Who are Indians listening to for investment advice? Not the traditional financial experts. A survey by the Securities and Exchange Board of India (Sebi) reveals that a massive 62% of retail investors are making decisions based on recommendations from social media’s finfluencers, bypassing formal channels and highlighting a profound trust deficit.
The Sebi Investor Survey 2025 has also laid bare the great Indian investor paradox. Awareness of securities products is at a record high (63% of households), yet risk aversion, concerns over market complexity, and that lingering trust deficit continue to keep most households on the sidelines of India’s growth story. Actual participation is a mere 9.5%, meaning 213 million households are aware of the market, but just 32.1 million have actually participated, highlighting a vast, untapped reservoir of retail capital.
The survey, Sebi’s first comprehensive study in a decade, was conducted by Kantar across 90,000+ households.
Deep-rooted caution
At its core, the Indian household remains risk-averse. Nearly 80% of families prioritize capital preservation over returns. Only 5.6% show a high risk tolerance, willing to face short-term losses for long-term gains.
Awareness isn’t translating into participation: 53% know mutual funds and ETFs, and 49% are familiar with stocks. Yet penetration is just 6.7% and 5.3% respectively. More complex products like futures and options (F&O), REITs, or corporate bonds remain below 1%.
The urban-rural divide is stark. Penetration is 23% in the top nine metros but only 6% in rural areas. Education and occupation also matter: post-graduates (27%), graduates (19%), salaried employees (23%), and self-employed (17%) show far higher participation than those in agriculture (4%) or unskilled work (3%).
Why Indians hold back
The report delves into the barriers for investing in securities market products. The primary concerns include complexity and information gaps and risk and return concerns. Main worries include fear of market losses, limited knowledge and accessibility, and low trust in financial institutions.
The most cited concerns for 74% of non-investors are lack of knowledge about how products work, simply not knowing how to start investing, and confusion caused by information overload.
The “fear of losing money due to market risks” is the single largest barrier, cited by 34% of non-investors. A significant 51% of non-investors are held back by a lack of trust in financial products and institutions.
One key segment identified by Sebi is the “intenders”-22% of aware non-investors who plan to start investing in the next year. They are motivated by higher returns and quick gains from small investments. However, their focus on quick gains, combined with limited knowledge, presents a challenge, as their expectations may be misaligned with market realities.
Influence of finfluencers
The report highlights that the source of information for these investors has dramatically shifted. Personal contacts, finfluencers, and digital peer groups remain the top sources of information across securities market products.
The report highlights that while 59% of the investors turned to friends, family and colleagues for the usual source of information for market products, 56% turned to finfluencers on social media.
The perceived credibility of these influencers is exceptionally high, with 93% of their followers finding them “moderately to highly” credible. Alarmingly, 62% of these investors admit to making some or most of their investment decisions based on finfluencer recommendations.