The Most Recommended Finance Products

By Neil Faulkner (TMFVertigo)
June 22, 2006

This company is simply amazing! It consistently offers competitive deals on all its products, it's easy to contact and to maintain my account, it provides great quality service, it doesn't try to stitch me with the small print, and what's more it's ethical.

That's not fair. I really shouldn't tease you like that! When you find a company which can be described like this, please let me know. In the meantime, I've done some digging to see if it's possible to find companies that are highly rated by their customers whilst also offering good products.

Let's start with insurance. It's a big area, so I'll stick with the controversial area of car insurance. I've collated data from the Review Centre, which collects customer reviews. It's interesting, because the data shows that the more reviews received, the lower the overall rating given by customers. You could argue that this means smaller companies, which have fewer customers and therefore fewer potential reviews, offer a better quality service.

However, this is at odds with some of the providers that got 10/10 with only one vote, like the RAC, Swintons and Saga, who are all relatively big companies. Conversely, Direct Line and Hastings Direct both got 22 reviews, and there scores were a pathetic 4.5/10 and 2.4/10 respectively. Tesco had 34 reviews and a score of just 3.1. This pattern of the more votes, the lower the rating was fairly typical throughout the whole list of insurers.

What does this tell us? Individually, there aren't enough votes for us to make a sound decision on any one insurer, but collating all the votes and voting patterns, it's significant that people generally aren't happy with insurance companies as a whole. Positive reviews were about price and general service. Negative reviews were about the claims process, i.e. when the customer actually needed assistance. On this evidence, it would appear there's a problem with the mass-produced system of car insurance as a whole.

Insurance companies are more distinctly contained within their field than many other providers. Now that I turn to look at other areas for customer reviews, I find it impossible to separate banks from credit card companies, mortgage providers, personal loan providers and so on. They all offer the same services.

I got customer review data on these big, omnipresent companies from Ciao! Shopping Intelligence. Again, I found the more reviews, the worse the score. Looking at banks, all the customers who received five stars (full marks) had received just one review each. Of the top fifteen banks by average consumer rating, nine of them had no more than five reviews.

Out of the remaining six, only two had more than thirty reviews, but their results are quite surprising. First Direct had an excellent four-and-a-half stars with a statistically significant 120 votes. Reviewers said they found Internet banking with First Direct to be quick and easy. They also said the bank provided good customer service, especially when you call them.

Smile did even better with four-and-a-half stars from 133 votes. Reading the reviews, it seems most people liked its easy, fast, online banking, plus they claimed that staff were friendly and efficient. Others considered Smile to be ethical.

Both these banks offer decent rates on interest on their current accounts and savings accounts. So it seems it is possible then to get both good financial deals and quality service!

The Cooperative Bank also did well with a creditable four stars, based on 46 votes. The reviews were similar to Smiles', which perhaps shouldn't be surprising, as Smile is a subsidiary. It's the same story with HSBC, which owns First Direct. HSBC has four stars too, this time from 230 reviewers.

The Cooperative Bank has two attractive credit cards, one of which has a 0% deal for seven months on both purchases and balance transfers, with the now standard 2% fee on transfers. HSBC has the same deal, albeit for six months, not seven.

Royal Bank of Scotland also got four stars with 79 votes. Overall, the reviews seemed positive about its service. However, comparing its products with the rest of the market using The Fool's product comparison search engine, there are no deals on any of its products that are at the top of the market.

In all the customer review data I sifted through, the only non-bank with significant votes was Egg, which had 174. This credit card provider scored highly with four stars. Reasons for awarding high marks ranged from the card being 'pretty' to the attractive interest rates. Only occasionally were they voted highly because of helpful staff, but I suppose this is less important for credit cards than banks.

Egg's promotions have gradually been slipping in quality, but you can still get a card that offers 0% on both balance transfers and purchases for six months, which seems to be more and more typical, as this article shows. The balance transfer fee, however, is slightly high at 2.5%.

We at The Fool have said before that loyalty doesn't pay. To keep getting good deals, we must switch our bank accounts, mortgages, insurance providers, and all our other financial products. It's usually at the point of switching that we most want good service, so it's worth bearing the companies I've identified in mind when you're looking through our comparison tables for the best deals.

Use the Fool to compare current accounts, compare savings accounts and compare credit cards.