| Abstract: |
Financial literacy has become increasingly important in an environment characterized by expanding investment choices, digital financial platforms, market volatility and growing individual responsibility for financial planning. Professionals, despite their education and regular income, may not necessarily possess adequate financial literacy or investment awareness. Their actual investment behaviour may therefore differ considerably from their preferred investment plans. The present review examines the relationship between financial literacy, investment awareness, risk perception and portfolio preferences among professionals. Existing studies suggest that financially literate individuals are generally more likely to diversify their portfolios, assess risk-return trade-offs and participate in market-linked investment products. However, actual investment choices are also influenced by income, age, family responsibilities, liquidity requirements, tax considerations, behavioural biases, financial goals and perceived risk. Traditional instruments such as bank deposits, insurance, provident funds and gold continue to attract many investors because of safety and familiarity, while mutual funds, equities, systematic investment plans and other market-linked products are increasingly preferred for long-term wealth creation. The review identifies an important research gap between investors' actual portfolio allocation and their stated preferred investment plans. It argues that financial literacy should be examined not merely as financial knowledge but as a combination of knowledge, attitudes, behaviour and digital financial capability. The paper proposes an integrated conceptual framework for studying how financial literacy and awareness influence the divergence between actual and preferred investment plans among professionals. |
