- Benzinga Advisor
- Posts
- 1 In 5 Americans Lost Money To AI — Here’s Where Advisors Still Win
1 In 5 Americans Lost Money To AI — Here’s Where Advisors Still Win
Plus, the latest in market news.
Happy Sunday, and welcome to Benzinga’s financial advisor newsletter.
Today we're talking about artificial intelligence. From boardrooms to living rooms, more people are turning to AI tools — not just to boost productivity, but to make real-life investment decisions. However, despite growing trust in AI, nearly 1 in 5 Americans has lost money following chatbot advice. Read on to see why clients need more than answers, they need advisors who see the full picture.
Plus, a look back at the last week of market activity.
Table of Contents
INDUSTRY CHATTER
This week, OpenAI become the world’s most valuable startup, hitting a staggering $500 billion valuation, surpassing SpaceX and setting a new benchmark for what startups can become.
At the same time, the AI spending boom is pushing major tech firms deeper into debt as they scramble to stay competitive in the arms race for artificial intelligence supremacy.
Why? Because AI adoption isn’t slowing down. From boardrooms to living rooms, more people are turning to AI tools — not just to boost productivity, but to make real-life decisions, including financial ones.
A recent survey found that nearly 1 in 5 Americans lost over $100 after following financial advice from an AI chatbot. That number jumps to 27% among Gen Z investors — a group already navigating first-time investing decisions, crypto curiosity, and social-media-fueled financial FOMO.
The same study also highlighted that 22% of Americans followed medical advice from AI that was later proven wrong.
It’s a reminder that while advice from AI chatbots is free — sometimes, that’s exactly what it’s worth.
Where Advisors Add Value
About half (54%) find current GenAI solutions like ChatGPT to be trustworthy, down from 66% in December. And yet, 61% of respondents have actively followed advice from an AI tool in the past 30 days in at least one area of professional expertise (personal finance, medical, legal, etc.). In other words, a solid majority have recently put AI recommendations into practice, underscoring AI’s influence on real-life decisions.
This growing trust in AI is not necessarily a threat — it’s a signal. Clients, especially younger ones, want quick, understandable advice. And they’re seeking it wherever they can get it.
That’s an opportunity for advisors to lean into their human edge:
Context matters: AI doesn’t know a client’s full financial picture — you do
Follow-up questions: When someone asks, “What’s the best investment right now?” AI gives an answer, while advisors ask follow-up questions for more insights
Policy change: AI may not always reflect new laws or deadlines
Emotions: AI doesn’t see fear, greed, or financial anxiety — you can
AI Flaws: A chatbot may seem appealing, but as the data shows, the cost of bad advice can be far greater and ends up doing more harm than good.
You don’t have to be anti-AI. But you can be pro-client.
Use this moment to highlight the difference between information and insight — between asking a chatbot a question, and having a conversation with someone who actually listens.
Because when it comes to financial decisions, even small missteps can carry big costs. AI might seem cheaper, quicker, or smarter — but it can’t replace the insight, nuance, and foresight a good advisor brings to the table. That’s not just a service. It’s protection.
Good advice isn’t just about getting an answer. It’s about getting the right one.
WEEKLY MARKET RECAP
Wall Street soared to fresh record highs at the end of the week, brushing aside the 21st U.S. government shutdown in history and a missing jobs report, as investors doubled down on bets for interest rate cuts and cheered strong gains in pharmaceutical and AI-driven tech stocks.
The S&P 500, Nasdaq 100, Dow Jones Industrial Average and Russell 2000 all reached record highs on Friday, as traders largely ignored the budget impasse in Washington and focused instead on corporate optimism and monetary easing.
The Bureau of Labor Statistics failed to publish its monthly jobs report on Friday due to the shutdown, but markets leaned heavily on private data pointing to labor market softening.
The ADP Employment Report showed the largest private-sector job loss in over two years, while the ISM Services PMI recorded its fourth consecutive month of contraction in its employment component.
These signs reinforced expectations that the Federal Reserve could lower again its benchmark rate to 3.75%-4% at its October meeting, further fueling risk appetite.
Health Care Stocks Notch Best Rally In Years
Healthcare stocks were among the top performers. Pfizer (PFE) soared after striking a landmark deal with President Donald Trump‘s administration.
The agreement commits Pfizer to apply most-favored-nation pricing — aligning U.S. Medicaid drug prices with the lowest prices paid by other developed nations. In exchange, the company will avoid tariffs on branded drugs for three years.
Additionally, Pfizer pledged a $70 billion investment in U.S. manufacturing and will participate in TrumpRx.gov, a new government-backed drug discount platform.
The deal is seen as a possible template for the rest of the pharmaceutical industry. Shares of Eli Lilly (LLY), Thermo Fisher (TMO), Merck & Co. (MRK) and Amgen (AMGN) all logged double-digit gains over the week.
The AI-driven tech rally rolled on, with Nvidia (NVDA) hitting a staggering $4.6 trillion market capitalization, driving the total value of the so-called Magnificent Seven tech giants to $21 trillion.
Risk appetite spilled into speculative assets as well. Bitcoin climbed above $121,000, nearing its August highs.
Automakers Diverge
Shares of Michigan automakers saw a mixed performance. General Motors (GM) fell 3% despite EV sales doubling from 2024, Ford (F) rose 5% and Stellantis N.V. (STLA) surged 14% as sales rose after eight quarters of declines.
GM, Ford and Stellantis reported year-over-year sales growth of 8%, 8.2% and 6%, respectively, in the latest quarter.
THE WEEK AHEAD
Economic Data
Monday: Kansas City Fed President Jeff Schmid speaks
Tuesday: Trade deficit, Consumer credit, Fed speeches (Bostic, Miran)
Wednesday: Fed speeches (Barr, Kashkari, Goolsbee), FOMC minutes
Thursday: Jobless claims, wholesale inventories
Friday: Consumer sentiment, nonfarm payrolls, hourly earnings
Earnings
Click here for the full calendar of economic data and earnings reports.
LEARN WITH BENZINGA PRO
Lastly, if you would like to be featured in our upcoming Advisor Spotlight and showcase your business in front of all our subscribers, click here to send us an email.
BEFORE YOU GO
Were you forwarded this email? Click here to subscribe.
And be sure to check out our other newsletters:
Ring The Bell: Created for market enthusiasts by market enthusiasts, this twice-daily newsletter delivers top stories, fast movers, and hot trade ideas straight to your inbox. Subscribe here.
Future Finance: Where fintech, crypto, and the future of finance collide. Future Finance is a perfect lunch read packed with quick bites for industry enthusiasts. Subscribe here.
Tech Trends: Get the inside scoop on AI, the hottest gadgets, and mind-blowing tech trends. Subscribe here.