AI chatbots are offering financial advice. Should you trust them?

Experts say AI can get personal finance fundamentals right but may struggle with nuanced questions. Kiichiro Sato/AP hide caption

If you ask an AI chatbot for advice on how to revive your wilted tomato plant or for a movie recommendation, even a bad answer has pretty low stakes.

Still, some Americans are giving it a try. The data analytics company JD Power asked 4,000 people about their financial health and found that 40% of them had turned to AI in the prior three months to help manage their finances. More than a third of those using AI said they found the advice helpful in making smarter financial decisions, comparable to the share of those who found their bank's advice helpful.

David Kendrick, a 53-year-old IT manager in Dayton, Ohio, uses ChatGPT so often for advice that he has started referring to it as "Chatty." He has asked it about everything from what to do with his home equity line of credit to how to handle his recent salary bump. Should he put more of that income toward paying off debt or direct it to his Roth IRA?

He does see a human adviser once a year, but Kendrick said having access to advice anytime, as well as being reassured that his financial plans look OK, calms his financial anxiety.

"I've always kind of had that, because my parents struggled," Kendrick said. "And this very much helped."

Overall, Kendrick said, his finances are solid. But that's not necessarily true for the biggest group of people using AI for financial advice, according to the JD Power survey. The data firm labeled those people as "overextended," meaning they might be a bit over their budgets and have some debt.

Those users reported asking chatbots questions about things like how to stretch their dollars, and they got back advice along the lines of skipping the name-brand cereal for the store version.