Sub-par performances in the wealth management sector have damaged consumer loyalty to Australia’s Big Four banks, a new survey reveals.
The latest Roy Morgan Consumer Single Source Survey found that the Big Four banks were “currently only holding around one third of their customers’ potential dollars”, despite strong performances by their traditional deposit and loan products.
The survey found that the Commonwealth Bank of Australia had the highest share of customers’ deposits, with 60.3 per cent of their clients’ accounts, and 56.4 per cent of their loans, but only 13 per cent of their wealth management products.
Roy Morgan Research, industry communications director, Norman Morris, said that their performance over the last decade showed there was “still a big opportunity for growth” in the deposits and lending categories, “as they are still only achieving around half of their customers’ business”.
“This indicates a lack of loyalty to the major banks by their customers, probably due to a lack of incentive for them to consolidate and the need to spread the risk,” he said.
“The fact that the major banks hold only around one-third of their customers’ dollars is due to their much poorer performance in wealth management, where they have less than one-fifth of their customers’ balances and have shown no real gains over the last 10 years.
“With superannuation being the major component of wealth management, the big banks are facing tough competition from the trend to self-managed super, industry funds and other specialist providers.
“With funds in superannuation set to reach two trillion dollars in the near future, super is likely to remain an important focus for the major banking groups if they are to retain their traditional position as their customers’ main financial institution.”
