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## Expenses 

Investment dealer fees represent the payout to advisors on revenues they generate and were $174.5 million for the year ended December 31, 2012, compared to $179.5 million for the year ended December 31, 2011. The decrease in these fees relates directly to the decrease in administration fee revenues discussed above. 

As detailed in Table 10, dealer gross margin was $46.2 million or 21.0% of administration fee revenue for 2012, compared to $46.7 million or 20.6% for 2011. The change in gross margin from the prior period relates to the change in average investment dealer fees paid out to financial advisors on their administration fees. Generally, as an advisor’s assets under administration and administration fee revenues grow, the payout rates to the respective advisor will correspondingly increase up to a maximum payout rate. 

SG&A expenses for the segment were $52.7 million for the year ended December 31, 2012 compared to $54.8 million in the year ended December 31, 2011. The level of discretionary spending decreased during 2012 compared to 2011. 

The Asset Administration segment had income before income taxes and non-segmented items of $3.7 million for 2012, up from $3.2 million in 2011. This increase is a result of the decline in SG&A spend and dealer gross margin rose slightly year over year. 

## TABLE 10: DEALER GROSS MARGIN 

CI monitors its operating profitability on the revenues earned within its Asset Administration segment by measuring the dealer gross margin, which is calculated as administration fee revenue less investment dealer fees, divided by administration fee revenue. CI uses this measure to assess the margin remaining after the payout to advisors. 

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