Creator Economy Summit: Financial content is good for market; it should be regulated but not banned, say experts

How does one make responsible financial advice, such as tax saving or good insurance, more exciting compared to something like crypto or broking? Sharan Hegde, CEO, 1% Club and a popular content creator was talking about one of the biggest challenges in creating financial content.

For success in the field of content creation, Hegde said that influencers or content creators need to go deep into their understanding of the fintech product they want to talk about, make the right connects and work really hard.

This discussion was part of a panel discussion on regulation in the space at Moneycontrol's Creator Economy Summit. The panel was looking at regulations within the space of 'finfluencing'.

The regulation of financial advice from influencers has been a hot topic of discussion over the last few months with many influencers coming under the scanner for promising assured returns. In a recent case of SEBI crackdown, the regulator banned a finfluencer who went by the name Baap of Chart for making stock recommendations under the guise of financial education. SEBI's investment advisor regulations say that anyone providing financial advice needs to be registered.

"My heart goes out to the community (finfluencer) because they are making education accessible like never before," said Prabhakar Tiwari, Chief Growth Officer, Angel One, but added that at the end of the day, their interest and focus should be on investor protection. "One needs to understand that like with every other choice or decision taken, trading also has its share of risk, hence there is a need for well-researched investor education coming through influencers/content creators," he said.

ASCI's Manisha Kapoor added that at the end of the day, there is a need for more accountability. "I think the risk is real. Both health and wealth are important. It is important that the more established players start demanding more from their peers, " Kapoor said.

While there is a need for education, concerns creep up when content breaches the line of free speech and expression. "Everyone has the right to freedom of expression. The problem is when the content isn't created in the interest of the end user," Anil Choudhary, Partner, Finsec Law Advisors added. If the right content is served, in a simple format. It will be good for the market. Content should be regulated but not banned, he said.

As a part of the solution, Tiwari says that there is a need to talk about paid advertising, licensing and digital public good. "Can there be a public good, an infrastructure where various stakeholders can report bad elements? We monetise investors through their lifecycle so we can't let their finger burn for a few trades," said Tiwari, adding that Angel One has a compliance team in place with fraud detection and digital hygiene unit where they scan not only for finfluencers but other partners who are selling content in their name.

While SEBI is stepping in to take action and regulate the space, Choudhary added that SEBI cannot regulate every single piece of content, The need, he said, is for regulation to be segmented, with more oversight over people with a larger following like those with over one million followers.