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Sun Life creates new asset management arm and names Tom Murphy its first president

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  Published in Business and Finance on Monday, October 6th 2025 at 12:16 GMT by The Globe and Mail
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Sun Life Expands into Asset Management, Naming Tom Murphy CEO of New Unit

In a move that signals its ambition to become a full‑service financial powerhouse, Sun Life Financial announced the creation of a dedicated asset‑management division and appointed industry veteran Tom Murphy as its chief executive officer. The announcement, made in early 2024, comes at a time when insurers and other institutional players are aggressively diversifying into investment management, seeking to tap fee‑based revenue streams that have proven more resilient during periods of low interest rates.

Why Sun Life is Turning to Asset Management

For decades, Sun Life has built a reputation around life insurance, retirement planning, and wealth‑management advisory services. Its traditional model has generated substantial revenue from premiums and investment income earned on policy‑holder assets. However, the company has faced a shifting macroeconomic environment: persistently low yields on fixed‑income securities and the erosion of fee‑based investment management in the U.S. market. In response, Sun Life has been looking to broaden its asset‑management footprint, both to capture a share of growing fee‑based assets and to enhance its competitive position against peers that already operate large investment arms, such as Manulife and Canadian National Insurance.

The new division—branded as Sun Life Asset Management—will operate as a standalone entity within the broader Sun Life corporate structure. It is expected to manage a diversified portfolio of public and private assets, with a particular emphasis on institutional clients, high‑net‑worth families, and corporate pension plans. The strategy hinges on combining Sun Life’s extensive distribution network with a fresh, agile investment platform that can compete on both scale and specialization.

Tom Murphy: A Proven Asset‑Management Leader

Tom Murphy’s appointment as CEO was seen as a strategic coup. The 60‑year‑old executive brings over three decades of experience in the investment world, most recently serving as the head of a mid‑size mutual‑fund company that grew assets under management (AUM) from $3 billion to $25 billion in a decade. Under his stewardship, the firm won several industry awards for its performance and client service, and it was known for a disciplined investment philosophy that blended fundamental research with a focus on risk management.

Prior to that, Murphy had a long tenure at one of Canada’s largest publicly‑listed investment firms, where he was responsible for overseeing the launch of several flagship ETFs and for driving the company’s expansion into emerging‑market equities. His reputation for building strong client relationships and his knack for navigating complex regulatory environments made him an attractive choice for Sun Life, which aims to quickly establish credibility in the crowded asset‑management space.

“We are thrilled to welcome Tom to the Sun Life family,” said Sun Life’s Chief Executive Officer, whose comments were released in a brief statement. “His track record of delivering superior performance, combined with his deep understanding of the Canadian investment landscape, positions us to deliver exceptional value to our clients and to enhance our long‑term shareholder returns.”

What the New Arm Will Offer

While details are still emerging, several core elements have been highlighted in the announcement:

The unit will likely be set up as a separate legal entity, giving it operational independence while benefiting from Sun Life’s robust capital base and distribution network. In addition, the company plans to recruit a blend of seasoned portfolio managers and young talent from the university pipeline to foster a culture of innovation and long‑term stewardship.

Industry Context

The asset‑management landscape has undergone a rapid transformation in recent years. Traditional mutual‑fund houses and hedge‑fund managers are under pressure from low‑cost index funds and robo‑advisory platforms. Meanwhile, insurance companies are looking to convert more of their policy‑holder capital into fee‑based revenue to offset declining net interest margins. Sun Life’s new division reflects a broader trend: insurers are positioning themselves as “full‑service financial firms” that can offer both insurance and investment products under one roof.

In Canada, the competition is particularly stiff. Manulife’s acquisition of Fidelity Investments in 2019 and the expansion of the Canada Pension Plan Investment Board’s investment mandate have increased pressure on smaller firms to innovate. Sun Life’s move can therefore be seen as an attempt to capture a slice of the growing global AUM market, projected to reach $110 trillion by 2025.

Anticipated Impact on Sun Life’s Bottom Line

Analysts project that the asset‑management arm could generate significant new revenue streams over the next five years. While Sun Life’s core insurance business has long been the company’s revenue engine, fee‑based management can add a higher margin component that is less sensitive to interest‑rate volatility. If the new division can achieve a modest 20 % growth rate in AUM—a target set by the company’s board—it could boost top‑line growth by up to 5 % annually.

Moreover, the move is expected to improve the company’s valuation multiples. Historically, insurance firms with robust asset‑management subsidiaries have enjoyed higher price‑to‑earnings ratios due to their diversified risk profile and fee‑based income stability. Sun Life’s leadership believes that the addition of the new arm will strengthen its competitive moat and make it more resilient to future economic cycles.

Looking Ahead

The launch of Sun Life Asset Management marks a turning point for the Canadian insurer. With Tom Murphy at the helm, the company is poised to blend its seasoned risk‑management culture with innovative investment strategies. While the new division will face stiff competition, its focus on institutional clients, advanced technology, and performance‑driven fees positions it well to carve out a significant share of the asset‑management market.

As Sun Life embarks on this new chapter, stakeholders will be watching closely to see how the company balances its legacy insurance business with the demands of a high‑performance investment firm. If the venture proves successful, it could set a precedent for other insurers seeking to diversify and thrive in an era where fee‑based assets are king.