55% of Americans now use AI for financial advice — and an MIT professor says most are doing it wrong

Not quite sure what to do with your money? More and more Americans are turning to artificial intelligence to answer the question.

According to TD Bank’s 2026 AI Insights Report (1), the proportion of people using AI to help manage their finances jumped from 10% last year to 55% this year.

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However, less than two-thirds (62%) of people reported trusting AI to spit out “honest, reliable and competent information,” and less than one in five say they’d trust it to “make financial recommendations on its own.”

Maintaining a healthy skepticism aligns with expert thinking.

“One of the things about [large language models] that I find particularly concerning is that no matter what you ask it, it’ll always come back with an answer that sounds authoritative, even if it’s not,” Andrew Lo, director of MIT’s Laboratory for Financial Engineering and principal investigator at its Computer Science and Artificial Intelligence Lab, told CNBC (2).

“When it comes to very, very specific calculations of your own personal situation, that’s where you have to be very, very careful,” he said.

What AI is good — and not so good — at

Lo says AI can be useful for giving us the broad strokes when it comes to financial planning: providing options and detailing how those options work. But, the advice can be wrong — “they could be hallucinating” (3) — and it’s up to users to make their “own best judgement as to whether or not it makes sense” for them.

In a recent web presentation for Harvard University’s Griffin Graduate School of Arts and Sciences (4), Lo also warned that AI can not yet satisfy “fiduciary duty” (5), the legal and ethical obligation of a financial advisor to act in your best interest.

“The question is do large language models have our back? The answer is no, not yet,” Lo said (6).

The Wall Street Journal put it (7) in more clinical terms, saying AI chatbots are “the digital equivalent of sociopaths — smooth, persuasive and devoid of empathy” and shouldn’t be trusted for financial advice.

But we’re falling hook, line and sinker. In an August 2025 survey by Intuit Credit Karma (8), finance ranked second (41%) behind health and wellness (44%) as the most common use case for AI. Two-thirds of respondents who had used AI reported having asked it for financial advice.

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It represents a big regulatory question, says Sebastian Benthall, a senior research fellow at New York University School of Law’s Information Law Institute.

“Who’s really responsible, and can people really be relying on a product to do this if it’s not being backed up by a corporation with a fiduciary duty?” Benthall told CNBC (9). “It’s really unresolved.”

How to make the most of AI

Concerns aside, Lo does advocate AI as a useful tool in financial planning, as long as you double and triple-check (2) the output. Important advice, considering the majority of users have already jumped in with both feet.

According to the Intuit Credit Karma survey (8), 85% of people who’ve asked AI for financial advice have acted on that advice. Fortunately, 80% said their financial situation had improved as a result, and 81% said they felt more confident managing their finances because of AI.

Making the most of AI comes down to prompting, says Lo, describing it as a real “art — and science.” (10)

“Here’s a bad prompt: How should I retire? It’s just too generic,” he explained in the webinar (11).

A better prompt, he said, would look like this:

“Assume you are a fee-only fiduciary [financial] advisor. Here are my goals, constraints, tax bracket, state, assets, risk tolerance and timeline. Provide me with, number one: base case strategy. Number two: key assumptions. Three: risks. Four: what could invalidate this plan. Five: what information you are missing, and in particular, what are you uncertain about.”

Lo also recommends taking time to think about your financial goals and needs, writing down all your questions — as you would for a meeting with a human financial advisor — before prompting a chatbot.

“If you don’t provide that detail,” he said (12), “they’ll just give you generic gobbledygook that will not be particularly helpful.”

55% of Americans now use AI for financial advice — and an MIT professor says most are doing it wrong

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