When managing your money, take a chatbot's 'confidence' with a grain of salt

By — Pawan Jain, The Conversation Pawan Jain, The Conversation Leave your feedback Share Copy URL https://www.pbs.org/newshour/economy/when-managing-your-money-take-a-chatbots-confidence-with-a-grain-of-salt Email Facebook Twitter LinkedIn Pinterest Tumblr Share on Facebook Share on Twitter When managing your money, take a chatbot's 'confidence' with a grain of salt Economy Jul 12, 2026 2:57 PM EDT This article is republished from The Conversation . Consider the following scenario. Suzy is 63, recently retired, and trying to decide when to start receiving Social Security and how to manage her retirement savings to minimize the tax hit . She opens an AI chatbot, types in the details and gets a calm, well-organized and confident answer: Claim now, convert this much, here is the reasoning. The chatbot sounds authoritative and even shows its work. So Suzy follows its guidance and never calls a financial planner. Maybe the advice was fine. But maybe it quietly ignored the fact that Suzy's spouse is younger and in poor health, which can flip the Social Security math . It also may have overlooked that the retirement savings plan conversion it suggested would push Suzy into paying higher Medicare premiums two years later. Suzy won't find out for a long time, if ever, whether this guidance was right for her. And the AI will never call back to say it was unsure. READ MORE: Apple files lawsuit against OpenAI, accusing ChatGPT maker of stealing trade secrets Suzy isn't an exception. AI chatbots have entered everyday life with remarkable speed: 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 growing number are asking AI about money, and some are getting burned. According to a 2025 survey of 2,000 U.S. adults by Pearl.com, a professional services platform, 19% said they lost more than $100 by following financial advice from an AI chatbot. Among Gen Z investors, that figure rose to 27%. These aren't hypothetical risks. People are already paying for answers about their money that are confident – and wrong. As a finance professor who has been closely watching the spread of AI into personal finance, this is the part of the AI story that worries me most. And it's not the part you usually hear about. We argue about AI the wrong way There are two seemingly opposite complaints about AI. One is that people trust it too much, treating a chatbot like an oracle, a tendency researchers call algorithm appreciation . The other is that people don't trust it enough and dismiss its useful tools, a tendency known as algorithm aversion . I argue these are actually two sides of the same coin, and what decides which side you see is whether you can tell when the AI is wrong. When an AI fails in an obvious way, you notice and lose confidence. So you're more likely to seek a professional or another human you trust sooner than you otherwise would. That is the safe failure. The dan