The ratings are designed to address consumers’ lack of understanding about product features and help them choose on this rather than just cost.
The research firm said 23% of people are worried about purchasing a financial product that is not right for them while 49% do not necessarily understand the features of products they own.
The firm said: “Price will always play an important role in consumers’ decision making.
“However a feature-led approach to product development and marketing by product providers and advice by intermediaries is likely to result in a better match between what someone needs from a financial product and the product they end up buying.”
The star ratings provide an independent assessment of all products across more than 40 different product types within the following areas:
• Mortgages
• Life and protection
• Credit cards
• Current accounts
• General insurance – including home and motor insurance, as well as commercial insurance for small and medium sized enterprises
• Pensions and investments
Taking a wide range of features and benefits into account Defaqto has given each product a rating from 1 to 5 depending on how comprehensive they are.
David Cartwright, Defaqto’s head of insight, said: “It is essential that consumers match the features and benefits they need with those provided by the products they choose.
“If people 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.”
