose brand partnerships and credibility. |
Decline in Brand Deals and Earnings
Industry experts highlight that brand deals will take a hit since influencers can no longer directly promote mutual funds or specific stocks. This means a drop in both affiliate and promotional income. Many influencers earn a commission of around 2–5% when investors use their referral links, and this revenue stream will likely shrink.
Many followers turn to financial influencers for daily market updates. Without real-time content, engagement is expected to decline. People might not follow them as much as before, leading to fewer brand deals. Traders who depend on real-time updates may feel disconnected, affecting influencer-follower relationships.
Impact on Brand Collaborations
Experts believe that outdated stock prices will impact influencer marketing. Many brands use influencers to attract active traders, and the new regulations disrupt this approach. SEBI’s oversight has led to a cautious approach from brands, reducing the number of deals for financial influencers.
Before these regulations, influencers offering live market updates and stock tips commanded high rates—often ₹1-3 lakh per post. However, SEBI’s clampdown has led to a 40-60% drop in brand deal rates. Source: Moneycontrol
Who Still Commands High Rates?
Finfluencers specializing in cryptocurrency, trading, or high-level financial planning still earn premium rates, ranging between ₹3 lakh and ₹12 lakh per collaboration. Experts also highlight how platform-based pricing varies—macro influencers might charge ₹1.5 lakh for an Instagram post, ₹2.5 lakh for a YouTube video, and ₹1 lakh for a Twitter post, depending on engagement levels.
Struggles for Smaller Finfluencers
Micro and mid-tier financial influencers are facing significant challenges. Many have seen their business models collapse due to the new regulations, forcing influencers and brands to rethink their approach. Brands are also reassessing their strategies to stay compliant with SEBI guidelines.
The Numbers Behind the Shift
According to Qoruz data, as of December 2024, India had 232,000 finance influencers. Only 5-10% of them focused on stock-market-related content. That means just 11,000 to 23,000 influencers discussed stocks, many of whom had already adapted to SEBI’s earlier restrictions.
As the influencer marketing landscape evolves, content creators and brands must navigate these new regulations carefully, focusing on compliance and long-term financial education rather than short-term market updates. Source: Moneycontrol
Adapting to New Guidelines
With SEBI’s evolving regulations, many financial influencers have successfully shifted their focus to broader financial literacy topics, such as smart money management, thrift strategies, and saving techniques. This change has also opened new brand collaboration opportunities beyond the stock market.
Exploring New Revenue Streams
According to experts, many financial influencers have started offering paid courses on topics like:
- How to start investing in mutual funds
- How to evaluate a mutual fund or stock
- Step-by-step guides on mutual funds and stocks
Subscription-based courses have emerged as a key monetization model. Additionally, influencers collaborate with asset management companies (AMCs) to conduct financial education sessions, creating valuable learning opportunities while diversifying their revenue streams.
Know More:
SEBI registers investment advisory | Stock investment advisory
The Challenge of Transition
Not all influencers find this transition easy. Many followers rely on financial influencers for daily stock market updates. Their audience mainly consists of traders or active investors. Shifting to broader financial content might reduce engagement and brand deal rates.
A Positive Step for Investor Protection
While financial influencers adjust to these changes, SEBI’s regulations are seen as a much-needed safeguard for retail investors. Experts believe this move will prevent individuals from losing money by following unregistered influencers for stock tips.
This move will promote responsible financial education and allow credible creators to thrive. It will also focus on fact-based, long-term financial education rather than speculative stock tips.
The Importance of Choosing the Right Financial Advisor
With these regulatory changes, seeking financial advice from qualified professionals is more crucial than ever. A competent financial advisor can help you navigate complex financial decisions, plan for your future, and ensure that your investments align with your goals and risk tolerance.
Steps to Select the Right Financial Advisor
Identify Your Financial Goals
Before seeking an advisor, clearly define your financial objectives. Are you planning for retirement, saving for a child’s education, or looking to grow your wealth? Understanding your goals will help you find an advisor whose expertise aligns with your needs.
Verify Credentials and Registration
Ensure the advisor is registered with SEBI as a Registered Investment Advisor (RIA) or holds relevant certifications. Registered advisors must adhere to regulatory standards, providing an added layer of security for investors. moneycontrol.com
Understand the Advisor’s Fee Structure
Financial advisors may charge fees in various ways, including:
Fee-Only:
A flat fee or hourly rate for their services.
Commission-Based:
Earnings are based on the financial products they sell.
Fee-Based:
A combination of fees and commissions. Understanding the fee structure is essential to identify potential conflicts of interest and ensure transparency. moneycontrol.com
Assess Experience and Expertise
Look for advisors with a proven financial planning and investment management track record. Experience in handling diverse financial situations can be invaluable. Don’t hesitate to ask for references or case studies demonstrating their expertise.
Evaluate Communication and Compatibility
Effective communication is key to a successful advisor-client relationship. Your advisor should be able to explain complex financial concepts in simple terms and be responsive to your questions. Additionally, ensure that their communication style aligns with your preferences.
Check for Fiduciary Responsibility
Prefer advisors who operate under a fiduciary duty, meaning they are legally obligated to act in your best interest. This ensures that the advice you receive is unbiased and focused on your financial well-being.
Seek Transparency and Disclosure
A trustworthy advisor will be transparent about their investment strategies, potential risks, and any affiliations that might influence their recommendations. Full disclosure helps build trust and allows you to make informed decisions.
Consider the Advisor’s Approach to Financial Planning
Understand how the advisor develops financial plans. Do they offer comprehensive planning that covers various aspects of your financial life, or do they focus solely on investments? Ensure that their approach aligns with your expectations and needs.
Review Client Testimonials and Reviews
Seek feedback from current or former clients to gauge the advisor’s reliability and effectiveness. Online reviews and testimonials can provide insights into the advisor’s reputation and client satisfaction.
Conclusion
SEBI’s recent actions to regulate finfluencers highlight the importance of obtaining financial advice from qualified and trustworthy sources. By following the steps outlined above, you can select a financial advisor who meets regulatory standards and aligns with your personal financial goals.
Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.
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FAQs
What prompted SEBI’s action?
SEBI’s crackdown on finfluencers stems from concerns about misleading financial advice and market manipulation. Paid promotions of stocks without proper disclosures or qualifications were rampant, leading to investor losses. This action aims to protect investors and maintain market integrity.
How are brand deals affected?
Finfluencers’ brand deals, particularly those involving stock promotions, are expected to decline significantly. Companies will be wary of associating with individuals facing SEBI scrutiny. This reduces finfluencers’ income streams and changes influencer marketing dynamics in the financial sector.
What are the live stock price restrictions?
SEBI restricts finfluencers from providing live stock price updates or recommendations during their promotional content. This measure aims to curb real-time market manipulation and prevent investors from making impulsive decisions based on potentially biased information.
Who is considered a “fininfluencer”?
SEBI’s definition of a finfluencer broadly covers anyone providing financial advice or commentary on social media platforms, regardless of their follower count. This includes registered advisors and unregistered individuals offering opinions on stocks, investments, or market trends.
What are the potential consequences for influencers?
Finfluencers violating SEBI regulations could face penalties, including fines, bans from the securities market, and even legal action. Brands collaborating with such individuals may also face reputational damage. Increased regulatory oversight is expected in the finfluencer marketing space.
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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.