Value-for-money is the key to Best Buys

Commenting on the launch of defaqto’s new quality comparison tool for financial products, Editor-in-Chief of EveryInvestor Chris Gilchrist says: “Consumers know perfectly well that getting good value for money depends on looking at the quality of the product as well as the price. But they fail to apply this in financial products because it’s difficult to figure out which features of the product are really important.”

Pure price comparison sites, he says, suffer from the lack of evaluation of important product features as well as their commercial basis which depends on driving traffic to providers who pay.

“Independent comparison in financial products was the role of newspapers for many years,” he says, “But most media owners now prefer generating revenue by ‘white labelling’ price comparison engines into their own websites to the arduous task of compiling independent Best Buys.”

“Genuine Best Buy comparisons are an art rather than a science because for each type of product there are certain features that are far more important than others and which should therefore be rated more heavily in the evaluation process.”

Product providers prefer gimmicks and complexity because they make it harder to evaluate a product. Providing huge lists of product features that accommodate all this complexity is not helpful to the average consumer, who just wants to know which four or five products he should actually consider in detail.

“The internet provides more information than most consumers can use in selecting financial products. An independent Best Buy service should aim to keep it simple and just select the best based on the most important features and costs of the products.”

He adds that the databases used for price comparison were invented for product providers rather than for consumers and that most search engines built around them are a very inferior substitute for the knowledge of an expert.

“It may be very useful to the marketing manager of a mortgage lender to be able to survey 5,000 mortgage offers but the idea that this has any value for the consumer is laughable. In the case of Best Buy selections, less is more.”