The news of SEBI crackdown on YouTuber Ravindra Balu Bharti for illegal investment advisory services has come as a reality check for many influencers. These influencers are offering unregistered and more often than not paid investment advice by the vested parties. But financial influencers or Finfluencers, as they say, are not the only influence peddlers that need to be checked. The property influencers, or Propinfluencers, are even greater threat. After all, one invests in stock market with surplus money where amount is much lesser than one’s investment in property that is life’s costliest purchase and mostly with borrowed money. Ravi Sinha questions why there is no regulatory framework for property influencers.
The world of influencers with YouTube is not limited to just financial influencers who are targeting novice investors by providing unregistered investment advice & trade recommendations. The regulatory action by India’s market regulator Securities & Exchange Board of India (SEBI) against YouTuber Ravindra Balu Bharti and his company, Ravindra Bharti Education Institute, for operating an unregistered investment advisory business is a timely reminder for many such blatant illegal advice through social media.
In this case, the SEBI has barred them from participating in the securities market until April 4, 2025, and ordered them to return INR 9.5 crore, the amount earned through their unlawful activities, according to The Times of India report. SEBI’s investigation revealed that Bharti and his company targeted novice investors by providing unregistered investment advice, trade recommendations, and execution services. With a substantial following of 1.9 million subscribers across two YouTube channels, Bharti used his platform to influence his audience into making high-risk investments.
The company promised ‘high returns’ but failed to disclose the accompanying risks while operating without the mandatory SEBI registration. SEBI’s order highlighted that Bharti’s company breached securities regulations and neglected its fiduciary obligation to act in the best interests of its clients.
What the laws says? Advocate Venket Rao of Intygrat Law Firm says there are a number of social media advisors floating around on social media and the regulation doesn’t cover the marketing advisories. The regulation is limited to transactions through the registered real estate borkers. There is no regulation for social media influencers per se like SEBI that could regulate.
SEBI had earlier this year introduced stricter regulations targeting financial influencers to safeguard investors. SEBI has banned brokers, mutual funds, and other regulated entities from associating with unregistered financial influencers for marketing or promotional purposes. This includes financial transactions or client referrals involving these influencers.
But finfluencers engaged exclusively in investor education are exempt from these restrictions, provided they refrain from giving specific investment recommendations or guaranteeing returns. Finfluencers offering advice or recommendations on securities must register with SEBI.
That is all about Finfluencers. What about the Propinfluencers? Who are these influencers of property market? Are they journalists? Are they neutral content creators? Or is it just a case of brokers gaining internet celebrity as real estate influencers. Who will differentiate that? For me, a real estate influencer is one could only educate the buyers about various nuances of property market; acts as a source of due diligence; and specializes in identifying hidden assets and undervalued real estate opportunities.
But the kind of Propinfluencers that I find on YouTube makes me wonder whether ther is any guideline, forget about the regulation. They are collaborating with builders to promote projects that have serious legal issues or have been delayed for years. The opinion expressed are mostly one-sided and biased; the project being reviewed are so highly glorified that it would make the seasoned marketeers ashamed.
Some of these influencers glorify through their podcast that they charge up to INR 10 lakh for content collaborations with builders. It simply means builders are paying these property influencers hafty amount to influence the gullible home buyers. These home buyers have absolutely no way to know that these are advertising stuff and not investor education or information videos. And when builders pay for such content creations, it goes without saying that who gets glorified and at what cost.
Mind you, this is not just India-specific problem. The subject is very much at a discussion stage in many countries where lax regulations & ecosystem has made the real estate influencers laugh their way to the bank. A few years back the issue had taken centerstage in North Korea as well. But no solution could find its way through legal scrutiny. The state-run Korea Housing Institute had then delivered a warning message against the phenomenon. “The spread of indiscriminate information as well as market distortion is deepening on YouTube,” it had said in a statement.
In April this year, the Cyberspace Administration of China through Qinglang campaign – the literal meaning of which is “clean and bright” – announced to penalize Chinese social media influencers and internet celebrities deemed to be flaunting wealth or deliberately showcasing a luxurious life built on money.
In terms of the legality, there are regulations for social media influencers, including requirements to make clear disclosures and conduct due diligence before endorsing products or services. The Consumer Protection Act also prohibits misleading advertisements, which can be penalized with fines and imprisonment.
Even RERA seems to be helpless as it only questions the brokers and not social media influencers who on the face of it are not brokers. In reality, these influencers either have a separate website where the same projects are being advertised or are charging the builders for influencing and lead generation.
But in reality no one bothers t0 ensure accountability and maintain a standard of expertise on the subject. No Propinfluencer is giving any kind of disclaimer either. There is no defined code of conduct or professional boundary. It is a legal blindspot where few legal regulations are applied and everything goes in the name of freedom of speech.
No, I am not asking for the government authorities to punish those who encourage real estate speculation on YouTube, as in most of the cases no legal grounds are established when the content is simply said to be predictions based on freedom of speech. But while these paid celebrities with only qualification of being good conversationists engage with the unsuspecting audience and make money, the one who suffers is the vulnerable home buyer with limiting understanding of property investment.
No code of conduct; no regulatory guideline; and no legal obligation of even a basic disclaimer of being paid content is what constitutes the world of property influencers.
What is the solution? Well, may be an investor awareness programme that could understand the difference between what is product oriented influence peddling, and what is solution or advice oriented advice. As things stand today, real estate influencers are at best like selling insurance product by the bank. The buyer has no knowledge of downside and for the influencers it is just target marketing. A solution approach will in the long run give more credibility than sales approach. But then in the world of free-for-all influencers, it’s not about accountability and what drives them is playing around the YouTube algorithm that enhances views.
Ravi Sinha
#RaviTrack2Media
Ravi Sinha is a journalist with over two decades of cross-discipline media exposure. He is the CEO of real estate thinktank group Track2Realty. He has been writing extensively on the real estate sector for more than a decade now. Evaluation of real estate brand performance is his core domain expertise and he has immense insight into consumers’ psychograph. He has conceptualised Track2Realty BrandXReport as India’s 1st & only objective & non-paid brand rating journal that is industry-accepted benchmark of brand equity & ranking of the Indian real estate companies.
Track2Realty is an independent media group managed by a consortium of journalists. Starting as the first e-newspaper in the Indian real estate sector in 2011, the group has today evolved as a think-tank on the sector with specialized research reports and rating & ranking. We are editorially independent and free from commercial bias and/or influenced by investors or shareholders. Our editorial team has no clash of interest in practicing high quality journalism that is free, frank & fearless.
Subscribe our YouTube Channel @ https://bit.ly/2tDugGl
