“We look at strategic asset allocation and the fund’s tactical asset allocation. Something that may seem simple is not as simple as [basic] asset allocation.”
Perhaps something financial advisers may be less familiar with is the fact that Defaqto provides a service for consumers, offering them a view on certain products.
It has a huge database of product details, including bank accounts, pension products and insurance products. In many ways it is similar to comparison sites, except that they do not monetise the data.
Mr Bilgrami says: “We are an information business. I think you run into difficulties if you manufacture a product and rate it as well.”
“We have an excellent relationship with product providers. They understand what we do, and they provide us with information.”
However, other comparison sites still buy Defaqto data, for their own sites.
Mr Bilgrami says: “Comparison sites will buy our data but we don’t tell them pricing information. They get pricing information elsewhere.
“Similarly the providers might call on Defaqto when they are thinking of launching a new product.
“Say you have a self-invested personal pension, and/or a drawdown income product, and we have someone who is thinking of manufacturing a new one, they might call us and ask us what people are doing, and they might share the information and help us understand what other people are doing.
“We store that information on our database.”
It may be for example, establishing where such a product fits into the wider marketplace, and particular features and benefits, such as where the product stands on in-specie transfers for example.
For many years, Defaqto has been in the ownership of private equity, the latest company being Synova Capital.
But last year they concluded that it was time for their exit, and decided to sell the business to SimplyBiz.
“Our business is ringfenced within a larger company. We’re a profitable business and all of the management that was part of the business continues to be part of the team now.
“We reinvest some of our profit into [the business]; a private equity company may have a different view in terms of what they do with the profits rather than a larger listed company.”
Last year, earnings before interest, taxes, depreciation and amortisation for Defaqto, at the time of acquisition, was £5.3m on revenues of £12.8m. The three main directors at SimplyBiz – Matt Timmins, Neil Stevens and Gareth Hague – all sit on the board.
All this points to SimplyBiz planning for a long-term future for one of the most-used data and research companies in financial services.
Melanie Tringham is features editor of Financial Adviser and FTAdviser