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.

 

RELATED ARTICLES

Reputations hit hard at the Royal Commission

banner

Most viewed in recent weeks

Which generation had it toughest?

Each generation believes its economic challenges were uniquely tough - but what does the data say? A closer look reveals a more nuanced, complex story behind the generational hardship debate. 

100 Aussies: seven charts on who earns, pays, and owns

The Labor government is talking up tax reform to lift Australia’s ailing economic growth. Before any changes are made, it’s important to know who pays tax, who owns assets, and how much people have in their super for retirement.

The best way to get rich and retire early

This goes through the different options including shares, property and business ownership and declares a winner, as well as outlining the mindset needed to earn enough to never have to work again.

A perfect storm for housing affordability in Australia

Everyone has a theory as to why housing in Australia is so expensive. There are a lot of different factors at play, from skewed migration patterns to banking trends and housing's status as a national obsession.

Chinese steel - building a Sydney Harbour Bridge every 10 minutes

China's steel production, equivalent to building one Sydney Harbour Bridge every 10 minutes, has driven Australia's economic growth. With China's slowdown, what does this mean for Australia's economy and investments?

Supercharging the ‘4% rule’ to ensure a richer retirement

The creator of the 4% rule for retirement withdrawals, Bill Bengen, has written a new book outlining fresh strategies to outlive your money, including holding fewer stocks in early retirement before increasing allocations.

Latest Updates

Economy

The ‘priced out generation’ and what they should do about it

A fiery interview on housing exposed deep generational divides, sparking youth outrage and political backlash. As homeownership drifts out of reach, young Australians face a choice: fight the system - or redefine success.

Taxation

Maybe it’s time to consider taxing the family home

Australia could unlock smarter investment and greater equity by reforming housing tax concessions. Rethinking exemptions on the family home could benefit most Australians, especially renters and owners of modest homes.

Superannuation

Meg on SMSFs: Ageing and its financial challenges

Ageing SMSF members can face issues funding their pension income as cash reserves dwindle. Potential solutions include involving adult children in contributions to secure future financial stability.

Economy

US earnings season was almost too good to be true

The second quarter US earnings season has wrapped up, with a record 82% of S&P 500 firms beating earnings estimates. As tailwinds fade, Q3 may reveal whether AI momentum can offset rising economic headwinds. 

Gold

Does gold still deserve a place in a diversified portfolio?

9,000 years and no devaluations later, gold is the world’s most enduring store of value. It remains attractive as the value of several paper currencies, including the US dollar, are threatened by deficits and rising debt.

Shares

Checking in on the equity market's silent engine

Consumer spending directly impacts corporate earnings, sector performance and market sentiment. The latest data from different economies uncover risks and pockets of opportunity for investors.

Fixed interest

6 key themes driving bond markets

The Fed could soon be prompted to join other central banks in cutting interest rates. This would have ripple effects across global fixed income markets and provide an especially attractive backdrop for emerging market bonds.

Sponsors

Alliances

© 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.