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When Summaries Distort Decisions: Information Fidelity in LLM-Compressed Financial Analysis

Author

Listed:
  • Hoyoung Lee
  • Suhwan Park
  • Seunghan Lee
  • Jun Seo
  • Jaehoon Lee
  • Sungdong Yoo
  • Minjae Kim
  • CheolWon Na
  • Zhangyang Wang
  • Zach Golkhou
  • Minkyu Kim
  • Sotirios Sabanis
  • Alejandro Lopez-Lira
  • Dhagash Mehta
  • Soonyoung Lee
  • Chanyeol Choi
  • Wonbin Ahn
  • Yongjae Lee

Abstract

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.

Suggested Citation

  • Hoyoung Lee & Suhwan Park & Seunghan Lee & Jun Seo & Jaehoon Lee & Sungdong Yoo & Minjae Kim & CheolWon Na & Zhangyang Wang & Zach Golkhou & Minkyu Kim & Sotirios Sabanis & Alejandro Lopez-Lira & Dhag, 2026. "When Summaries Distort Decisions: Information Fidelity in LLM-Compressed Financial Analysis," Papers 2606.29251, arXiv.org, revised Jul 2026.
  • Handle: RePEc:arx:papers:2606.29251
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    References listed on IDEAS

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    1. Yaxuan Kong & Hoyoung Lee & Yoontae Hwang & Alejandro Lopez-Lira & Bradford Levy & Dhagash Mehta & Qingsong Wen & Chanyeol Choi & Yongjae Lee & Stefan Zohren, 2026. "Evaluating LLMs in Finance Requires Explicit Bias Consideration," Papers 2602.14233, arXiv.org.
    2. Paul Glasserman & Caden Lin, 2023. "Assessing Look-Ahead Bias in Stock Return Predictions Generated By GPT Sentiment Analysis," Papers 2309.17322, arXiv.org.
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