The management mandate (mandat d'arbitrage) is the legal foundation of all managed portfolios in life insurance. It is a contract by which the life insurance policyholder authorises a financial management professional to carry out switches on their behalf, meaning to buy and sell investment options within the policy. By signing this mandate, you delegate investment decisions -- choice of options, allocation breakdown, timing of purchases and sales, periodic rebalancing -- to an asset management company authorised by the French Financial Markets Authority (AMF).
Yet behind this apparent simplicity lies a precise legal framework, governed by both the French Insurance Code (article L132-27-2) and the European MiFID 2 directive (Markets in Financial Instruments Directive). Understanding the rights and obligations of each party, the different forms of mandates and the selection criteria is essential to make the most of this delegation mechanism.
The legal framework of the management mandate
Management mandate vs managed portfolio: a necessary distinction
In everyday language, the terms "management mandate" (mandat d'arbitrage) and "managed portfolio" (gestion pilotee) are used interchangeably, which creates a regrettable confusion. Technically, the management mandate is the legal tool, the delegation contract between the policyholder (mandant) and the manager (mandatary). The managed portfolio is the service offered to the client, the commercial offering built on this mandate.
Every managed portfolio necessarily rests on a management mandate, but not all management mandates are standardised managed portfolios. Some mandates are highly personalised, with a bespoke allocation built after an in-depth meeting between the saver and the wealth manager. Others are pooled, with all clients of the same profile receiving exactly the same allocation.
Obligations of the mandatary
The manager who has received the mandate is subject to strict obligations defined by regulation and case law:
An obligation of means (not of result). The mandatary must deploy all reasonable means to manage the portfolio in accordance with the client's profile and best professional practices. They have, however, no obligation of result: they guarantee neither positive performance nor absence of loss. This distinction is fundamental and often misunderstood by savers. A mandatary cannot be held responsible for a market decline, but they can be held liable if they took excessive risks relative to the client's profile.
Strict adherence to the risk profile. The mandatary cannot take risks exceeding those accepted by the client during the initial profiling. A cautious mandate cannot be invested 80 % in equities, and a balanced mandate cannot contain speculative derivatives. In case of non-compliance with the profile, the mandatary incurs civil liability and may be ordered to compensate the client.
Regular information obligation. The mandatary must provide detailed reporting at least quarterly, including portfolio composition, switches executed during the period, performance achieved in absolute terms and relative to a benchmark, and fees charged. The best mandataries offer monthly reporting accessible online through a dedicated client dashboard.
Pre-contractual advice duty. Before the mandate is signed, the mandatary must conduct a MiFID 2 suitability test to ensure that the proposed service is appropriate for the client's situation: financial knowledge, experience, financial position, objectives, risk tolerance and capacity to bear losses.
Fundamental rights of the mandant (the saver)
As mandant, you retain several fundamental rights that cannot be restricted by any contractual clause:
- Right to revoke at any time: you can terminate the mandate without notice and without exit fees. Management fees cease immediately upon termination
- Right to permanent information: you can request the detailed composition of your portfolio and the transaction history at any time
- Right to withdraw: you can make partial or total withdrawals from your policy, even while the mandate is in force, in accordance with the policy's general terms
- Right to change profile: you can change risk profile at any time, with the mandatary then required to adjust the allocation accordingly
Revoking the mandate: an absolute right
Article 2004 of the French Civil Code provides that the mandant can revoke the mandate at any time. In life insurance, this revocation is free of charge with all online providers (Yomoni, Nalo, Ramify, Goodvest). After termination, your policy automatically switches to self-directed management and you regain control of your allocation. Existing positions are kept as they are; no exit switch is executed automatically. It is up to you to decide whether you wish to keep the allocation put in place by the mandatary or restructure it according to your own choices.
The different types of management mandates
The standardised profiled mandate
This is the most common form, offered by online policies and robo-advisors. The client chooses a profile from 3 to 10 options (cautious, balanced, dynamic, aggressive, etc.) and the manager applies a standard allocation corresponding to that profile. All clients of the same profile have exactly the same allocation and undergo the same switches at the same time.
Worked example: Nadege's profiled mandate
Nadege, 44, project manager in the pharmaceutical industry in Lille, took out a balanced profiled mandate at Nalo 5 years ago, with an initial investment of 30,000 euros and monthly contributions of 400 euros. Her Nalo allocation at 55 % equities consists of:
- 35 % global developed market equity ETF (iShares Core MSCI World)
- 20 % emerging markets equity ETF
- 25 % eurozone sovereign bond ETF
- 15 % corporate bond ETF
- 5 % Generali euro fund
After 5 years, her capital stands at 58,200 euros (30,000 + 24,000 in contributions + 4,200 in net gains), representing an annualised return of approximately 5.8 % net of all fees. The mandatary executed 14 switches over the period, mainly quarterly rebalancings and two tactical adjustments (reducing equity exposure in September 2022, then increasing it in January 2023). Nadege receives detailed monthly reporting but has had no decisions to make, which perfectly matches her desire for simplicity.
Advantages of the profiled mandate: simplicity of setup, reduced fees thanks to pooling (the manager handles a standard portfolio for thousands of clients), complete transparency on the allocation.
Limitations: no personalisation, the allocation does not account for individual specifics (overall wealth, particular projects, tax constraints).
The personalised mandate
Reserved for larger portfolios (typically from 100,000 euros, or 250,000 euros for the most prestigious asset management houses), the personalised mandate offers a bespoke allocation built after an in-depth meeting with a wealth adviser. The allocation takes into account the client's overall situation: property assets, other financial investments, tax regime, marital regime, specific projects, and any ethical constraints.
Houses like Lazard Freres Gestion, Rothschild & Co Gestion Privee or ODDO BHF offer these high-end mandates. Fees are higher (0.50 to 1 % in mandate fees, on top of policy and fund fees), but the personalisation can justify this premium for complex portfolios.
The thematic mandate
Some policies offer targeted thematic mandates allowing the saver to express a conviction or value through their delegated management:
- ISR / ESG mandate: Goodvest (ISR) is the specialist with 100 % Article 9 SFDR management; Nalo offers an eco-responsible profile; Yomoni offers a responsible mandate
- Property mandate: some mandates include a significant allocation to SCPIs and OPCIs (Ramify offers up to 15 % property in its managed portfolios)
- Technology / innovation mandate: Mon Petit Placement offers thematic profiles including innovation and technology funds
The thematic mandate can be combined with self-directed management on the rest of the policy, enabling an original core-satellite approach.
How to choose your management mandate
Evaluate the asset management company
The quality of the mandatary is the most determining criterion. A good mandate poorly executed is worthless. Here are the essential checkpoints:
- AMF licence: the asset management company must be licensed to provide portfolio management services for third parties. Verify on the AMF register (regafi.fr)
- Track record over a complete cycle: analyse historical performance over at least 5 years, ideally including a significant downturn phase (2022). A manager who has only operated in a bull market has not demonstrated their ability to protect capital
- Assets under management: a volume exceeding 500 million euros testifies to investor confidence and ensures the service's sustainability. Yomoni manages over 1.5 billion euros, Nalo exceeds 800 million
- Investment philosophy: ETFs only (Yomoni, Nalo) or selected active funds (Mon Petit Placement)? Quantitative algorithmic or discretionary human approach? Reactive tactical or long-term strategic management?
Compare fees comprehensively
Management mandate fees break down into several layers that add up and whose cumulative impact over the long term is considerable.
| Fee layer | Online mandate (ETF) | Bank mandate (active funds) |
|---|---|---|
| Policy management fees | 0.50-0.60 % | 0.75-1.00 % |
| Management mandate fees | 0.15-0.25 % | 0.25-0.50 % |
| Internal fund fees | 0.15-0.30 % (ETF) | 1.50-2.00 % (OPCVM) |
| Annual total | 0.80-1.15 % | 2.50-3.50 % |
| Impact on 80,000 EUR / 20 years (7 % gross) | ~236,000 EUR | ~147,000-182,000 EUR |
| Difference vs self-directed ETF (0.70 %) | -15,000 to -25,000 EUR | -70,000 to -105,000 EUR |
The gap is striking. On an 80,000 euro investment over 20 years with a 7 % gross return, the online ETF-based mandate results in a final capital of approximately 236,000 euros compared to 147,000 to 182,000 euros for a traditional bank mandate. The difference -- which can reach 90,000 euros -- is exclusively due to fees. This is why the first question to ask is always that of total fees, across all layers.
Analyse reporting quality
A good management mandate comes with transparent, regular and educational reporting:
- Frequency: quarterly at the regulatory minimum, monthly with the best providers (Yomoni, Nalo, Ramify)
- Content: detailed portfolio composition, absolute and relative performance versus benchmark, chronological switch history with rationale, management commentary analysing the market context
- Accessibility: available online through an ergonomic client dashboard, with performance charts, fee breakdown and scenario simulation
Evaluate responsiveness during crises
The true test of a mandatary is their management during periods of stress. The questions to ask:
- What was the mandate's maximum loss in 2022? In March 2020?
- Did the mandatary execute tactical switches during these crises, or did they simply maintain the target allocation?
- Was reporting more frequent during high volatility?
- How did the mandatary communicate with clients during these difficult periods?
Pitfalls to avoid when choosing a mandate
The captive bank mandate
Some traditional banks offer management mandates invested exclusively in in-house funds (the bank's subsidiary asset management company). This captivity reduces diversification and inflates internal fees for the benefit of the banking group. An in-house mandate at 2.5 % total fees should be systematically avoided in favour of an open-architecture mandate based on ETFs, whose total cost does not exceed 1.2 %.
Bank mandates: a trap for savers
According to an AMF study published in 2023, management mandates offered by traditional bank networks charge average total fees of 2.8 % per year, compared to 1.1 % for online provider mandates. Over 20 years, this 1.7 percentage point difference translates into a shortfall of 45,000 to 85,000 euros on an initial capital of 80,000 euros. Moreover, the net-of-fees performances of bank mandates are systematically lower than those of online mandates over 3, 5 and 10-year periods.
Disguised exit fees
Check that there are no fees for terminating the mandate and switching to self-directed management. Most online policies charge none, but some bank policies or insurance networks may charge "mandate termination fees" or "transfer fees". If applicable, these fees constitute a barrier to saver mobility and should weigh in the comparison.
Excessive mandatary inertia
Some mandates execute very few switches (1 to 2 per year), which legitimately raises the question of the service's value added. Check the number of switches carried out over the last 12 months and the justification for each in the reporting. A mandatary who does not even rebalance quarterly is not properly fulfilling their role.
Conversely, a mandatary who switches too frequently (more than 20 times per year) may generate unnecessary transaction costs and suggest a speculative approach inconsistent with a wealth management mandate.
Absence of a benchmark
Every mandate should be evaluated against a clearly defined benchmark. If the mandatary does not communicate their performance relative to an index, it is impossible to judge the quality of their management. A balanced mandate should be compared to a 50 % MSCI World / 50 % Bloomberg Euro Aggregate Bond mix. If the mandate regularly underperforms this simple benchmark, active management does not justify its fees.
Conclusion: a powerful tool, provided you choose well
The management mandate is an effective legal tool for serenely delegating the management of your life insurance to a competent professional operating within a regulated framework. Its value depends entirely on the quality of the mandatary chosen and the fee level. Favour ETF-based mandates to control total fees, verify the manager's track record over at least one complete market cycle including a downturn phase, and ensure that reporting is transparent, regular and educational. Do not hesitate to methodically compare several offerings before committing, and remember that you can terminate the mandate at any time, free of charge, if the quality of service or performance no longer satisfies you.
Disclaimer
The information presented in this article is provided for informational and educational purposes. It does not constitute personalised investment advice. Past performance is no guarantee of future results. All investments carry a risk of capital loss on unit-linked options. Before making any investment decision, we recommend consulting a qualified wealth adviser.