Each of the big four banks is having difficulty cross-selling superannuation to their customers as shown by the fact that each is capturing less than 20% of their customers’ superannuation balances. These are the latest findings from the Roy Morgan Research Consumer Single Source survey of approximately 50,000 interviews per annum.
Share of customers’ superannuation wallet
Of the four major banking groups, the best performer in terms of the share of their customers’ superannuation wallet held, is the NAB Group with 18.4%. This is down from the 20.5% held in 2010 but still remains ahead of the CBA Group (13.2%), Westpac Group (13.0%) and ANZ Group (10.4%).
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 is no overall trend in the cross-sell performance of the big four with regards to superannuation over the last four years. Westpac and the CBA have shown small improvements (Westpac Group + 1.7% points and CBA Group +0.5% points), while ANZ and NAB have shown some losses (ANZ Group down 0.7% points and NAB Group down 2.1% points).
Competition for the big four banks customers superannuation
The major competition for each of the big four banks is industry funds which hold around 25% of each banks customers superannuation wallet. This figure ranges from 23.4% for the NAB Group to 28.0% for the CBA Group and this proportion has increased for each of the big four banks over the last four years.
The largest individual competitor for these major banks is the AMP which holds around 6% of the superannuation balances for each, ranging from 5.8% for the NAB Group to 6.8% for the ANZ Group.
Share of customers’ superannuation wallet and major competitors for the big four banking groups
Source: Roy Morgan Research Consumer Single Source, 12 months to July 2014, n=33,812. NB: Groups include subsidiaries
There is limited loyalty to the major banks with around 10% of each bank’s customers’ superannuation balances held at one of the other big four banks. This ranges from 8.7% for the NAB up to 11.9% for the ANZ. The remainder of the balances are held by self-managed funds, other retail funds and public sector funds.
Norman Morris, Industry Communications Director, Roy Morgan Research, says:
“With over $1.8 trillion held in superannuation, competition in this market is going to be tough for the superannuation balances held by customers of the big four banks. Where the major banks have their traditional strength is in banking products such as home loans, cards and deposits but they are facing much stronger competition with superannuation where they are up against specialist providers.
“Although the major banks either own or have ties to a large proportion of financial planners, when it comes to superannuation it appears from our research that the clear majority of employees take out their superannuation through their employer rather than a planner. The role of the employer has obviously given impetus to the strength of the industry funds whose gains appear to a large extent to come from people switching jobs.
“Satisfaction with financial performance of superannuation has a big impact in this market with the highest satisfaction clearly being given by those people running their own self-managed funds. The rapid growth seen in self-managed funds is a major threat to the retail funds and is an area where accountants rather than planners play a major role.
“The Interim Report of the Financial System Inquiry observed that for superannuation, ‘operating costs and fees appear high by international standards’ and if this remains an area of focus in the final report, competition is likely to intensify further. With increasing balances also likely to attract more competitors and attention on fees, performance and their disclosure, competition between banks and their specialist competitors in superannuation is likely to remain a problem for improving cross-sell in this market.”
Roy Morgan Research
Roy Morgan Research is Australia's best known and longest established market research and public opinion survey company. Roy Morgan Single Source is thorough, accurate, and provides comprehensive, directly applicable information about current and future customers. It is unique in that it directs all the questions to each individual from a base survey sample of around 55,000 interviews in Australia and 15,000 interviews in New Zealand annually - the largest Single Source databases in the world. The questions asked relate to lifestyle and attitudes, media consumption habits (including TV, radio, newspapers, magazines, cinema, catalogues, pay TV and the Internet), brand and product usage, purchase intentions, retail visitations, service provider preferences, financial information and recreation and leisure activities. This lead product is supported by a nationally networked, consultancy-orientated market research capability.
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