Fininfluencers in India

The beginning 

          In the year 2009, when I entered Share Market, Social Media was new and people didn't knew how to use it properly. We mostly relied on Financial Blogs and Websites (apart from Business Channels) for getting information about companies and stocks. Till 2015, only entertainment and tech channels of YouTube were famous. They started getting good audience, brand promotion opportunities and some paid assignments etc. Soon, Educational channels and Motivational channels started making their presence felt. There are only few Finance Youtubers who are left who are still active since 2015. Youtubers of Covid-times have already surpassed number of their followers in a big way e.g. CA Rachana Ranade, CA Ananth Ladha etc. to name a few. They have more followers than actual SEBI registered research analysts who are panelist on the Business News channels but also have their own YouTube channels. 

Covid-time Fininfluencers

         Before Covid, Fininfluencers mostly believed in making videos about Fundamentals of Stocks, Charts of Stocks and outlook of the market. Most of them had very good community engagement and they also shared share tips with their audience to gain their loyalty. But during Covid year, new influencers emerged who mostly taught people how to Invest? Theynever gave any share tips or talked about Market outlook. They focused only on teaching Concepts related to investing and trading in simplified ways. Who would have imagined that Audience which was looking for 'Share Tips' will shift completely to learning the art of investing? Thanks to the powerful content of these new creators; investor community actually started becoming financially literate. 

   The Covid-related panic crash of May 2020 gave very good entry point to new investors. Market valuations went 10 years back due to sharp fall. 7 Crore new demat accounts were opened in India during that period. Big Brokerages firms got defeated by Zerodha, Groww etc. new age companies. Investors made easy money. Their investment got doubled in merely one year time. Liquidity infused by US Govt gave birth to Robinhood Investors. Markets made new highs till Mid of 2021 and these FinInfluencers made most out of this 'market frenzy' by selling their courses, membership and advisory services. SEBI purposely didn't took any action against anyone because New Investors were coming to markets, New SIPs were bringing huge CashFlow in the Markets and most importantly Financial literacy was increasing during that period. We also witnessed that some Exchanges too invited some of these Fininfluencers to give Webinars on their platforms. 

Outbreak of Fininfluenza on various Social Media:

     After watching the Success of  these Fin-Influencers, Business Channels too started inviting them on their TV Channels in various programs. We started seeing Sharan Hegde, Rachana Ranade, Ananth Ladha, Vivek Bajaj etc. on television regularly. These Fin-influencers then started collaborating with each other, they started new Start-ups, got more brands in their kitty and became famous and rich in very short span of time. Other traders who had Technical Analysis Channels didn't reach to TV Studios but they too made good money during Covid-times. Some of the Successful Traders started their Vlogs where they started flashing their new luxury Car purchase, house purchase and so on. Success of these Youtubers, encouraged many Chartered Accountants, Analysts and Finance MBA guys to take YouTube seriously. They created their brand accounts on Twitter, Instagram, Telegram and Facebook etc. all the Social Media platforms and started posting Long Videos as well as Shorts and Stories regularly. Neha Nagar, Akshat Shrivastva etc. are some examples of Fin-Influencers who got good response from people. 

         'How to earn from YouTube?' videos started mentioning 'Investing' as the new hot favorite 'Niche' where YouTubers can get their first 1000 subscribers and 4000 hrs. of watch time faster. More and more people entered the race of becoming Finance Influencers in this niche. Hence I have used the term 'Outbreak of FinInflluenza' for this phenomena where every Tom, Dick and Harry considers himself Market Guru. After the Ban of TikTok in India, Facebook grabbed the opportunity with both the hands. The parent company Meta gave monetization option both on Facebook Pages and Instagram. Google Stories was one more way by which Bloggers started making faster money using their Adsense accounts. New formats demanded Short and crisp videos with highly engaging content. Young Fininfluencers who had followers in 18-30 age group became expert in meeting the demand of this T20 kind of fast format on Social Media. Rest turned their Morcha to Twitter Spaces where they can spread Gyaan for 3-4 hours in stretch. Most of them don't even read regularly and share the same knowledge again and again yet they get 150+ audiences in every Twitter Space they conduct. One of the eminent Bear in the Share Market Sharad Shah has his own followers who believe in his every bearish commentary thanks to his Rs 3000 Crores networth. While others wants to trust and focus on Bulls like Kedia, Sainik who always give some hopes to Bulls. Nowadays TV personalities too started attending such Spaces and giving their views on Sectors and Macroeconomics etc. I have seen Prakash Gaba, Avinash Gorakshkar ,Rajat Bose etc. active in some spaces. 

             Apart from YouTube, Instagram, Twitter, one more platform is used extensively by Fininfluencers and that is - Telegram. Most of them have their own Telegram channels where they post market updates, stocks in news, links of their Youtube videos and their schedules of new webinars or course launches etc. Fake Telegram channels is one of the biggest issue for them as many scamsters try to loot Investors using their names. Interestingly, SEBI is aware of all the activities being carried out by these Fininfluencers but it has no control on Social Media. In the past SEBI has taken strict actions against Indore-based 10-12 companies running Portfolio Management Companies without legal permission. When will we see SEBI taking Strict action against Fininfluencers who give Share Tips, manage portfolios illegally etc. Selling Educational Courses is not a Crime and SEBI can't do anything about it. But Selling Advisory Services without being SEBI registered advisor is strictly not allowed. In the November 2021 circular, SEBI has announced new punishments for such Jholachaap Advisors - 1) 10 Lac penalty 2) One year imprisonment and 3) Lifetime ban from exchanges. I wonder do these FinInfluencers even know this? See, there are many fininfluencers who have CFA/CFP/CA etc. kind of certifications. They can run such services. I have objection against people who don't have any such qualifications to give Financial Advisory and yet they continue to do it just by using a disclaimer - This channel/video is for Educational purpose. 

Future of Fininfluencers

 One fine day, we will hear about a big scam in India by one of the Fininfluencer who is eating more than he/she can chew. Things will go completely out of his/her control and he/she will have no other option than to flee to another country like Dubai. Hundreds of people will lose their Crores of Rupees. That day SEBI will get brutally trolled by the market participants on the Twitter, leading News Papers will ask whether SEBI was sleeping all this time? Then only SEBI will wake up. The November 2021 circular came only after News Channels critized previous NSE head for taking guidance from Himalayan Sadhu for running the organization. It was failure of regulator too. How come they remained unaware of it for so many years?

Coming back to the topic of 'Future of Fininfluencers'; I can clearly say that sooner or later SEBI will take strict actions against such Market Gurus who are conducting activities which aren't legally allowed to them like Advisory, Portfolio Management etc. Genuine people who have legal authority to conduct these services will take full advantage of their fininfluener brands. There will be some cases in which a well reputed fininfluencer will destroy his/her image completely by collaborating with wrong brands/people in the industry. RBI will also interfere and advice SEBI to create some guidelines for the fininfluencers on Social media to protect the investors. With time people will themselves learn how to differentiate between genuine Market Gurus and Jholachaap Furus. Income Tax department will also start monitoring activities of Furus who show their MTM gains/losses openly on Twitter. We have witnessed how argument of P R Sundar with his follower on the same MTM issue, ended up in his infamous 'Most Vulgar Tweet of the Year' comment. It wasn't coincident that SEBI sent notice to him for some of his transactions which happened in his unregistered entity (kind of Money-laundering suspicion).

In the end, I would like to advice to all the readers to understand to be cautious about who they are following on social media. Unsolicited and Free advices can destroy their wealth completely. It's important to learn Investing and Trading from right people at right cost. Avoid paying fees to these 'Online' people blindly.  Do all the due-diligence. Cyber Security in India is in its nascent stage. If your bank accounts get emptied, you won't be able to recover your money without going through tremendous mental stress and frustration. Respect your hard-earned money. Take advices from SEBI registered advisors OR learn to manage your own funds by learning the basics daily. Fininfluencers are becoming richer day by day thanks to their followers. But are the Followers making any Money yet? Ask them.