Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 79

Banks' poor cross sell of superannuation

The latest research report by Roy Morgan shows banks have a poor track record in selling superannuation services to their existing retail banking customer base and it may represent a significant opportunity. Australian banks only hold between 13% and 18% of their customers' total superannuation wallet.

Share of customers' superannuation wallet


Source: Roy Morgan Research , 12 months to July 2010 (n=33,901) and 12 months to July 2014 (n=33,812) NB: Groups include subsidiaries.

There are a number of key barriers to overcome if the banks are going to woo their existing retail customers better. Firstly, retail super customers don’t change superannuation providers easily. Secondly, their biggest competitors are the industry superannuation funds which have arguably performed better (even if the overall range of services is not as broad) and advertise very aggressively. Lastly, superannuants with their own SMSF, rightly or wrongly, are generally happy with their decision to 'go it alone'.

So while winning new customers is generally considered harder than cross selling services to existing ones, that might not be the case for superannuation. Most Australian retail superannuation holders remain disengaged from their superannuation and do not even bother to make an active choice about which fund (or which product) their contributions should be paid into. The speculated reasons for this are many and varied and include the lack of availability of independent, comparable superannuation fund performance and fee data.

But given the low penetration levels of banks into their customers superannuation wallet, the size of the prize might be worth it.

Interestingly, previous research by Roy Morgan (click here) showed banks hold a better track record the other way around, in providing banking services to their existing superannuation customers.

For example Westpac holds the lowest percentage at 13% of its customer’s total superannuation wallet, of the big four banks. But of the superannuation wallet that it does hold, around 60% of these superannuation customers have a banking product with Westpac.

The research report also shows industry super funds hold the single biggest share of banks customers’ superannuation wallet averaging around 25%.


Source: Roy Morgan Research Consumer Single Source, 12 months to July 2014, n=33,812. NB: Groups include subsidiaries

The banking sector in general is often criticised for its lack of competition, with the big four banks estimated to own around 80% of the deposits and lending to private households. But the banks have recently engaged in hard-fought customer convenience battles, mainly through their investment in information technology, in order to stay in the game and hold onto their market share. This success in banking services has yet to spill over into the provision of super to bank customers.

 

Les Goldmann has over 20 years experience as a Chartered Accountant. His other roles have included journalism, working as the policy and research manager for the Australian Shareholders Association and senior positions in the commercial and non profit sectors.

 

  •   9 September 2014
  • 1
  •      
  •   

RELATED ARTICLES

Reputations hit hard at the Royal Commission

banner

Most viewed in recent weeks

Warren Buffett's final lesson

I’ve long seen Buffett as a flawed genius: a great investor though a man with shortcomings. With his final letter to Berkshire shareholders, I reflect on how my views of Buffett have changed and the legacy he leaves.

13 ways to save money on your tax - legally

Thoughtful tax planning is a cornerstone of successful investing. This highlights 13 legal ways that you can reduce tax, preserve capital, and enhance long-term wealth across super, property, and shares.

The housing market is heading into choppy waters

With rates on hold and housing demand strong, lenders are pushing boundaries. As risky products return, borrowers should be cautious and not let clever marketing cloud their judgment.

Why it’s time to ditch the retirement journey

Retirement isn’t a clean financial arc. Income shocks, health costs and family pressures hit at random, exposing the limits of age-based planning and the myth of a predictable “retirement journey".

Taking from the young, giving to the old

Despite soaring retiree wealth, public spending on older Australians continues to rise. The result: retirees now out-earn the young, exposing structural flaws in the tax system and challenges for fiscal sustainability.

Welcome to Firstlinks Edition 637 with weekend update

What should you do if you think this market is grossly overvalued? While it’s impossible to predict the future, it is possible to prepare, and here are three tips on how to best construct your portfolio for what’s ahead.

  • 13 November 2025

Latest Updates

Investment strategies

Howard Marks: AI is "terrifying" for jobs, and maybe markets too

The renowned investor says there’s no shortage of speculative investors chasing AI riches and there could be a lot of money lost in the process. His biggest warning goes to workers and the jobs which will be replaced by AI.

Property

The 3 biggest residential property myths

I am a professional real estate investor who hears a lot of opinions rather than facts from so-called experts on the topic of property. Here are the largest myths when it comes to Australia’s biggest asset class.

Retirement

Australia's retirement system works brilliantly for some - but not all

The superannuation system has succeeded brilliantly at what it was designed to do: accumulate wealth during working lives. The next challenge is meeting members’ diverse needs in retirement. 

Retirement

Retirement affordability myths

Inflated retirement targets have driven people away from planning. This explores the gap between industry ideals and real savings, and why honest, achievable benchmarks matter. 

Retirement

Can you manage sequencing risk in retirement?

Sequencing risk can derail retirement, but you’re not powerless. Flexible withdrawals, investment choices and bucketing strategies can help retirees navigate unlucky markets and balance trade-offs.    

Retirement

Don’t rush to sell your home to fund aged care

Aged care rules have shifted. Selling the family home may no longer be the smartest option. This explains the capped means test, pension exemptions and new RAD exit fees reshaping the decision.

Shares

US market boom-bust cycles - where are we now?

This gives comprehensive data on more than 100 years of boom and bust cycles on the US stock market - how the market performed during these cycles, where the current AI uptick sits, and what the future may hold.

Property

A retail property niche offers a lot more upside

Retail real estate is outperforming as a cyclical upswing, robust demand and constrained supply drive renewed investor interest. This looks at the outlook and the continued rise of convenience assets. 

Sponsors

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.