Customer Friendly Principles and Practices of Financial Management meaning

Customer Friendly Principles and Practices of Financial Management (often called the consumer-friendly PPFM or CFPPFM) describes the plain‑English summary that a with‑profits life insurer gives policyholders explaining how its with‑profits fund is run. In the UK it is required by the FCA Handbook (COBS 20) and must fairly summarise the firm’s PPFM, covering, among other matters, the exercise of discretion, bonus setting, smoothing, investment strategy and risk, charges and expenses, business mix, use of the inherited estate and governance (including the roles of the With‑Profits Actuary and With‑Profits Committee). It is a communications document rather than a contractual or statutory instrument, but it is routinely relied upon in regulatory reviews, FOS complaints, litigation about treating customers fairly, and in transactions such as Part VII insurance business transfers and due diligence. Across England & Wales, Scotland and Northern Ireland usage and regulatory basis are consistent. In Ireland, while there is no identical defined term in legislation, many with‑profits providers publish comparable “customer‑friendly” summaries of their PPFM to meet Central Bank of Ireland supervisory expectations and consumer protection standards.