Financial literacy (FL) is essential for informed decision-making, yet many individuals encounter difficulties with fundamental concepts, such as risk diversification. This contribution describes a research design to examine how using virtual reality (VR) to present educational content affects individuals’ understanding of risk diversification. Traditional learning materials typically include only text, sometimes complemented by pictures and video. VR offers an immersive alternative that may improve learning outcomes in financial education. We will conduct an incentivized laboratory experiment with German students randomly assigned to one of four instructional treatments: text-only, text with pictures, video, or VR simulation. The experiment includes a pretest to assess participants’ financial and technical literacy, an educational intervention on risk diversification, and a three-period asset allocation task. We examine how the different treatments influence participants’ risk diversification decisions by simulating positive and negative returns. A posttest measures knowledge retention through multiple-choice questions, and knowledge transfer is evaluated through open-ended responses. We conduct a delayed posttest with comparable knowledge questions one week later to assess the persistence of learning effects. Our outcome variables—knowledge retention, knowledge transfer, and asset allocation decisions—allow us to evaluate participants’ understanding of risk diversification and determine whether VR-based learning outperforms traditional instructional material. Our findings will offer valuable insights for designing financial education material and provide empirical evidence of the potential of VR-based learning to improve FL and financial well-being.