- Date : 17/02/2023
- Read: 3 mins
Social media, especially Instagram and YouTube, has become a go-to place for millennials to seek advice. But is it a reliable space to get personal finance and investment advice? Let’s find out.
Social media, especially Instagram and YouTube, has become a go-to place for millennials to seek advice. Want to redecorate your home? There are thousands of interior guys dishing out dos and don’ts. Want to learn how to cook healthy foods? Chefs across the world have wise words for you. Facing a tech problem? There are tech gurus galore with a fix for everything. But does the same solution extend to personal finance and investments? Let’s find out.
Social media is swarming with finance influencers or finfluencers, telling you how to be a savvy investor. From how to invest in stocks and leverage the best mutual funds to how to enjoy tax benefits and more, these finfluencers are fast gaining popularity, with millions of followers hooked on to their every word. The million-dollar question is, should you trust a finance influencer with your hard-earned money?
While many of these finfluencers may be finance professionals, such as chartered accountants, banking professionals or chartered financial analysts, they may not necessarily be officially registered or SEBI-registered advisors. This is why the regulatory body Securities and Exchange Board of India (SEBI) announced in December 2022 that it is planning to set up a framework to identify these financial influencers. It is also setting up a set of SEBI regulations that it will issue to these financial advisers.
Personal research is the key
It is vital to be prudent with your money and allocate it wisely. Before following any advisor, you should do a background check on them -- check if they are credible, what is their educational background, how much relevant work experience they have, what kind of investment advice they give, are they being paid to promote a certain financial product, and more. There is no harm in building your financial awareness from their content and borrowing inspiration to start saving actively, but your financial decisions should not be based only on it. It is critical you take their advice as a starting point and conduct thorough research from reputed sources before you deploy your money.
Moreover, it is crucial to note that there is no one fit for all when it comes to investments. These influencers do not offer customised personal finance solutions. You must use your personal research to figure out what fits your unique needs.
There is no getting-rich-quick scheme
There are way too many people offering secret formulas of multiplying your money in a matter of days. These are all scams, and you must beware of them. One of the biggest challenges of following financial influencers blindly is that you make yourself vulnerable to fraud. There are numerous cases of influencers being charged for fraud across the globe, who take undue advantage of their followers. Just because someone has a large number of followers does not mean they are experts or trustworthy. This is why you need to conduct personal research and take financial decisions responsibly.
A lot of influencers are genuine, and you should follow their content to educate yourself. However, exercise caution when it comes to investing your money. If you have doubts, it is best to consult a SEBI-approved financial advisor, explain your financial need and risk appetite, and then take informed financial decisions.