Investment manager

A PPLI structure separates ownership from management. The insurer holds legal title to the assets, a custodian keeps them, and the investment manager decides what to buy and sell. The manager can be a private bank or asset manager the family already knows, appointed for the structure with the insurer's approval.

How it works

• Appointment. The insurer approves the manager and signs an investment management agreement with it, setting the mandate, the eligible assets and the reporting.
• Discretion. The manager holds genuine discretionary authority for the life of the structure and chooses the investments within the mandate.
• Objectives. The policyholder can express preferences on asset allocation, set a risk appetite and investment objectives, and review performance with the adviser.
• Oversight. The manager is regulated in its own jurisdiction and reports to the insurer, which monitors the mandate and approves any change.

Why the manager holds the discretion

The tax treatment of a PPLI structure rests on the insurer owning and controlling the assets. Under the US investor control doctrine, a contract holder who selects investments or directs trades can be treated as owning them and taxed on the income each year. In Webber v Commissioner (2015), the US Tax Court did so where the manager acted as a rubber stamp for the investor's recommendations; his grantor trust held the policies.

In the UK, HMRC's guidance is that where the insurer appoints an investment adviser under its own agreement, the adviser acts as the insurer's agent, and the arrangement is generally outside the personal portfolio bond rules. A mandate so narrow that the policyholder is in effect choosing the assets can change that.

In practice

The manager is agreed in the first weeks of implementation, alongside the insurer, tax counsel and the trustee. The insurer appoints it when the structure is issued and the segregated account is opened with the custodian. From then on the manager reports to the insurer, performance is reviewed quarterly, and any change of manager or mandate goes through the insurer.

In a PPLI structure

The manager's mandate can cover listed securities, insurance dedicated funds, private equity, private credit, property and digital assets, within the insurer's approved asset classes. A family with an existing portfolio can transfer it as a premium in specie, and the manager takes it over under the mandate.

Common questions

Can I choose my own investment manager for PPLI?

The policyholder can propose a manager, or choose from managers the insurer offers, and the insurer decides whether to approve and appoint it. Under the US safe harbour in Revenue Ruling 2003-91, the choice of manager is the insurer's alone. Once appointed, the manager works under its agreement with the insurer and keeps discretion over the portfolio.

Can the policyholder talk to the investment manager?

The policyholder can discuss objectives, risk appetite and performance. Under the US safe harbour in Revenue Ruling 2003-91, the holder does not communicate with the manager about specific investments, or with the insurer about the choice of manager.

Go deeper: how PPLI works.

Sources

• IRS Internal Revenue Bulletin 2003-33: Rev. Rul. 2003-91 (investor control safe harbour)
• Webber v. Commissioner, 144 T.C. 324 (US Tax Court, 30 June 2015)
• HMRC IPTM7725: investment advisers appointed by the insurer
• HMRC IPTM7730: when an adviser arrangement may still be a PPB

Last reviewed November 2026.