SEBI registered finfluencers rise but disclosure gaps remain, says CFA

MUMBAI: Not every financial tip comes with the fine print and that’s exactly what has regulators worried. While more financial influencers in India are now registering with SEBI, concerns over opaque disclosures, conflicts of interest and blurred lines between education and investment advice continue to cast a shadow over the rapidly growing finfluencer ecosystem, according to a new report by the CFA Institute.

The report, Clicks and Credibility 2.0: From Influence to Accountability, Disclosures, and Policy Impact, analysed the content and practices of 48 prominent Indian finfluencers to assess how they shape investor behaviour.

It found that the proportion of SEBI-registered finfluencers has risen to 6.3 per cent, up from 2 per cent in the institute’s previous study, suggesting that regulatory compliance is improving, albeit slowly.

However, one statistic remained unchanged. One in three finfluencers (33.3 per cent) continued to provide explicit stock recommendations, underlining the widening disconnect between growing online influence and formal regulatory oversight.

The report also flagged persistent transparency concerns. Around 37.5 per cent of the influencers studied did not adequately disclose conflicts of interest, including paid promotions, sponsorships and affiliate marketing arrangements. In addition, more than a quarter failed to explain key investment considerations such as fees, tax implications and lock-in periods, potentially leaving retail investors without crucial information before making financial decisions.

The study highlights just how influential these creators have become. Instagram emerged as the dominant platform, accounting for nearly half of the total audience tracked in the report, while Instagram and YouTube together represented more than 90 per cent of cumulative follower reach.

The sector is also remarkably young. Half of the 48 finfluencers analysed were 30 years old or younger, with the average age at 32 years. Geographically, 50 per cent were based in Mumbai and Delhi-NCR, while more than 10 per cent operated from outside India, reflecting the increasingly global nature of financial content creation.

The report also found that around 6 per cent of the sampled finfluencers had been publicly linked to disclosure or conduct-related issues, while 4 per cent had faced regulatory penalties from SEBI.

Beyond social media posts, the CFA Institute warned that financial advice is increasingly migrating to private groups, webinars and closed communities, making regulatory oversight significantly more challenging.

To improve accountability, the institute recommended stronger disclosure standards, verification mechanisms for regulated advisers, enhanced monitoring of misleading content, a dedicated finfluencer code of conduct, greater international regulatory cooperation and broader investor-awareness campaigns.

The report also noted that regulators in countries including the United Kingdom, United States, Australia, Singapore and France have been tightening oversight of financial promotions and influencer activity, signalling that scrutiny of digital financial advice is becoming a global trend.

As millions of first-time investors continue entering India’s capital markets, the influence of social media personalities is only growing. The challenge for regulators now is not simply ensuring that financial advice reaches wider audiences, but ensuring that credibility keeps pace with clicks.