Only 2% of finfluencers are SEBI-registered, yet 33% recommend stocks: CFA Report

New Delhi: A new report by the CFA Institute highlights growing concerns over financial influencers, revealing that only 2% are SEBI-registered, yet 33% offer explicit stock recommendations.

Titled "Clicks and Credibility: Understanding Finfluencers’ Role in Investment Decisions," the report finds that 63% of influencers fail to disclose sponsorships or financial affiliations, raising concerns about transparency and potential conflicts of interest.

“This confirms the regulator’s fears that many finfluencers dispense financial advice without proper authority or accountability,” the report states.

The study also reveals that while 8% of followers admit to being misled by finfluencer advice, the risk is higher for those over 40, with 14% reporting fraud or misinformation. However, the actual number could be higher due to underreporting, as many investors hesitate to acknowledge financial losses.

Despite these risks, financial influencers hold significant sway—82% of their followers have made investment decisions based on their advice, with 72% claiming to have profited. The report suggests that these gains may be influenced by recent strong market performance, particularly the rise of small- and mid-cap stocks.

The finfluencer landscape is also notably young and male-dominated, with an average age of 31 and 60% under 29. While brand partnerships are common—59% of influencers have had at least one sponsorship—many fail to disclose these affiliations, further complicating trust in the space.

As concerns grow over unregulated financial advice, the report underscores the urgent need for greater accountability and transparency in influencer-driven investment guidance.