Rowena Chan

Insurance Portal has learned that Sun Life Financial will be reviewing the way it compensates its exclusive advisors.

Rowena Chan, President, Sun Life Financial Distributors (Canada), and Senior Vice- President, Distribution told Insurance Portal that these changes will take effect in April 2023. 

Sun Life said that to respond to its clients’ changing needs, it constantly assesses its business model. “This includes reviewing our advisor compensation structure to ensure we have a fair, transparent and responsive system in place for our clients,” Chan said. 

She adds that the new compensation model “will help all advisors, both new and long-time, to provide reliable advice to clients.”

The compensation model review is completely unrelated to the April 2022 launch of Sun Life's online sales platform ProsPr, Chan points out. 

Growth and sustainability 

Rowena Chan says the change will better align compensation with the sustainable growth of her advisors’ businesses. “The revised program will allow us to deepen relationships with our clients and create a sustainable business model for many generations of advisors to come,” she says. 

The revised model will “better attract talent and support new advisors,” she continues. 

Chan also wants to encourage a holistic advice approach (covering the full range of client needs). “The revised compensation structure will provide more value and benefits to advisors and clients. It will allow us to reward advisors who help clients with their holistic needs,” she says. 

Commission spared 

Commissions will remain in place. “There are no changes to the commission. The compensation structure will continue to be aligned with ongoing needs to provide clients with an appropriate level of service,” she explains. 

The exclusive advisors in the Sun Life Financial Distributors network have long been compensated by level annual commissions, a system adopted from Clarica (Mutual Life of Canada) after the insurer acquired the company in 2001. In Canada, the high and low commission predominates; the level commission model is rare. In the high and low model, advisors receive a high commission on the sale of a life insurance product, and a lower renewal commission paid over a number of years. 

Compensation under pressure 

In recent years, financial advisors’ compensation model has been facing more pressure than ever. On June 1, 2022, the ban on deferred sales charges and trailer fees for mutual funds will come into effect. In February 2022, Canadian regulators asked insurers to eliminate deferred sales charges from segregated funds. In April 2022, regulators called for disclosure of total fees and charges for mutual funds and segregated funds.