What is the point in having 4 Registered Providers?

Duke of Marmalade

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It seems that the Government is keen to have the contract between the punter and a RP. One reason is that in the event of poor market performance there is less political risk. Meaning I presume "don't blame us, blame your RP".

And yet they recognise that over 90% will not chose an RP. These guys will be thrown on the carousel and their RP will tumble out at random, or possibly in sequence. In any event the implicit assumption is that it doesn't matter a damn ex ante who you pick as your RP. And I think we can all agree with that.

Then what pray, is the point of given the punter any choice. Are RPs going to compete for retail customers by shouting about how great their past performance has been? We have agreed that it doesn't matter a hoot. Will it give rise to a need for spurious financial advice?

And then in 20 years time RP1 has been found ex post to be 20% superior to RP4. Hasn't someone who was unlucky enought to get RP4 some basis for querying the original selection process? So much for political risk.

The contract should be between the punter and the CPA. The CPA may of course outsource the admin and investment management to as many parties as it wishes, but please spare the punters any role in that process.
 
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