Commonwealth Bank of Australia and its wealth arm Colonial First State have made enhancements to its new low-cost, direct-to-consumer MySuper product in an aggressive bid to sell more services to its corporate customers.
Enhancements to Essential Super will allow the 450,000 small businesses which currently bank with CBA to also use its online and mobile banking site, NetBank, to seamlessly administer, manage and pay employee superannuation contributions in “three clicks and with no paperwork”, according to Colonial First State general manager of product and investments Peter Chun.
“This now means the SME can use their NetBank account to select when they would like payments to be made – set up in advance if preferred. They also have a dedicated helpline for businesses and employees who specialise in superannuation,” he said.
Already around 70,000 personal bank customers have opened an Essential Super account since the product was launched in July with around 4000 new accounts opened each week.
Chun said the bank, in conjunction with Colonial First State, had developed an integrated solution for small businesses with around ten employees, ahead of sweeping superannuation reforms which come into effect on January 1.
“Historically we haven’t had a solution for all bank customers and this is a natural extension,” he said.
He said the group was still committed to its flagship corporate superannuation solution for medium-sized businesses, FirstChoice Employer, which is distribution through financial planners.
“We have over 400,000 corporate superannuation members in FirstChoice Employer and we continue to offer that solution through financial advisers,” Chun said.
The latest enhancements to the Essential Super should see CBA grab a larger slice of the superannuation pie.
Embedded into Essential Super are a number of ‘Lifestage’ default investment options, which are managed by Colonial.
Chun said the key misconception about default super by employers was that they had to make each of the employees bring their own super fund and there was no other option.
“We also found that employers felt somewhat responsible for the performance of the default fund that they would consider putting their staff into. This is part of the rationale for why we have the Lifestage investment options embedded into Essential Super,” he said.
With Essential Super, employees will also automatically be approved to receive death and total permanent disability cover at a level matched to their age.
Chun said enhancements to Essential Super were made in collaboration with the SME sector, with the CBA User Experience team deployed to visit a number of businesses and observe how they set up and paid super for staff.
