The Analyst in the Prompt: Role, Retrieval, and Memory Biases in LLM Financial Analysis

Large language models (LLMs) are increasingly deployed in financial contexts, raising critical concerns about reliability, alignment, and susceptibility to adversarial manipulation. While prior finance-related benchmarks assess LLMs' capabilities in stock trading, they are often restricted to small sample and fail to demonstrate LLM susceptibility to context with potential human bias. We introduce Fin-Bias (financial herding under long and uncertain financial context), a benchmark for evaluating LLM investment decision-making when faced with uncertainty and possible human-biased opinions. Fin-Bias includes 8868 long firm-specific analyst reports, including firm aspects summarized and analyzed by sophisticated analysts with investment ratings (Bullish/Neutral/Bearish) spanning from various industries. We present large language models with firm analyst reports with/without analyst investment ratings and even with 'fake' rating, to get investment ratings generated by LLMs. Our results reveal that LLMs tend to herd the explicit bias in context. We also develop a method to detect potential human opinions, which can encourage LLMs to think independently, some models even exceed human performance in predicting future stock return.

Investment competence is inherently personalized: the same market evidence can justify different actions for investors with different goals, horizons, portfolios, and risk boundaries. Yet financial LLMs are evaluated either by static question answering or by terminal profit and loss. The former omits agency; the latter cannot reveal whether a profitable action was grounded, profile-consistent, or merely lucky. We ask whether the community is using the wrong ruler for consequential agents. We introduce \textsc{InvestLogicBench}, a process-native benchmark containing 201,247 documented decisions from 151 real-world investors. Each episode instantiates a \textbf{P$\rightarrow$E$\rightarrow$R$\rightarrow$D$\rightarrow$O} trace: investor \textit{Profile}, observable market \textit{Events}, investment \textit{Reasoning}, executable \textit{Decision}, and delayed \textit{Outcome}. The release includes profile construction, point-in-time event binding, structured logic, horizons, outcomes, and post-mortems, and supports comprehension, profile-conditioned generation, and end-to-end replay. Across four leading LLMs, logical plausibility remains near 4/5 while event grounding is only 0.8--2.8/5; return and process quality also disagree. These results expose polished but weakly grounded reasoning that outcome-only evaluation hides. We further argue that P$\rightarrow$E$\rightarrow$R$\rightarrow$D$\rightarrow$O should be a data-system interface, requiring versioned profiles, temporal provenance, inspectable retrieval, decision ledgers, and replayable outcomes. Finance is our stress test for a broader class of personalized, consequential agents.

Financial decision-makers face more information than they can directly inspect, making context compression necessary. Yet when large language models (LLMs) compress financial source material, they can alter the investment judgment supported by the original source. We frame this problem as information fidelity: compression loses fidelity when it changes the decision induced by the source. In agentic systems, such losses may recur across intermediate steps and amplify throughout the decision process. Across financial filings and earnings-call transcripts, we find that LLM-based compression can produce fluent and factually plausible compressed contexts that nevertheless alter downstream decisions. We analyze two diagnostic patterns associated with fidelity loss: decontextualization, where salient evidence is retained but separated from the caveats and contextual qualifiers needed for correct interpretation, and model dependency, where different compressors expose different views of the same source. We then propose Agentic Context Compression, which generates multiple candidate compressions and audits their disagreements against the original source. Our results suggest that financial compression should be evaluated not only by efficiency or factuality, but also by its ability to preserve decision-relevant context.