Unregistered Finfluencers Face Action As They're Not Qualified To Give Advice, Says Ex-SEBI Official

The Securities and Exchange Board of India has, in recent period, taking stringent measures to crack down on unregistered financial influencers that have misled investors. RS Loona, former executive director at the market regulator, told NDTV Profit that the action against finfluencers is primarily "because they were not qualified to give financial advice."

Loona is also of the opinion that since SEBI has its limit to such regulations, the social media platforms themselves have to enforce regulatory policies on these finfluencers.

Pranjal Kamra, a SEBI-registered financial influencer along with Harshvardhan Roongta, certified financial planner at Roongta Securities, agreed with Loona over SEBI's strategy and actions. Roongta, however, expressed doubt on whether social media platforms will be able to execute regulations regarding financial advisors.

The onus of being careful with whom to trust and abide by falls to the investor, as per Roongta, as he urged people to make use of their common sense. He advised investors not to take social media as the only source of information and instead to just treat it as a starting point.

One way of spotting who among the finfluencers might be misleading, according to Pranjal, is to be careful of "the people who are trying to sound like messiahs" since they always have ulterior motives.

Another way, according to Harshvardhan, is to understand what's at stake for the person giving advice on the video. "How much time does it take for them to shut shop and go offline?"

Kamra also lauded SEBI's approach to curbing the rise of fraudulent fin-fluencers by freezing their bank accounts so that they cannot earn from illegal activities.