AI chatbots are giving people bad financial advice, and a finance professor is worried

A finance professor is warning that AI chatbots are increasingly being consulted for high-stakes money decisions, with surveys showing real financial losses. A 2025 Pew Research Center survey found that 34% of U.S. adults and 58% of those under 30 have used ChatGPT, roughly double the share two years earlier. A separate Pearl.com survey of 2,000 U.S. adults found that 19% said they lost more than $100 by following financial advice from an AI chatbot, rising to 27% among Gen Z investors. The professor illustrates the risk with a hypothetical retiree named Suzy, 63, who asks an AI when to claim Social Security and how to manage retirement savings to minimize taxes. The chatbot gives a confident, step-by-step answer but may quietly miss critical factors, such as a younger spouse in poor health, which flips the Social Security math, or a Roth conversion that triggers higher Medicare premiums two years later. The AI never follows up to acknowledge uncertainty. Researchers call the tendency to trust chatbots like oracles "algorithm appreciation." The opposite complaint, that people dismiss AI too readily, also exists. But in personal finance, the asymmetry of harm is stark: a wrong answer about a recipe is inconvenient; a wrong answer about retirement distributions can cost thousands of dollars that are never recovered.