What the Sun Life comp change really means (and why it’s not what you think)

Something happened last week that I think most advisors are missing the real meaning of.

Sun Life changed the compensation structure on their early cash value par product.

You probably saw the announcement.

You probably did the math.

And if you did the math, you probably felt that familiar sinking feeling.

Less upfront. Slightly higher trailers. And a payback period that, for most advisors, stretches somewhere between 15 and 17 years.

Fifteen to seventeen years.

Let that sit for a second.

For a lot of advisors, that math simply doesn’t work anymore.

And here’s the thing.

I’m not writing this to bash Sun Life.

I’m really not.

In fact, I think what they did makes complete sense from their perspective.

Let me explain.

Sun Life has been dominating the par space for the last few years.

They built a product that advisors loved to sell. Clients loved the early cash value. The flexibility. The guarantees.

And it worked.

It worked so well that Sun Life became the default for a huge portion of the par market.

But when something works that well, you start to see patterns.

Patterns that, from an actuarial standpoint, become concerning.

Early surrenders.

People accessing cash value faster than expected.

Arbitrage behavior.

And when a carrier sees enough of that, they have two choices:

 1. Ignore it and hope it corrects itself.

 2. Adjust the economics to protect policyholders long-term.

Sun Life chose option two.

And honestly? That’s the responsible move.

If you’re a policyholder who plans to keep your policy for 30 years, you don’t want the economics of your contract being eroded by people who bought it for a quick flip.

So I get it.

I respect it.

But here’s where it gets interesting for advisors.

This isn’t just about one product. It’s about the trajectory of the industry.

Let’s zoom out.

Sun Life is the first major carrier to make a move like this on their flagship par product.

The first.

And if you think the other carriers aren’t watching closely, you’re being naive.

Every carrier is running similar analysis right now.

Every carrier is looking at their own early surrender rates.

Every carrier is asking: “Are we seeing the same patterns?”

Some will say no. Some will say not yet. Some will say they’re “committed to maintaining current compensation.”

And maybe they mean it.

For now.

But if the economics of their products start showing similar stress, they’ll make similar moves.

They have to.

This is not a knock on Sun Life.

This is the reality of how product pricing works.

And it should be a wake-up call for every advisor who has built their entire business around one carrier, one product, or one compensation structure.

The real question isn’t “why did Sun Life do this?”

The real question is: “How exposed am I?”

Because here’s what I’ve been saying for months now.

The insurance industry is shifting underneath our feet.

Accountants are building internal insurance offerings.

Wealth firms are absorbing insurance into their models.

Carriers are adjusting economics to protect their balance sheets.

And advisors who don’t adapt are going to find themselves squeezed from every direction.

This Sun Life change is just one data point.

But it’s a loud one.

And it’s pointing in a very specific direction.

You need to become radically more independent. And you need to do it faster than you think.

Independence doesn’t mean going rogue.

It doesn’t mean cutting ties with carriers or MGAs.

It means building a business that isn’t dependent on any single product, any single carrier, or any single compensation structure.

It means having deep relationships with multiple providers so that when one makes a change, you can pivot without panic.

It means understanding the economics behind the products you sell, not just the illustrations.

It means building a practice where your value isn’t tied to any one thing that can be taken away from you.

Because things get taken away.

That’s the nature of this business.

Products change. Compensation changes.

Carriers change. Regulations change.

The only thing that doesn’t change is the need for advisors who actually understand what’s happening and can guide clients through it.

Here’s what I’d encourage you to do this week.

First, take a hard look at your product mix.

How much of your business over the last 12 months came from one carrier?

How much came from one product line?

If Sun Life was a big part of your par business, this change probably stings.

But it should also be a signal.

Diversification isn’t just good advice for clients. It’s survival advice for advisors.

Second, have real conversations with your MGA or wholesaler.

Not surface-level “what’s new” conversations.

Real conversations.

Ask them: “What are you seeing across the industry? What changes are coming that I should be aware of? How do I position myself if other carriers follow Sun Life’s lead?”

If they can’t answer those questions, that’s a problem.

If they can, lean in.

Third, think about your value proposition.

If your value was “I can get you into this great early cash value product,” that value just got harder to deliver.

But if your value is “I understand the entire landscape and I can help you navigate whatever comes next,” that value just became more important than ever.

The advisors who win the next decade won’t be the ones who sold the most of any single product.

They’ll be the ones who understood the shifts early and positioned themselves accordingly.

This ties into everything I’ve been talking about.

The convergence of insurance and wealth.

The rise of discretionary portfolio managers.

The threat from accountants building internal offerings.

The need for advisors to become quarterbacks, not vendors.

All of it.

This Sun Life change is just another brick in the wall.

Another signal that the old model, where you picked a carrier, learned their products, and built your business around their compensation, is fading.

The new model requires nimbleness.

It requires multiple relationships.

It requires understanding what’s happening behind the scenes, not just what’s on the illustration.

It requires thinking like a business owner, not just a salesperson.

I’m not worried about the advisors who read this and take action.

I’m worried about the ones who shrug and say “it’s just one carrier, it won’t affect me.”

Because it will.

Maybe not today.

Maybe not this quarter.

But the direction is clear.

And the advisors who see it early will be the ones who thrive.

The rest will spend the next five years reacting to changes they should have anticipated.

If you’re feeling uncertain about where your business stands, or how to position yourself for what’s coming, reach out.

That’s what I’m here for.

Not to sell you on anything.

But to help you see the full picture and figure out your next move.

Talk soon,

Andrew