Who is Defaqto? And what does a Defaqto 5 Star Rating mean?

Who is Defaqto?

Defaqto is an independent research organisation whose role is to analyse financial products and generate intelligence needed to facilitate better informed decision making for employers, advisors and consumers. They have the UK's largest retail financial product and fund database, which is continuously maintained through collating data from across the whole of the market, of which they then apply their expertise and intelligence, to analyse the data and make it easily comparable via their products and services such as their Star Ratings. This allows Defaqto to deliver their information in a meaningful way to potential customers looking at a product's key features and benefits, thus allowing them to make a better, informed decision as to whether or not to purchase.

Being independent, Defaqto is impartial and rates solely the proposition, not the company or provider of the proposition in question. This year, Defaqto launched the Auto Enrolment Star Ratings, with the intention of assisting advisors and employers to navigate the fast growing auto enrolment market as a result of revolutionary changes to workplace pensions in the UK.


Defaqto independently rates products across more 60 categories, and where products and services are rated between 1 and 5 stars. A product with a 1 Star rating is considered 'a basic product, with a low level of features and benefits' whilst a product with a 3 star rating is considered to be more of a standard product that provides an ‘average level of features and benefits'. A product with a 5 star rating is considered by Defaqto to be an

'excellent product with a comprehensive range of features and benefits'.

We are proud to say that Smart Pension has obtained a Defaqto 5 Star Rating for Auto Enrolment (Trust-Based Schemes)

What does the Defaqto 5 Star Rating mean?

  • 1. For Employers

    Employers The Defaqto Star Rating instantly communicates visually, the quality of a company's product or service proposition, whilst also relaying a strong, signal of trust and confidence. It gives employers assurance as well as a better understanding of what they are buying and why that product might be the best product for their company or clients. This is particularly helpful with products and services that an employer might not be particularly familiar with, such as auto enrolment workplace pensions.

    Looking for an auto enrolment pension provider is not quite the same as shopping around for a stationary supplier or a venue for the next conference or staff party. Whilst smaller, perhaps one-off, non-contractual purchases are often compared on price, and where price is often one of the primary factors (if not the primary) when it comes to decision making (see the Smart Pension fees and charges comparison table comparing Smart Pension with some of the other big auto enrolment workplace pension providers in the marketplace such as Nest and Now: Pensions).

    Financial products and services, especially if it involves long term contracts or on-going costs, often warrants a need for a much deeper understanding of not only the main features and benefits that will satisfy (or not) an employer's needs and/or any legal requirements in order for compliance, but the often more intricate (sometimes hidden) details and clauses that may be a cause for concern, especially if it has the potential to materialise as a nuisance, big or small, such as being tied into long-term contracts, on-going fees, penalties etc.

    We understand why price is so often used as a point of comparison and why it's the reason why one product or service is chosen over another, and that's mainly due to convenience, be it of ease, accessibility or time efficiencies. It's much more difficult to compare products based on their features and benefits as it's not so easily quantifiable. That's where the Defaqto Star Ratings comes into play. Employer's can instantly see where a product or service proposition ranks in terms of it's competitors (see the Defaqto Star Ratings page for Auto Enrolment Trust Based Schemes ) and the rest of the market, which can be a very crowded and saturated place, or in the case of auto enrolment, a relatively new yet fast growing one, based on the adequacy of the proposition's key features and benefits. It also enables employers to be able to better sell the product to their employees, who may have even less of an understanding and knowledge of the product in question and will want to be assured that their employers have their best interests in mind.

    Employers who choose to auto enrol their business with Smart Pension can have the confidence of a 5 Star Defaqto backing of excellence (see announcement of Defaqto 5 Star Rating award), knowing that the proposition provides a comprehensive range of features and benefits, whilst also meeting the additional minimum criteria in certain areas.

  • 2. For Advisors

    Advisors Defaqto provides solutions to a full spectrum of advisory businesses, from small, individual advisors and practices to much larger, networks and nationals in order to support them in their role of client handling. Defaqto understands that it is a wide, vast and complex marketplace out there and more often than not, it can be a bit of a minefield with multiple brands, companies and propositions all vying for attention. For auto enrolment, it's a relatively new market place but nonetheless a rapidly, fast growing one, which is having a huge impact on every UK employer in the country.

    Here are some of the main reasons why the Defaqto Star Ratings are beneficial for advisors:

    The Defaqto Star Ratings is a well renowned, ratings mechanism and is a much trusted industry standard, summarising their extensive findings and their wide reach through a stringent assessment whilst using a consistent, methodical approach to help advisors to sift quickly and efficiently through the market, in order to find the right proposition that will best suit their, often many, client's needs.

    Through the Defaqto Star Ratings, Advisors can, at a quick glance, see where a proposition sits in the market in terms of the quality that it offers and therefore spend less time on the hunt and more time focusing on their client and making sure that their needs are met. It enables you to quickly and effectively communicate the quality of the product to your client thus facilitating new business acquisition and supporting customer retention.

    The Defaqto Star Ratings will give clients post - recommendation assurance about the level of quality of the product or service that has been recommended for them and support them in their decision making process by clearly differentiating a proposition on the basis of the whole product offering rather than just the cost of the product.

    Advisors can be confident in the quality proposition of Smart Pension auto enrolment platform. With a Defaqto 5 Star Rating, Smart Pension proudly offers the highest quality product with a well thought out, relevant and comprehensive range of features and benefits.

  • 3. For Employees

    Keeping employees informed smart pension Employees can rest assured that if their employer has selected a product with a high Defaqto Star Rating, then their employer has taken into consideration the reliable and impartial approach that Defaqto uses to quickly assess the huge marketplace and rate it impartially, solely on the quality of the key features and benefits that the product provides in comparison to the products that are available on the market. For employers that have chosen a product with a Defaqto Star Rating of 4 or 5, employees can be confidant that the product that has been chosen for them, is one of the best and competitive product offerings in the market when it comes to the quality of the features and comprehensiveness.

    For those whose employers have auto enrolled with Defaqto 5 Star accredited Smart Pension, you can have peace of mind that Smart Pension provides the best quality workplace pension offering in the auto enrolment market.

    Feel ready to get the ball rolling? To sign up your company or your clients with Smart Pension, please click here. You could be compliant within a matter of minutes and at absolutely no cost to your business, and rest assured, you'll be enrolling with a company offering one of the most comprehensive auto enrolment products on the market, and one that has been awarded a Defaqto 5 Star Rating of excellence.

    If you still have questions about auto enrolment and how to get started, please don't hesitate to get in contact with us today. Call us on the number below or request a call back here.

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