Digital Information Asymmetry and Investment Decision-Making in the Mutual Fund Industry

Evelyn Anto M; Dr. G. Balachandar

Digital Information Asymmetry and Investment Decision-Making in the Mutual Fund Industry

Author(s)	Ms. Evelyn Anto M, Dr. G. Balachandar
Country	India
Abstract	Abstract The rise of digital financial influencers — commonly called "finfluencers" — on platforms such as YouTube, Instagram, and Telegram has changed how ordinary retail investors learn about mutual funds. Historically, this was an area where information was concentrated in the hands of a few actors: certified financial advisors, asset management companies (AMCs), and formal regulatory disclosures. Retail investors had comparatively little independent access to reliable information, a condition economists call information asymmetry. Social media has inserted a new, informal layer of information between these traditional sources and the investor, and this study investigates what that layer actually does: does it help close the information gap, or does it introduce a different kind of imbalance built on oversimplified, biased, or commercially motivated content? The study is grounded in three theoretical traditions — Information Asymmetry Theory, Source Credibility Theory, and the Theory of Planned Behaviour — which together explain, respectively, why the information gap exists, why some influencers are trusted more than others, and how perceptions translate into actual investing behaviour. Using a structured questionnaire administered to retail mutual fund investors, the study applies regression analysis and Structural Equation Modelling (SEM) to test how exposure to influencer content shapes investors' sense of being adequately informed, their trust and confidence, and ultimately, three measurable outcomes: which funds they choose, how diversified their portfolios are, and whether they keep their Systematic Investment Plans (SIPs) running consistently over time. The design also tests whether the strength of these effects depends on who the investor is — their age, income, existing financial literacy, and prior investing experience — and it incorporates investor awareness of SEBI's 2023–2025 finfluencer regulations as a further factor shaping trust in influencer-sourced information. The expected contribution is a clearer, evidence-based answer to whether finfluencers function as genuine intermediaries that narrow the information gap for retail investors, or whether they merely relocate the asymmetry problem rather than solving it — with direct implications for regulators, AMCs, and investor-education programmes.
Keywords	Keywords: finfluencers, information asymmetry, mutual funds, retail investors, SEBI, investment decision-making, structural equation modelling (SEM)
Field	Business Administration
Published In	Volume 8, Issue 5, September-October 2026
Published On	2026-09-20

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Digital Information Asymmetry and Investment Decision-Making in the Mutual Fund Industry

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