A word of caution is important: FM Sitharaman on financial influencers

Union Finance Minister Nirmala Sitharaman said on Sunday during an interactive session in Karnataka that there is no proposal to regulate social and financial influencers, but that extreme caution is required.

She was responding to a question about how many people use social media, where financial influencers have replaced traditional financial experts. She was asked if there were any discussions about regulating financial influencers.

“At this stage, I am not having any proposal before me for regulating them, but just a word of caution is important. If there are three or four people giving us very objective good advice, there are seven others out of 10 who are probably driven by some other considerations,” she said.

“There’re many ponzi apps on which we’re working with concerned ministry & RBI & clamping down on them like never before,” she said.

Social and financial influencers abound, but each of us must exercise extreme caution to ensure that we double-check, counter-check, and do not rush into anything in order to protect our hard-earned money, she added.

Earlier this year, in March, the Department of Consumer Affairs issued a set of guidelines for social media celebrities, influencers, and virtual influencers. The guidelines were designed to ensure that people do not mislead their audiences when endorsing products or services.

According to the guidelines, endorsements must be made in simple, clear language, and terms such as “advertisement,” “sponsored,” “collaboration,” or “paid promotion” may be used. Individuals must not endorse any product or service that they have not personally used or experienced, or for which they have not performed due diligence.