FINANCIAL influencers (or “finfluencers”) made the news here recently when two of them posted comments that sparked a flurry of withdrawals from financial platform Chocolate Finance, leading the company to halt instant withdrawals.
The incident was highlighted in Parliament in April when Sengkang GRC Member of Parliament He Ting Ru filed a question on the matter. The Workers’ Party MP asked about safeguards for the public against financial advice from non-licensed individuals, and whether there has been a rise in complaints against finfluencers.
In response, Alvin Tan, Minister of State (Trade and Industry) clarified that finfluencers providing advice “must be regulated under the Financial Advisers Act and must first be appointed as a representative by a licensed financial advisory firm”.
Even if finfluencers are not providing financial advice, they may be liable for an offence under the Securities and Futures Act if they make false or misleading statements on any capital markets products, said Tan, who is also a member of the Monetary Authority of Singapore (MAS) board.
He noted that there have been eight complaints against finfluencers so far this year, up from an average of five complaints a year in the last five years. Most of the complaints this year relate to the Chocolate Finance episode, he said.
To the average person, five or eight complaints a year may seem relatively low for now. But given the relentless rise of social media in tandem with rapid changes in how people consume news and advice, the power of finfluencers is likely to grow.
How can investors better navigate these trends and make better, more informed investment decisions? For regulators, what are some areas to note to help them better understand retail investors’ preferences and behaviours, and to manage finfluencers?
In this regard, CFA Institute published a report, Clicks and Credibility: Understanding Finfluencers’ Role in Investment Decisions in March 2025. While the report was based largely on data from India, there are some interesting and important lessons relevant to the Singapore market and useful for retail investors here.
The report, which included a survey of 1,615 investors and content analysis of 51 influencers in India, reveals critical insights into retail investor behaviour, content practices of finfluencers, and actionable recommendations.
India’s capital markets regulator SEBI (Securities & Exchange Board of India) defines finfluencers as individuals who provide information on financial topics such as stock investment, personal finance, banking, insurance, and real estate through social media platforms such as Instagram, Facebook, YouTube, LinkedIn, and X. While the exact number of finfluencers in India is difficult to gauge, estimates indicate that there are over 3.5 million social media influencers, with a significant portion focusing on financial content.
Like MAS, SEBI too recognises the role that influencers play in promoting financial literacy. However, the Indian regulator is also keenly aware of the misinformation and misleading advice that often accompanies this rising trend.
Over the past year, SEBI has been particularly active in enforcement, issuing orders for content removal, imposing bans, and levying hefty penalties in cases involving misconduct.
Significant impact of finfluencers
More than eight in 10 (82 per cent) followers of Indian finfluencers reported making investments based on their advice, with seven in 10 among them claiming to have notched profits. However, the CFA Institute report cautions that such a rosy result could have been achieved on the back of positive Indian stock market performance over the last few years, where broader market indices have performed well, and trends such as the superior performance of small and mid-cap stocks compared to large caps. In addition, followers who have been duped could have been unwilling to admit that they have been cheated.
Lack of disclosures and risk warnings
According to the study, more than 6 in 10 (63 per cent) finfluencers fail to adequately disclose sponsorships or financial affiliations. This is a concern and reflects poorly on whether sufficient disclosure is made regarding conflicts of interest. In addition, while only 2 per cent of finfluencers are SEBI-registered, 33 per cent provide explicit stock recommendations, according to the report.
So how can retail investors better protect themselves amid the proliferation of online advice?
The CFA Institute report recommends the following:
Verify licensing status: Always seek financial advice only from influencers registered with your local regulator. Verify their representative number and credentials to ensure they are authorised to provide investment recommendations. This step helps maintain regulatory accountability and adherence to ethical and professional standards.
Assess risk disclosures: Licensed professionals must disclose the risks associated with investments and provide accurate, unbiased information. Avoid influencers who fail to provide proper risk warnings or disclaimers. Independently verify claims and carefully assess the suitability of recommendations based on your financial goals – especially when dealing with high-risk financial products.
Differentiate between educational and promotional content: Investors must distinguish between educational material, general market awareness, and direct investment recommendations. If an influencer is engaged solely in financial education, they must not give direct or indirect investment advice unless they are a registered adviser. Be particularly cautious of influencers presenting investment recommendations under the guise of educational content or financial awareness. For instance, SEBI has recently mandated that individuals engaged purely in education cannot use past three-month market price data to imply future stock performance or make investment recommendations.
Scrutinise promotional content: Be wary of promotional content that lacks transparency regarding financial incentives, sponsorships, or affiliations. In Singapore, MAS expects financial institutions which employ finfluencers to advertise their products or services, to ensure that the finfluencers present information in a clear and balanced format that highlights key features and risks.
Do more homework: Before acting on any stock recommendations from finfluencers, retail investors should still independently conduct thorough due diligence. Keep in mind that licensed finfluencers are required to disclose any conflicts of interest and promote transparency. Stay vigilant against unverified stock tips and be cautious of manipulative practices such “pump and dump” schemes. In a “pump and dump” scheme, fraudsters typically spread false or misleading information to create a buying frenzy that will “pump” up the price of a stock, allowing them to then “dump” shares of the stock at the inflated price.
Too good to be true? Probably: Finally, be wary of unrealistic claims. Exercise caution with finfluencers who promise guaranteed or exaggerated returns. Ensure that the information you rely on is accurate, credible and aligned with your financial goals and risk appetite. Always prioritise licensed entities and approach online financial content with prudence and scepticism.
The full report by CFA Institute can be found here: https://rpc.cfainstitute.org/research/surveys/2025/clicks-and-credibility