April 07, 2011

Sun Life Financial Advisor Survey: Investors Need Retirement Income Planning 101

Wellesley, Mass. (April 7, 2011) — A national survey of nearly 500 financial advisors conducted by the U.S. business group of Sun Life Financial Inc. (TSX/NYSE: SLF) reveals that many investors have to adjust their retirement income plans after entering retirement — mostly in order to meet necessary expenditures, not to satisfy lifestyle choices. Over three quarters (77%) of advisors surveyed by the Sun Life Financial Retirement Income Pulse Poll of Financial Advisors say clients need to adjust their retirement income plans, to either avoid running out of money or to meet non-discretionary costs such as healthcare.

“This suggests that the investment planning and advisory community has an opportunity to help prospective retirees build more robust, versatile retirement plans before people ever retire,” says Steve Deschenes, Senior Vice President of Annuities for Sun Life Financial.  “That’s why we’ve co-sponsored National Retirement Planning Week, April 11th to the 15th, to raise awareness of the need for comprehensive retirement income planning.”

Variable Annuities – the Gap Between Retirement Needs and Best Practices

Given the decline of traditional options for receiving guaranteed lifetime retirement income, such as employer-sponsored defined benefit plans, the poll explores investor knowledge of variable annuities with a living benefit, which can provide guaranteed lifetime income.[1] The poll reveals a significant gap between investors’ desire to generate guaranteed lifetime income, and their understanding of best practices to do so. For example, while the top concern of clients age 50 or older is having enough income to retire on, most advisors say that on average, over half (62%) of investors who could benefit from variable annuities don’t actually own them.

Education Needed on the Basics of Guaranteed Retirement Income

The poll identifies several solutions to bridge the gap between retirement income needs and best practices. Nearly a third of financial advisors (27%) conclude that their clients aged 50 or older lack the knowledge to evaluate variable annuities. Over a third of advisors (38%) say better education would boost participation by those investors who would benefit from variable annuities. An equal proportion of financial professionals (38%) say making this asset class easier to understand would increase participation in variable annuities by those who would benefit from them.

Closing the Value/Credibility Gap

The survey also suggests that increased investor confidence in the value and credibility of variable annuities would boost participation in this asset class by those who would benefit from them. Nearly half of advisors (43%), for example, say lower fees would boost investment.

“It’s up to us in the retirement income planning field to show that guaranteed retirement income solutions are worth the money given the protection they help to provide against the risk of declining interest rates, the risk of a declining stock market, and the risk (if you’re are lucky enough to live a long life) of running out of money,” says Terry Mullen, President of Sun Life Financial Distributors.[2] “Investors are paying us to provide them a guaranteed income stream for 30 or 40 years. That’s an important service, since for most Americans, gone are the days of defined benefit plans, where the employer provided guaranteed lifetime retirement income.”

Explaining the Risk-Reward Proposition of Guaranteed Retirement Income

“We need to do a better job of demonstrating to investors that a guaranteed income solution represents an important risk-reward proposition for a retirement income portfolio,” adds Steve Deschenes. “Variable annuities, for example, do more than generate guaranteed income for life. As our newly streamlined quarterly statement to clients underscores, variable annuities, when coupled with optional living benefits, help to maintain income levels, even if your underlying investment falls, and to boost income if your underlying investment rises. In some cases, living benefits also offer a guaranteed annual increase in income, to help conserve purchasing power. We believe that the more we can educate investors about the value of building a retirement income portfolio that includes a product offering guaranteed lifetime income as an asset class, the less clients will need to adjust asset allocations during retirement.”


[1] For information on variable annuities with a living benefit, see the poll results.

[2] Variable annuities have certain recurring costs, such as mortality and expense charges and contract fees. Living benefits are optional features available for an additional annual cost and may be subject to conditions, limitations and restrictions.


About the Sun Life Financial Retirement Income Pulse Poll of Financial Advisors
Kelton Research conducted the online Retirement Income Pulse Poll of Financial Advisors for Sun Life Financial from March 4th-11th, 2011. 477 financial advisors were surveyed, with average experience of 12 years. Roughly half (56%) require an investment of $100,000 or more. Over three quarters of respondents (83%) recommend variable annuities to clients.

Retirement Planning – Education and Plain Language Communications

Committed to educating investors in plain language about retirement income solutions, Sun Life Financial has redesigned and streamlined its Variable Annuity Quarterly Statement, which reaches over 220,000 clients.

To help raise public awareness of the need for comprehensive retirement planning, Sun Life Financial has also joined with the National Retirement Planning Coalition (NRPC) to sponsor National Retirement Planning Week® from April 11th-15th, 2011. In addition to dissemination of the Retirement Income Pulse Poll of Financial Advisors, National Retirement Planning Week® will feature presentations on baby boomers and retirement, consumer retirement readiness, perceptions of risk management in the insured retirement market, and best practices for financial advisors to help consumers formulate plans for lifelong financial retirement health.

About Sun Life Financial

Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. In the United States and elsewhere, insurance products are offered by members of the Sun Life Financial group that are insurance companies. Sun Life Financial Inc., the holding company for the Sun Life Financial group of companies, is a public company. It is not an insurance company and does not offer insurance products for sale in the United States or elsewhere, and does not guarantee the obligations of its insurance company subsidiaries. Product offerings may not be available in all states and may vary depending on state laws and regulations.

As of December 31, 2010, the Sun Life Financial group of companies had total assets under management of $466 billion. For more information please visit

Variable annuities are long term financial vehicles designed for retirement purposes. All withdrawals of taxable amounts, including earnings, are taxable as ordinary income and, if taken prior to age 59½, may be subject to a 10% federal tax penalty. Withdrawals reduce the death benefit and surrender value.

Variable annuity accumulation unit values fluctuate according to underlying economic and market conditions. It is possible to lose up to the entire principal amount invested at redemption.

Optional riders incur additional costs and may be subject to conditions, limitations, and restrictions.

Guarantees, including optional living benefits, are subject to the claims-paying ability of the issuing insurance company. Guarantees do not apply to the performance or safety of amounts held in the variable investment options.

Investors should consider the investment objectives, risks, charges, and expenses of a variable annuity. For this and other important information, request a prospectus from the sales desk. Please read both the variable annuity product and the variable investment option prospectuses carefully before investing or sending money.

Sun Life Financial
Tim Stone
W: 718-416-2185
C: 781-366-5376

SLPC 23150 appvd: 04/06/2011, exp: 04/06/2013