The Role of Perceived Risk in Shaping Personal Financial Choices: Insights from TPB

Abstract

This study examines the factors influencing investors' financial decision-making behavior by extending the Theory of Planned Behavior (TPB) with Perceived Risk. Data were collected from 661 respondents and analyzed using PLS-SEM through SmartPLS 4. The findings reveal that Attitude and Subjective Norms positively influence Behavioral Intention, while Perceived Risk has a negative impact. Perceived Behavioral Control was found to be insignificant. Additionally, Behavioral Intention significantly influences Actual Investment Behavior. The study validates the extended TPB framework and highlights the importance of psychological, social, and risk-related factors in shaping investment decisions. The findings provide useful implications for financial institutions, policymakers, and investment advisors in promoting informed investment behavior.