Younger Americans are increasingly turning to online sources for financial advice, but many are paying a steep price for trusting unreliable information. According to Brad Zucker of SMA Wealth Management, 48% of Americans aged 25 to 45 believe online financial content serves their best interest. This demographic is twice as likely as older generations to trust financial advice from artificial intelligence and social media platforms.
Zucker highlighted the financial repercussions of this trend, noting that nearly two in five Americans have lost more than $250 due to poor advice, with half of them losing over $1,000. “The rise of AI and social media has made it easier for people to find free guidance, but it’s also making it more difficult to verify if the information is accurate and trustworthy,” he said.
While not all online advice is unreliable, Zucker warned that distinguishing good advice from bad can be challenging without prior knowledge. He cited an example where a New York Times writer found Google AI providing inaccurate pricing information based on a single user review.
Zucker also pointed out the dangers of risky investment advice prevalent on platforms like TikTok, Reddit, and Instagram. “Day trading, which is something even financial professionals with years of experience consider difficult, is often portrayed as a low-effort path to vast riches,” he said. He emphasized the importance of a long-term investment strategy over frequent buying and selling.
Misleading information about debt is another concern. Social media influencers often showcase luxury purchases made on credit, claiming they avoid debt by using Buy Now, Pay Later services. However, Zucker warned that missing payments can lead to high interest rates and damaged credit ratings.
AI-generated financial advice is not immune to errors either. An economics professor found that AI services like ChatGPT, Google, and Bing often produced flawed results when asked financial questions. “AI is quick and easy, but it shouldn’t be relied upon for something as important as financial decision-making,” Zucker said.
For reliable financial advice, Zucker recommended consulting a professional who can tailor a plan to individual financial situations. “The best financial advice will come from a professional who takes the time to learn about you and your unique financial situation,” he said.
