ASCI’s revised guidelines for finfluencers: All your questions answered

The Advertising Standards Council of India (ASCI) on Thursday revised its influencer advertising guidelines to increase the accountability of finance influencers. The move comes even as financial influencers, called ‘finfluencers’, continue to remain under the scanner of market regulator Securities and Exchange Board of India (Sebi) for rampant violations of disclosure guidelines, among others.

The guidelines, first introduced in May 2021, aim to help consumers identify promotional content and make informed decisions on products or services.

What changes now?

Now, financial influencers operating within the banking, financial services and insurance (BFSI) space can offer investment-related advice only after registering with Sebi.

Moreover, the registration number of influencers has to be prominently displayed alongside their name and qualifications.

Influencers who provide other financial advice must also possess appropriate credentials such as a licence from the Insurance Regulatory and Development Authority of India (IRDAI), a chartered accountancy degree, or a company secretaryship, among others.

What are the disclosures required?
“Influencers are expected to adhere to all disclosure prerequisites as stipulated by financial sector regulators from time to time,” the ad industry self-regulatory body said in a press note.

The advertising body reiterated that disclosures are a must even if the evaluations are “unbiased”, so long as there is a material connection between the advertiser and the influencer.

Further, influencers will have to produce proof of their qualifications and certifications if sought by ASCI.

Where should the qualification/certification disclosures be placed?
The amended guidelines specify how to disclose qualifications/certifications for different media. For videos, they have to be superimposed on visuals or stated in opening remarks.

For text-based content, they should be stated at the top, before the post itself begins. In the case of audio and podcasts, qualifications have to come in at the start of ad content.

Labels permitted to disclose ads

• Advertisement
• Ad
• Sponsored
• Collaboration
• Partnership
• Employee
• Free gift
• ‘Paid Partnership’ tag on Instagram
• Affiliate
• ‘Includes Paid Promotion’ tag on YouTube

‘One size fits all approach dangerous’
“As losses to consumers could be substantial and serious due to improper advice in the categories of health and finance, it is necessary that influencers in these two critical categories are qualified to provide advice and that these qualifications are stated upfront, whenever they put out such advertising posts,” said Manisha Kapoor, CEO and Secretary General, ASCI.

Kapoor added that a “one size fits all” approach can be dangerous in these areas and “consumers should only follow the advice of qualified experts when engaging with brands or products in these categories.”

What does Sebi say?
For now, Sebi wants regulated entities such as brokers, mutual funds and exchanges to stop dealing with unregistered influencers.

After a board meeting in late June, Sebi chairperson Madhabi Puri Buch said a discussion paper to regulate financial influencers would be released in the next couple of months.

“It is not our intention to regulate everybody who teaches people about investing. But if you are giving advice, stock recommendations, portfolio recommendations…, you need to be registered with us. That’s already a part of our law,” the Sebi chief had said.