Data and research provider Defaqto, which provides the Engage Financial Planning software system, has added star and diamond ratings for AIM and unlisted business relief (BR) services to its product ratings. 

The move follows Defaqto’s acquisition of tax-advantaged investments specialist MICAP in July last year.

It then introduced star and diamond ratings for EIS (Enterprise Investment Scheme) funds and VCTs (Venture Capital Trusts) in November. 

Investments into AIM and unlisted BR services are intended to qualify for business relief (subject to the minimum holding periods and any excepted assets), which means that the entire investment can fall outside an investor’s estate for inheritance tax purposes.

The new ratings use MICAP’s data on the tax-advantaged market and apply Defaqto’s methodology to assess quality and performance. 

The MICAP platform is used by more than 1,000 IFA and wealth management firms and provides advisers with independent information on EIS, SEIS, VCT and BR products, as well as digital application forms and post-investment consolidated reporting. 

Defaqto said a product’s star rating is a measure of the quality of features while a diamond rating is an indication of product performance. The two ratings can help advisers and consumers assess products at-a-glance, it said.

John Milliken, chief executive of Defaqto, said: “By combining Defaqto’s technology and understanding of Financial Planners’ needs with MICAP’s specialist data, we will help advisers when they discuss tax-advantaged investment options with their clients, and also when they evidence their recommendations.”

He said the firm’s ratings for EIS and VCT had been well received since being introduced in November.