Why iselect.com.au and other comparison sites aren’t that great
How do you make the right choice?
We have too much choice. And it can be paralyzing.
You want to open a bank account. Who do you choose? Big 4 banks? Credit union? Who has the best deal? Where can I withdraw my money?
It can turn your mind in an endless loop; you can spend hours thinking and researching and not making any decisions.
This is where a comparison site might come in.
Comparison Sites – make an informed decision
There are a bunch of comparison sites now.
If you want a new bank account or credit card, need to book a flight etc. you can search the internet and there will be a site (or a number of sites) that lists the options and costs in one place so you can make an informed decision.
Or can you?
Well, it depends which comparison site you look at.
Why do they exist? Commission
While there may be comparison sites that exist simply to better inform consumers, most comparison sites exist to get commission if people sign up through their website.
The Murphy’s Law in trying to make money from a comparison site is:
If the deal is really fantastic, then the commission for signing people up will be lower (or nil).
The best comparison sites include all different options and they just hope you will pick something that gives them a good commission.
The other comparison sites may just offer the options that make them commission (or companies that they have an agreement with). Although, to be fair, it would be hard work to list (for example) EVERY single bank account.
Is it fair that websites earn commission?
Some people aren’t happy to have a website earning money if they decide to signup for a new credit card.
However I think that given that the website has gone to all the work to create a comparison site, if I make a decision through their site then I think they are entitled to a commission (particularly if it doesn’t cost me anything).
Although obviously, if a comparison site put me onto a deal that isn’t half as good as what I could have got, I would be pretty annoyed.
Below is a look at 2 major comparison sites.
Recently while looking to set up a new bank account, my wife and I looked at the Cannstar website.
Cannstar, from my quick look into it, seems to be setup by a banking type organisation and has support and funding from heaps of banks.
This isn’t something that operates out of someone’s backyard.
But the problem with Cannstar is that not all the information was correct.
It was 95% correct, but if we were considering a bank in terms of the overseas ATM fee, then what they include should be correct.
We were also looking at changing private health insurance.
The iSelect website seemed quite good. I had respect for them due to their advertising (obviously advertising has nothing to do with the actual service, but sometimes I get fooled into thinking a good ad means clever people are working there as well).
iSelect only compares the health funds they act for.
iSelect admit this on their site here:
So some of the biggest health providers (including BUPA, HBA, HBF, Medibank Private) are not included in iselect.com.au, Which in my mind, is like having a bank comparison website that doesn’t include Commonwealth Bank and ANZ. This is okay, but surely not as ‘fair’ as they advertise to be.
I suppose that if it was mentioned in their advertising that they only compare “some” health fund providers, you probably wouldn’t go to the website.
Should I still use comparison sites?
I think comparison sites are a fantastic resource, but they should be used with caution and you should do your own research and check out the details yourself for choices you are considering.
A good comparison site might help you to narrow the list to a few options and then that can make the process of picking a bit easier.
3 tips for choosing and changing to something new
Starting something new is hard. It shouldn’t be but it often is. Humans fear the unknown and are more likely to stick with the known. A few tips or things to remember are:
1. Try it for a year
Remember that the change doesn’t have to be permanent. If you change bank accounts, tell yourself you will try it for 1 year, then re-assess whether the account is working.
Knowing that I am only ‘trying it’ for a year, helps me get over the hurdle of trying something new.
2. Look for something better – not perfect
The change doesn’t have to be perfect. You don’t have to have the perfect bank account. You just have to pick something that is going to be better than what you currently have.
3. There is a reason you wanted to change
Obviously you could fall in a heap and decide that it is too hard to make a decision and stay with what you already have. But if you want to make a change, I’m guessing there is a reason. Focus on that reason (ie. now I am paying bank fees of $5 a month; I want an account with bank fees of $2 or less a month).