Thist study aims to examine the factors related to the susceptibility to investment fraud, using the investor survey conducted in South Korea. Especially, the current study focuses on how financial knowledge (both objective and subjective) is associated with investment fraud vulnerability and utilized two mediating variables (financial information seeking behavior and risk tolerance) to explain the psychological and behavioral mechanisms behind the protective role of financial knowledge on consumer vulnerability to investment fraud. The results highlight the importance of objective financial knowledge and self-research before making investment decisions. The findings contribute to the existing body of literature by highlighting both the direct and indirect role that objective financial knowledge plays in diminishing susceptibility to investment fraud. A key implication of this study is the strategic importance of fostering self-reliant financial behavior. The findings suggest that financial consumers may not be able to discern sound advice from misleading advice provided by financial professionals. Therefore, promoting the ability to distinguish fraudulent financial suggestions and encouraging self-reliance in financial decision-making are effective methods for reducing fraud risk. This approach encourages individuals to enhance their own financial capabilities and rely more on their analytical assessments.
