Discretionary managed allocation (life insurance)
A way of managing a life insurance contract or retirement savings plan in which the policyholder delegates switches between funds to the insurer or an asset manager, according to a risk profile.
In a multi-fund contract, someone must decide the split between the euro fund and unit-linked funds, then adjust it. Under self-directed management, it is the policyholder. Under managed allocation, the policyholder signs a switching mandate delegating these decisions to the insurer or an asset manager, choosing a profile, cautious, balanced, dynamic. The manager then makes switches without consulting the policyholder, within that profile. In the retirement savings plan, horizon-based managed allocation is the default option set by law: savings are invested dynamically while retirement is distant, then gradually de-risked as it approaches, following a de-risking glide path. This management mode raises three questions. Cost, since delegation often adds mandate fees to those of the funds. Suitability, since the chosen profile must match the policyholder's situation and objectives, which the duty to advise requires checking. And liability: an agent who departs from the agreed profile is liable, but disappointing performance within the agreed profile is not a fault. The formula's success rests on a constant observation: most savers never switch.
Hypothetical case: a 30-year-old employee opens a PER with horizon-based managed allocation, balanced profile. Savings are invested 80 percent in equities; from age 50, the insurer gradually reduces this share, which will be only 20 percent two years before retirement.
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