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More Americans are taking financial advice from algorithms than from actual advisors — and it’s starting to cost them.
A new Pearl.com study found that 19% of Americans have lost over $100 following bad AI advice, yet 27% still believe AI can give them all the financial guidance they’ll ever need.
That’s not just a tech trend, it’s a trust crisis. Financial advisors aren’t competing with each other anymore; they’re competing with code.
AI Has Become the Advisor People Trust Most
People are drawn to AI because it’s always available. It answers instantly, never judges, and speaks in clear, confident tones.
In a shaky economy where 53% of Americans can’t cover an emergency medical expense and 27% have delayed having children due to financial pressure, free, friendly advice feels irresistible.
But convenience comes at a cost. Anyone who’s asked ChatGPT a detailed financial question knows its confidence often outpaces its accuracy. Large language models are prone to “hallucinations,” meaning they fabricate numbers, invent facts, and do it persuasively.
The result: 22% of Americans are following AI’s stock-buying advice, 21% are buying crypto on its recommendation, and nearly 1 in 10 have taken tax advice from it in the last 30 days.
It’s not that people suddenly stopped trusting humans, it’s that AI feels more approachable than many advisors do.
The New Reality: Advisors vs. Algorithms
AI isn’t the enemy. But it is the competitor that never sleeps.
To stay relevant, advisors need to do more than critique AI; they need to outperform it. The best will transform into what we call “the modern advisor”: one who combines machine intelligence with human judgment, empathy, and ethics.
Here’s how they’ll win.
- Turn AI into your intern, not your enemy. Encourage clients to use AI to prepare for meetings —to gather questions, research definitions, or model basic scenarios. Let AI handle curiosity, so you can handle complexity.
- Draw the red line. Be explicit about where AI stops and fiduciary expertise starts. Make it clear: AI can summarize, but it can’t strategize.It doesn’t know a client’s risk tolerance, estate goals, or emotional triggers — the very things that make financial planning human.
- Use AI to multiply your time.Modern advisors use AI to automate workflows, create client summaries, and generate quick analyses. The time you reclaim is time you reinvest in what AI can’t replicate — building trust and context.
AI Won’t Replace Advisors But Will Expose the Lazy Ones
AI won’t make advisors obsolete. It will make average advice obsolete. The professionals who resist technology will lose clients to the illusion of confidence. The ones who embrace it — and layer human insight on top — will build stronger, faster-growing practices.
AI doesn’t steal clients. It reveals which ones were never truly yours.
In the next era of financial planning, the most successful advisors won’t be anti-AI, they’ll be augmented by it. And they’ll use it to do what algorithms can’t: guide people through the uncertainty of money, not just the math of it.
No matter how advanced the machine, trust will always be human currency.
Andy Kurtzig is CEO of Pearl.com. Moira Corocoran, CPA, is a financial advisor for Pearl.com.
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