This is why you should never trust finfluencers!

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On social media, you will see hundreds of finfluencers and their millions of followers. These finfluencers claim that they would help you earn lakhs-crores of rupees in shares and derivatives. They lure people by showing fake screenshots that they have earned lakhs in shares and derivatives. They show their luxurious lifestyle. They mislead people by either giving online or offline courses or selling passes to their premium telegram channels.

Even though people’s financial literacy may increase a bit if they buy these courses, But, the tips from finfluencers hardly benefit them. On the contrary, many people have suffered a lot of losses. According to reports, a commerce student living in Jharkhand bought a pass for such a telegram channel. After that, whatever investments he made on the advice of the finfluencer, he did not make any profit, on the contrary, he had to bear losses. Later it was found, that the finfluencer whose advice he was investing on, himself had suffered a loss of more than 1 crore rupees in derivatives trading.

This finfluencer also used fake screenshots that displayed that he had made profits. This offcourse he did to mislead people. He thus influenced them to join his paid courses and his telegram channels. Similarly, many finfluencers also post fake stock trading videos on social media. They claim to make a profit in the video, but actually they hide losses that they make. They advise people to buy and sell shares without any analysis. Trading apps also contribute to the growing business of these finfluencers, they get commissions for promoting affiliated links.

Market regulator SEBI has made a law. The regulator has said that finfluencers are not research analysts, they cannot give any tips on any stock. SEBI has started taking action against such unregistered entities who give advice related to buying and selling of shares. But after SEBI’s action, finfluencers have started playing with words like instead of ‘buy’ and ‘sale’ they have started using words like ’support’ and ‘resistance’. Now they are indirectly giving advice. Recently, SEBI has also presented a consultation paper in which it has proposed to stop finfluencers from establishing any connection with registered intermediaries or regulated entities. The aim is to disrupt the revenue model of such finfluencers. Stakeholders have been asked to respond to the proposals by September 15.

Finfluencers claim that they will clear your concept in two to three days but understanding the market in two-three days does not seem logical. Yes, it is necessary that you read for clearing your concept on the market. Big experts increase their knowledge by reading books. So if you want good knowledge about investment and trading then you will also have to read for it. If you are new and want to enter the market then it is not necessary that you follow a finfluencer. The content on YouTube can be quite technical, so you will also have trouble understanding it. You can watch YouTube channels of Sebi registered entities…So stay awake and do not trust anyone blindly.