Only 2% of finfluencers are Sebi-registered. Can you trust the rest?

“This stock will make you rich!” “Invest ₹10,000 today and turn it into ₹1 lakh!” If you’ve scrolled through Instagram or YouTube, you’ve likely come across such bold claims from financial influencers or ‘finfluencers’.

They promise riches, financial freedom, and market secrets—all in under a minute. But behind the flashy thumbnails and viral videos, how much of this investment advice is actually credible?

A new report by the CFA Institute exposes the risks, misinformation, and hidden agendas shaping India’s growing influencer economy as millions turn to social media for financial guidance.

Also read: Meet the new finfluencers: How broking firms are rewriting the content playbook

The March 2025 report reveals an eye-opening reality: 82% of investors influenced by social media have acted on advice from finfluencers, and 72% of them reported making profits.

However, only 2% of these influencers are Sebi-registered, raising serious concerns about misinformation and regulatory oversight. Even worse, 8% of investors reported being misled or scammed, a figure that doubles to 14% for those over 40.

The question is no longer if finfluencers shape financial decisions, but whether they can be trusted to do so responsibly?

What makes finfluencers so appealing?

Finfluencers, have gained massive following by making investing look easy, engaging, and even entertaining. In the race for views and likes, the line between genuine financial education and marketing hype is increasingly blurred.

Investors are drawn to finfluencers for various reasons—68% appreciate their ability to simplify complex topics, 64% trust them for their personal investment experiences, 60% believe they are honest and transparent, and 51% actively follow their recommendations.

However, this growing trust comes with significant risks. Many investors fail to verify whether these influencers are Sebi-registered, exposing themselves to misinformation, hidden sponsorships, and potential fraud. As financial content continues to flood social media, distinguishing credible advice from promotional gimmicks has never been more crucial.

Misinformation and hidden agendas

The CFA Institute’s analysis of 51 major Indian finfluencers raised some serious concerns.

A staggering 33% of them provide explicit stock recommendations, even though most lack formal financial credentials. More concerning is the fact that 63% of influencers fail to disclose sponsorships or financial affiliations—meaning their followers may unknowingly be acting on paid promotions rather than unbiased advice.

Another key issue is the lack of transparency in investment content. Only 29% of influencers mention key investment norms, such as fees, tax implications, or lock-in periods. This means that many investors might not be aware of the risks involved before making financial decisions.

Additionally, “pump-and-dump” schemes—where influencers promote certain stocks to drive prices up before exiting their own positions—are becoming increasingly common. Sebi has been stepping up regulatory action, banning unregistered influencers from making direct investment recommendations and imposing stricter disclosure requirements.

How can investors protect themselves?

To navigate the risks of unverified financial advice, the CFA Institute urges investors to be cautious and well-informed when using social media for investment decisions. While finfluencers can offer insights, it’s crucial to distinguish genuine financial education from promotional content.

The first step is verifying Sebi registration, as only Sebi-registered investment advisors (RIAs) and analysts can legally provide direct investment recommendations. Investors should also check for full disclosures—if an influencer benefits from sponsorships, affiliate deals, or paid promotions, this must be transparent.

Despite the ease of social media, sound investment decisions require due diligence. While 59% of investors rely on personal research, 51% follow market trends, and 46% take advice from peers, it’s vital to cross-check claims, consult credible sources, and seek professional guidance.

Also read: Meet the new YouTube finfluencers – teenagers trading options ‘making 36-40%’

Above all, beware of ‘get-rich-quick’ promises. High returns with minimal risk are red flags. Instead of chasing unrealistic gains, investors should prioritise long-term planning, diversification, and informed decision-making.

The credibility test

The report highlights the need for Sebi to enforce stricter registration and monitoring of growing financial influencers, ensuring that only qualified professionals provide investment advice. Without proper oversight, the risk of misinformation, hidden sponsorships, and market manipulation continues to grow.

One of the key recommendations of the report is making Sebi registration mandatory for all finfluencers offering investment advice. This would ensure that only those with the right credentials and regulatory oversight can influence retail investors’ decisions.

Additionally, clear and standardised disclosure rules should be introduced for brand sponsorships and financial affiliations, making it easier for followers to distinguish between genuine recommendations and paid promotions.

Apart from registration and disclosure, the report suggests that stronger fraud detection and reporting mechanisms are necessary to curb the spread of misleading investment advice.

Regulators must collaborate with social media platforms to identify and remove fraudulent content before it causes financial harm to investors.

By implementing these measures, Sebi and other regulatory bodies can create a more transparent and responsible ecosystem for financial advice on digital platforms.

Financial influencers have undeniably changed the way Indians approach investing. They have democratised financial knowledge, making it accessible to millions. However, with this accessibility comes a responsibility to ensure that advice is credible, transparent, and well-regulated.

For investors, the key takeaway is simple: Trust, but verify.

While finfluencers can be a great source of financial education, investment decisions should always be based on verified information, sound research, and expert guidance.

Also read: How finance influencers use storytelling to misguide people