An advertisement featuring YouTuber CA Rachna Ranade has stirred a debate on social media putting focus on how authentic financial influencers are. The advertisement in question has angered many from the financial advisory space, especially the registered investment advisors.
The bigger problem with the advertisement is that it features logos of MeITY and India G20 seemingly showcasing an endorsement from the government.
This goes against the Securities and Exchange Board of India’s strict norms against financial influencers doling out investment advice. However, Minister of Information and Technology, Rajeev Chandrashekhar has said that the MeITY logo on the advertisement doesn’t mean endorsement from the government. Rajeev Chandrasekhar, issued a clarification on the ad published on multiple dailies, stating that he has now advised such campaigns to be more careful when they use the government logos.
Registered investment advisors on the other hand have displayed major disappointment with the advertisement while they deal with increased compliance burdens. Members of the Association of Registered Investment Advisors, told CNBC-TV18 that the advertisement is totally anti the SEBI stand against unregistered investment advisors.
"The endorsement gives an impression that finfluencers like CA Rachna are the real experts. Merely tweeting that is not, cannot absolve the government or YouTube of responsibility. On one hand, Registered Investment Advisors, who are qualified to give advise, struggle to survive under the burden of draconian SEBI regulations that restrict almost every aspect of their practice.
On the other, Finfluencers with absolutely zero responsibility towards their audiences are having a merry laugh to the bank. Guess who is suffering the most— the common man who cannot find quality advise at a reasonable price and is now being advised by the government to trust unregistered finfluencers like CA Rachna on a full-page advertisement in a leading daily! This is a huge embarrassment to SEBI. MeITY and SEBI should publish a full page apology to the Public for misinformation and submit that it is a mistake. Nothing less can undo the damage," said an RIA on conditions of anonymity.
However, netizens have not taken the ad nicely. Many twitter users tweeted against it. Here are some examples.
The finfluencer community has been facing backlash after famous
YouTuber PR Sundar was barred by SEBI from the securities market for a year. This was because Sundar indulged in unregistered investment advisory through social media groups. There has been a lot of push for regulating financial influencers and recently, SEBI Chief, Madhabi Puri Buch has hinted that such a move can be in the pipeline.
"The concept of Finfluencers is deeply troubling. While many of them get away by calling themselves 'educationists', a large number freely provide investment advice right in the teeth of SEBI regulations which permit advice only with a license from SEBI. While the regulator has indeed been pursuing many of the finfluencers with penalty orders, the recent seeming endorsement by the government is at odds with cracking down on what is clearly impermissible," said Sandeep Parekh, former member of SEBI.
CNBC TV-18 has reached out to YouTube and Google for a comment on the story.
