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TORONTO (Reuters) - Sun Life Financial Inc, Canada's No. 3 life insurer, said on Thursday it plans to increase its wealth management presence in the country with a new stand-alone mutual fund company.
Sun Life will launch the new company in the autumn along with a family of funds to be sold through Sun Life Financial advisers. It will also offer the products to clients of the company's group retirement services.
Sun Life already derives about 40 percent of its income through its wealth management business. Sun Life Canada President Kevin Dougherty said he expects that number to grow as the baby boomer generation heads into retirement.
"The front edge of the boom is touching 65 (years old) this year and backs out 17 or 20 years from there, so it's a big market," he said in an interview.
The new funds will come from Sun Life's MFS affiliate in the United States, McLean Budden in Canada and Birla Sun Life Asset Management in India, as well as third-party partnerships.
"We'll be reaching into these companies really for the best of what they've got and for what we feel is a hole in the line-up of funds available to Canadians today," said Dougherty, who is also president of Sun Life Global Investments.
He said Canadians would have access to funds by MFS, a top 10 U.S. asset manager, which ranked as one of the best performers though the financial downturn.
"Same thing with McLean Budden," he said. "A number of their funds are only available to pension funds, endowments, high net worth investors, but very strong performers that we are going to be able to bring more easily to investors."
The products will add to the funds already available to Sun Life advisors through a strategic partnership with CI Investments.
Dougherty said Waterloo, Ontario-based Sun Life has a career sales force of about 3,600, about 3,000 of whom are financial advisers. The company has added 150 advisers in the past year and he said that growth would continue.
Rick Headrick, vice-president of Sun Life Global Investments, will serve as president of the new mutual fund company, which does not yet have a name.
"We are still in the stages of registration, but we think it's fair to say you'd see Sun Life somewhere in the name," Dougherty said.
In the insurance business, the company competes against Manulife Financial Corp, which is North America's largest insurer, and Great West Lifeco Inc, Canada's No. 2 insurer.
Editing by Frank McGurty