Instead of working with a financial advisor, many consumers are turning to the internet for financial guidance. The move might come at a cost for some.
The CFP Board’s latest research, “Steering Clear of Financial Misinformation: A Survey of Americans,” finds that 57% of those surveyed say they’re regretted some of the financial decisions made due to misleading online information, even as 39% believed the information would have served their best interests.
Such misinformation could end up costing Americans more, in both time and dollars. Thirty-nine percent of respondents say they’ve lost $250 or more due to bad advice, and 18% have incurred losses of over $1,000.
Others have had to delay major financial decisions (33%) and deal with unnecessary fees (28%), while some have even shared inaccurate information with others (28%). One in five respondents reported experiencing an increase in financial anxiety.
As a result, 62% say they now spend additional time verifying information compared to five years ago.
“Americans are drowning in online money advice, much of it misleading,” said CFP Board CEO Kevin R. Keller, CAE. “That gap between easy access and reliability puts financial futures at risk.”
Younger Americans were especially likely to fall for such misinformation, as more tend to base financial decisions from online content and social media “finfluencers.” Nearly half (48%) of respondents between the ages of 25 to 28 say financial content aligns with their best interests—over double the rate compared to older Americans, at 26% for those ages 46-64.
Further, 64% of Americans say they’ve made regrettable financial decisions compared to 45% of those between the ages of 46 to 54.
Their sources of financial guidance also extend to artificial technology (AI) solutions, with younger respondents nearly twice as likely to rely on financial advice from AI tools, at 44% relative to 26% of older Americans.
While younger Americans continue to source the functionality for financial decisions, experts warn about the tool’s lack of emotional support when providing assistance. Sixty-four percent of respondents to a BMO Financial Group study in 2024 noted that AI tools cannot understand how emotions play a factor in financial planning.
“AI offers great potential in the way we handle our finances, providing real-time insights and analysis. However, managing money is more than analytics; it is a deeply personal relationship shaped by emotions, experiences, and unique life circumstances,” said Paul Dilda, head of U.S. Consumer Strategy at BMO, at the time.
AI use grows
Usage of AI solutions has recently stood at the center of conversations in the retirement plan space, as more Americans—and firms—rely on the tools for day-to-day tasks and responsibilities.
Research from Cerulli Associates in January reported that a growing, yet still slight, number of recordkeepers are integrating AI functionalities into defined contribution (DC) plans, and specifically on plan management and back-office strategies.
The report noted that other operations, including beneficiary designations that are traditionally handled via paper products, could also benefit from AI enhancement.
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.