Misleading online information leads many Americans to make financial errors

According to a CFP Board research report, Steering Clear of Financial Misinformation: A Survey of Americans, more people are turning to the internet for financial advice. As a result, nearly 3 out of 5 people said that they’ve made regrettable financial decisions that are based on misleading information they received online

Even with the vast availability of financial content online, fewer than 2 in 5 Americans believe this information is in their best interests. Also, the survey pointed out, more than three in five Americans now spend more time verifying information than they did five years ago.

Harmful effects of misleading information

Misleading financial information does not just confuse, it costs people money as well, the survey said. For instance, nearly two out of five Americans (39%) have lost $250 or more because of bad advice, and almost 1 in 5 (18%) have suffered losses that amount to more than $1,000. While some have narrowly avoided these pitfalls — one in five reconsidered questionable advice before acting on it — many are dealing with lasting effects.

Among those with regrets, common consequences include:

• Delaying major financial decisions (33%)
• Acting without professional input (29%)
• Incurring unnecessary fees (28%)
• Sharing inaccurate information with others (28%)

As Kevin Roth, Ph.D., managing director, Research, at CFP Board, added, “when consumers rely on misleading financial information, they’re less likely to achieve their financial goals, delaying major decisions like buying a home or retiring, and fueling anxiety about their financial future.”

More negative effects

Brian Haney, CEO of The Haney Company, provided some additional consequences of misleading financial information.  “Like misleading information of any kind,” Haney said, “acting upon it without the benefit of understanding not just the information, but the impact of improper application, the consequences are often bigger than we recognize. Not getting the right amount of life insurance is serious financial harm to loved ones if someone dies. Using the wrong information to construct an investment portfolio can lead you to market losses you were likely not prepared for. When it comes to our money, small mistakes can sometimes have grave consequences, so, the need for financial professionals to be engaging more effectively on the front lines of where consumers are seeking answers could not be more critical.”

Younger Americans more apt to be misled

The research also pointed out a generational divide in both trust and the consequences of misleading information. Nearly half of Americans aged 25-45 believe that online financial content serves their best interests, almost double the rate of those aged 46-64 (25%). Younger adults are also more likely to act on misleading information, with 64% reporting regrettable decisions, compared to 45% of those who are aged 46-54.

And why are younger adults more likely to act on misleading information than their older counterparts? “Younger Americans are more than twice as likely than others to turn to social media for financial advice, and they’re more likely to trust what they find,” explained Roth. “Many rely on platforms like Instagram, TikTok and X, making them especially vulnerable to misleading information.”

In addition, according to the survey, only 33% of younger Americans have entirely avoided mistakes from online financial advice, compared to 54% of older adults. This generational gap extends to sources of financial guidance as well. Younger respondents are nearly twice as likely to trust financial advice from artificial intelligence (44% vs. 26%) and guidance found on social media (44% vs. 24%).

“Consumers who rely on misleading financial advice risk paying unnecessary fees, getting locked into the wrong financial products or, even worse, delaying major goals like buying a home, funding their children’s college or retiring,” Roth explained.

Haney added that those generations who have been raised immersed in technology naturally have a higher degree of trust in what that technology can offer to them. Unfortunately, he said, this level of comfort can lead many to be unduly influenced by information that they do not yet have the capability to more properly interpret.

“When Amazon can deliver things to your front door in a day, or when YouTube can help you fix your toilet, it’s easy to understand why advice of all kinds, including financial, could be helpful,” added Haney.  “I consider this era “the illusion of wisdom,” where the mere fact that we have access to information at the touch of a keyboard gives us the false sense of security that we are somehow better informed and better able to “do things ourselves.”

However, Haney pointed out, behavioral psychology shows that this overwhelming amount of information does not lead us to make better decisions, because not having information was never really the issue.  “It’s knowing how to properly interpret that information and apply it to your unique and specific situation is what I consider wisdom.  This is the perfect place for financial professionals to operate – in the gap between information overload, and DIY – to bridge that knowledge gap by empowering Americans with the expertise needed to move forward financially,” he said.

Working with clients

Haney also shared some of the steps that advisors can take to help guard their clients from relying on and acting on misleading online financial information. Advisors need to lean into what is already happening by cultivating a skillset of curiosity, he said. They need to become better at engaging more frequently with their clients and prospects to understand where they like to consume their financial information (what places and media they use), and what they find the most impactful from those sources.

“Use your interests to create better dialogue, one where the advisor is a partner helping people interpret information in order to properly apply it to their situation,” he said.

The survey pointed out that amid growing digital misinformation, most Americans trust financial advisors like CFP professionals. In fact, three in four Americans said that they feel confident when following their financial advisor’s advice without needing further verification.

Read the full Steering Clear of Financial Misinformation: A Survey of Americans report. From April 7-8, 2025, CFP Board’s Research Team sent a 13-question survey to randomly selected Americans aged 25 and 64 nationwide, as sourced by Alchemer. The survey generated 1,044 responses, the data from which serves as the basis of this report.

 

© Entire contents copyright 2025 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

 

 

o