In the past few years, social media influencers have hogged the limelight like few others have in the past. They are everywhere. They tell us what brand of shoes to buy, which restaurant to eat at, and also where to invest our money in!
While it’s true that one should do think and spend one’s hard-earned money, the fact is that one could easily end up getting misled by these social media influencers.
One reason for this is that most of these influences do paid promotions, where the brands pay the social influencer money to promote the product. So, if someone is telling you to invest through such and such investing platform because they have the lowest fees, the best stock recommendations, and so on, there are high chances that he/she is doing it for money and you end up getting influenced by the same. Yes, you may find a disclaimer here or some fine print there, but the advertisement and the message is so strong that you are likely to overlook them.
In the last few months, there has been news that the government will lay down rules for social media influencers. Now, those rules are finally here.
These rules include publishing clear disclosures about brand associations so that there is transparency, and consumers are protected. Influencers who fail to comply would face hefty fines going up to Rs 50 lakh, or, in some cases could be even barred from investing in products for up to a period of six years.
Central Consumer Protection Authority (CCPA) chief Nidhi Khare said at a press conference that when there is a “material connection” between an advertiser and a celebrity or influencer,” disclosures will need to be published.
Such guidelines will be applicable to all individuals who have access to an audience, as well as those who have the power to influence audience decisions. Further, the disclosure should be such that they are clear, prominent, and hard to miss.
In case the endorsement is through a picture, it should be superimposed over the picture so that the viewers can notice it. If the endorsement is through a video, it should be placed in the video and not just in the description. In case of a live stream, it should be displayed as a ticker throughout.
These rules are especially important for financial influencers, because as mentioned before, it involves people and their hard-earned money.
This became a talking point after the Singapore-based crypto firm, Vauld shut shop and many investors lost money.
Many financial creators had promoted Vauld, and in the absence of any rules, they were not held accountable.
“I feel macro financial influencers are already doing it and should do it to have better and clear relationships with their subscribers’ families. But at the same time, it is important for fashion or lifestyle people promotion skincare or hair or energy drink products, too, because that is directly impacting the health of people,” says Anant Ladha, a financial planner and social media influencer, and founder – Invest Aaj For Kal.
Anoop Mishra, social media expert and a PR strategist feels that while there must be some checkpoints and barriers, as well as some basic ethics that influencers must follow, policymakers should also make policies to control and eliminate these product manufacturers on the ground level, rather than place the entire responsibility on marketers or influencers.
“Why are we only concerned about social media influencers? If this rule is really required, it should be applicable to everyone, whether they are social media influencers, TV or film celebrities, or social media account holders. In my opinion, this must be left to the viewers’ perceptions, product quality, and buyer’s decision! Anything can go viral on social media today, and it is also proven that no one can claim a set line of practices to succeed two competitive products of different brands in social media marketing!” he adds.
While these rules will make social media influencers disclose brand partnerships more clearly, it is important to understand that one should never make any buying decisions, and especially investment decisions, based on social media influencers and their recommendations. One should always do proper research and consult their financial planner before following any investment or money-related advice.