Fund2Persona creates and refines LLM personas for financial advisors from fund disclosure data, outperforming generic baselines on holdings reconstruction and commentary alignment.
One Size Fits None: Heuristic Collapse in LLM Investment Advice
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abstract
Large language models are increasingly deployed as advisors in high-stakes domains -- answering medical questions, interpreting legal documents, recommending financial products -- where good advice requires integrating a user's full context rather than responding to salient surface features. We investigate whether frontier LLMs actually do this, or whether they instead exhibit heuristic collapse: a systematic reduction of complex, multi-factor decisions to a small number of dominant inputs. We study the phenomenon in investment advice, where legal standards explicitly require individualized reasoning over a client's full circumstances. Applying interpretable surrogate models to LLM outputs, we find systematic heuristic collapse: investment allocation decisions are largely determined by self-reported risk tolerance, while other relevant factors contribute minimally. We further find that web search partially attenuates heuristic collapse but does not resolve it. These findings suggest that heuristic collapse is not resolved by web search augmentation or model scale alone, and that deploying LLMs as advisors requires auditing input sensitivity, not just output quality.
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cs.CL 1years
2026 1verdicts
UNVERDICTED 1representative citing papers
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Fund2Persona: A Framework for Building and Refining Financial Advisor Personas from Fund Disclosure Data
Fund2Persona creates and refines LLM personas for financial advisors from fund disclosure data, outperforming generic baselines on holdings reconstruction and commentary alignment.