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Traditional finance theory is based on the principle of maximization of utility and explains how choices are made by rational people. Although the theory provides numerous insights, observation of actual behavior of people was seen to be different from what the theory predicted. The homo economicus is in reality a homo sapien who has emotions and beliefs that help to filter the content from his or her environment. These beliefs and preferences that arise due to cognitive limitations, presence of emotions, and various psychological motives guide or bias his or her decisions. Much literature states that the biases should be corrected as they negatively impact financial behaviour and individual's well‐being. However, evolutionary psychology considers biases as design features of human mind. Thus, biases are not always bad, as at times, these biases can help the individual investor to choose the best course of action from the multiple possibilities and enable committing the less costly mistakes, thereby helping the individual to achieve satisficing behaviour. This paper aims to explore the investor biases and see whether they are related to the financial satisfaction of the individuals. Financial satisfaction is the measure of satisfaction with one's financial situation. The results showed that overconfidence bias, reliance on expert bias, and self‐control bias have a positive and significant association with financial satisfaction levels. Association of a few other biases with financial satisfaction was also observed under certain control conditions. This study provides further insights on investor behavior and paves the way for various possibilities for future research.

PurposeIndian investors have been exposed to a plethora of investment opportunities in the past decade and a half, after the liberalization process which commenced in 1991. Over the years, the increased competition has brought a wind of change, not just in the economic environment within the country, but also a radical change in the choices and preferences of the financial consumers. In the endeavor to provide more personalized advice to the financial consumers, financial service providers need more insights into the minds of the consumers. However, little work has been done to understand the Indian individual investor. The purpose of this paper is to study the Individual investor in India: to segment the investor into distinct behavioural groups based on their biases; to understand the investment preferences and profile of the identified segments; and to understand the implications for financial services providers.Design/methodology/approachExploratory research, using In‐depth interviews, was undertaken to explore the manifestations of the biases among the individual investors. The initial inventory of 97 items pertaining to biases was assessed for content and face validity and subject to pilot test and subsequent rounds of modification. The final data were collected on a sample of 377 respondents, using a questionnaire that captured eight biases: Reliance on experts; Overconfidence bias; Self‐control bias; Categorisation tendency; Budgeting tendency; Adaptive tendency; Socially responsible investing bias; and Spouse effect. The segments of investor biases were identified using cluster analysis.FindingsA cluster analysis of data, collected from individual investors was conducted in India (n=377), yielded four main segments of individual investors biases, which have been termed as the Novice Learner, the Competent Confirmer, the Cautious Anticipator and the Efficient Planner. This typology has predictive validity with regard to financial satisfaction and perceived financial market knowledge.Practical implicationsThe paper presents a very important practical tool which can help financial service providers define their target audience more sharply and understand how people in these segments differ, behaviorally. Better understanding of investor's perceptions would help in designing more attractive financial products and development of marketing strategies that would impact the customer's financial satisfaction levels and create trust and customer loyalty.Originality/valueThis paper is a first of its kind to empirically identify the segments of biased behavior among investors and contributes to furthering the understanding on investor behavior.

PurposeThe purpose of this paper is to analyse the effect of demographic and socioeconomic factors on the financial satisfaction of the individual investors in India, who belong to the urban socio‐economic classification segment‐A.Design/methodology/approachBased on a sample of 374 individual investors, one‐way ANOVA, t‐test and correlation was conducted to find out which demographic and socio‐economic variables were associated with the individual's financial satisfaction levels.FindingsThe results of the research showed that factors such as age, marital status, occupation, work‐experience, income, saving rate, nature of household accommodation and investment tenure, impact the individual's financial satisfaction levels.Practical implicationsWith the increase in the household income levels in India as a result of the tremendous growth and expansion that the Indian economy has witnessed over the last decade, there has been a growth in the demand for financial planning and wealth management services too. The purpose of financial advisory services is to understand the clients' behaviour and needs and accordingly provide advice on the various aspects of financial planning and wealth management. The findings of the study have implications for policy makers and financial service providers.Originality/valueThough, the demographic and socio‐economic correlates of financial satisfaction have been extensively researched in the literature, there has been scant empirical research on the Indian financial consumer. This study fills this gap and is the first of its kind on the Indian Individual investor.

Purpose -The purpose of this paper is to present a review as well as a synthesis of the extant literature in the field of Neurofinance. The paper has been divided into eight parts. The first and second parts introduce the paper and dwell upon the brain functions in financial decisions. Part three presents the origin of Neurofinance and part four explains the difference between traditional finance, behavioural finance and neurofinance. Part five and six of the paper look into the research studies in Neurofinance and their application. Part seven gives a brief discussion on the limitations of neurofinance studies and part eight gives the conclusion. Design/methodology/approach -The existing body of academic literature pertinent to the domain of Neurofinance was reviewed so as to provide an integrated portrayal and synthesis of the current level of knowledge in this field. This paper covers the insights on the subject for developing a deeper understanding of the investor's psychology. Findings -Neurofinance is a very young discipline. It tries to relate the brain processes to the investment behaviour. Most of the researches in the domain of neurofinance focus on trading behaviour. It would be interesting to explore the workings of the brain for other investment behaviours too like personal financial planning decisions, etc. Originality/value -Neurofinance is emerging as an alternate field of study and practice and this paper is an attempt to look at the development of Neurofinance and its role in developing a better understanding of the investor behaviour.