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Consumers need to focus on more than cost

Your Money
Written By:
Your Money
Posted:
Updated:
01/02/2013

Consumers are putting themselves at risk by focusing on cost alone when buying financial products, a research company has warned.

According to Defaqto, although price will always play an important role in consumers’ decision making process, focusing on cost alone can risk a mis-match between what someone needs from a financial product and what it actually provides.

Brian Brown, Defaqto’s head of consulting, said: “Whether you are insuring your home or car, or buying a protection product for you and your family, it is essential that you match the features and benefits you require with those provided by the product you choose.

“If consumers focus on price alone they can run the risk of buying an inappropriate product that doesn’t meet their needs – and they are only likely to discover this when it’s too late.”

Defaqto has launched its Star Ratings for 2013, with the aim of helping people understand where a product sits in the market based on the quality and comprehensiveness of the features and benefits it offers.

Star Ratings provide an independent assessment of all products across nearly 50 different product types within the following areas:

Credit cards

• Current accounts – including current account switching

• General insurance – including home, motor, pet and travel insurance

• Pensions and investments

• Life insurance and protection

Defaqto has given each product a Star rating from 1 to 5 based on an in-depth analysis of a wide range of features and benefits.

To achieve a 4 or 5 Star rating, as well as meeting the required level of feature quality and comprehensiveness as a whole, products must also provide a minimum level of benefit against ‘core criteria’ – these are features which, based on Defaqto analysis and market and industry developments, are key to a product representing a high quality offering to consumers.

Brown added: “Our Star Ratings provide an independent rating of the level of features and benefits offered by a wide range of products. They provide an at a glance view of where products sit in the market in terms of feature quality and comprehensiveness – with the aim of supporting consumers’ financial decision-making process.”

Defaqto’s Star Ratings centre enables consumers to:

• Find 5, 4, 3, 2 or 1 Star rated products and compare their features and benefits

• Identify what Star Rating their current product, or one they are considering, has

• Access information about Star rated products so they can learn more about what they offer

Consumers can visit www.defaqto.com/stars to access this year’s ratings.


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