These first-time investors have been helped along by content creators andon social media platforms, including Google-ownedand Facebook-owned Instagram, who are teaching the mostly under-30s audience the basics of investment—for instance, how to read a draft red herring prospectus (DRHP).
The retail investor influx has caused a surge in creators in the financial services space—albeit some with insufficient financial education or experience—in the past year, according to two leading influencer marketing firms.
These financial content creators are arriving in droves, attracted by big paid gigs.
The online brokerage sector clocked 30% more funding in 2020 compared to 2019, and 2021 so far has already surpassed 2019 levels in total investments, according to industry tracker Tracxn. Online brokerage, backed by New York-based investment firm Tiger Global, hasin the space.
Significant venture capital inflow and heightened interest among Gen Z about capital market investments have caused a surge in the number of financial content creators.
“The financial segment is a very tricky space. It is growing rapidly and convincing the youth to begin their investment portfolio,” said Aditya Gurwara, managing partner at Qoruz. “How good or bad the advice purely depends on the creator.”
Affiliate networks and earnings
Online brokerages and creators have formed a convenient, win-win arrangement in the form of affiliate networks, which according to several creators and industry insiders could turn out to be problematic as they provide incentives to creators to encourage repeat trades that may be to the detriment of retail investors.
Affiliate partnerships could take the form of a harmless link in the description box of a video — on YouTube or Instagram Reels explaining financial concepts – which direct the viewer to open their demat accounts on online brokerages such as,or Groww.
The affiliate arrangement can also be rewarding for a creator if they end up getting more users to sign up through their links.
The stock brokerage firm registers the person assisting in service or the referral agent as an ‘Authorised Person’ on a stock exchange. The entry barrier to becoming an AP is fairly low and most of the compliances are managed at the broker end, according to Prem Choudhary, head of legal and compliance at Times Internet-owned ET Money.
Times Internet is part of the Times Group, which also publishes this website.
Zerodha and Groww declined to comment on their affiliate network programmes.
Each time a user clicks on the link and makes a trade, influencers can get up to 40% of the brokerage charge, a financial content creator who is part of an affiliate network told ET on condition of anonymity.
“If you are an LIC agent, would you appreciate a lumpsum payment when a person buys a policy, or would you prefer to get a chunk each time the person pays a premium?” asks popular financial content creator Rachana Ranade, a chartered accountant who has 2.44 million subscribers on her YouTube channel.
“It is a passive source of income for a financial YouTuber,” Ranade, who is associated with both Zerodha and Upstox, says.
Ranade, however, stays away from pushing intraday trades and says affiliate earnings are not a big portion of her income.
A creator or influencer who is a part of an affiliate network is given incentives to promote trades.
Creators whose content revolves around Futures and Options trades or intraday trades end up earning more commission, as their viewers may be encouraged to undertake such trades.
Some of these creators earn up to Rs 1 crore a month, a fintech entrepreneur and creator said.
Raj Shamani, who has about a million followers on Instagram and posts videos on financial independence, says he prefers to stay away from affiliate programmes, although he calls it a “win-win” situation for those who do.
“If I have an affiliation, my whole objective in life becomes about pushing trades,” Shamani says. “I would want more people to swipe and make trades and my content will shift from a narrative-driven approach to becoming a sleazy salesperson. A lot of people do it and it is a sweet deal for brands.”
Since consumer trust is key in this industry, an influencer has become a shortcut that has worked for fintech firms.
Big money allure
Financial content creators have become the go-to source of advice for the “Do-It-Yourself” younger generation, industry experts say, made possible by a serendipitous encounter between money and a social media feature.
Instagram’s launch of short-video Reels and its algorithm – which promoted Reels content over others — have helped creators garner a huge audience quickly in the last year. This came providentially at a time when capital-rich fintech firms were willing to throw money on content creators.
The need to simplify financial concepts drove Ashna Tolkar, a 19-year-old business management student, to start an Instagram platform – themoneylancer.
“I thought this is the right opportunity to reach out to the audience and let them know about personal finance,” says Tolkar, who has a long-term contract with an online brokerage firm.
Between January and May, the way Reels went viral helped her follower count jump from 1,000 to over 47,000.
Tolkar’s Reels-focussed content on financial concepts like ‘stop-loss limit’ and ‘making profits in a falling market’ are mostly viewed by 18-25-year-olds.
“I don’t give direct investment advice. I simplify concepts that I learn, in an interesting way,” she says about her lack of financial industry experience.
The commercials per influencer vary based on viewership and engagement, but influencers can earn anywhere between Rs 3 lakh to Rs 10 lakh a month, according to Parul Parmar, who has over a decade’s experience managing digital content creators, social media influencers and startups.
Mis-selling a phone or a lifestyle product could cost a customer a few thousand rupees, but in the case of financial products, the creator’s recommendation can impact the financial stability of a household, says Pranjal Kamra, chief executive of a financial advisory firm and a YouTuber with 2.56 million followers.
“There is a huge burden on influencer creators. It depends on them whether they destroy or create someone’s financial life. I see a lot of mis-selling happening through creators now, and that’s because a lot of VC money has come into the fintech sector,” Kamra says.
So, instead of offering up-front advice on buying stocks – which only a Sebi-registered investment advisor can do – creators and fintech companies are taking the education route to attract young clients.
“For a brokerage firm to be sustainable, they have to provide some sort of education to a
ll their users. Otherwise, you’ll get a spike of users but eventually they will start losing money,’ says Prateek Singh, the founder of financial education platform LearnApp.
Paytm Money has launched an in-app video-based wealth community to tap young users interested in investing in capital markets. Though experts were part of the initial launch, the company plans to onboard almost 700 creators this year across India.
Groww has garnered 728,000 subscribers on its YoutTube platform through creator and expert-generated content.
Groww’s educational videos – by popular content creators in various regional languages – on “When to Buy and Sell Stocks” and “How to find undervalued stocks” are often followed by a disclaimer – ‘these are not any recommendations for any funds or stocks and are meant only for educational purposes.’
Zerodha has a Varsity initiative to educate young investors about the stock market. It has an active client base of 3.6 million, as per NSE data available till March 31. Nearly 70% of its client base group is aged between 25 and 35 years.
“Creating brand awareness is the key goal of my exclusive partnership,” a creator said, requesting anonymity. “There is so much competition in the finance world and now it is about cornering the market.”