Role of Finfluencers in Shaping Investment Decisions of Middle-class Investors – A PLS-SEM Approah

Abstract

In this research paper, use of social media-based financial influencers, usually known as finfluencers, in influencing the investment choices of middle-income people in India. As the financial services industry moves more and more online and more middle-class investors get involved with the capital markets, the finfluencers have become a powerful provider of financial advice and information. Nonetheless, there is little empirical data on the influence of certain factors associated with the use of finfluencers on the choice of investments, especially when it comes to the group of middle-income investors.This study examines how finfluencer-related variables, which include content quality, credibility and trust and social engagement, affect the investment decision-making process using a quantitative research design, which is survey-based. The conceptual framework includes the financial confidence and risk perception as a mediator variable. Likewise, PLS-SEM is used to test direct and indirect correlations between the constructs. The results indicate that the direct effect of credibility and trust in finfluencers has a substantial effect on investment choice, whereas content quality and social engagement do not possess a substantial direct impact. Nevertheless, credibility and trust, as well as social engagement, has a strong positive impact on financial confidence and risk perception, which, in its turn, strongly affects investment decisions. Such findings show that financial confidence and risk perception is a critical mediating variable especially when it comes to mediating the impact of social engagement in investment behaviour.