METHODOLOGY

Summary: The information in the report is assembled and organized from our Annual Sales Compensation Questionnaire which is completed by companies; plus extensive field and telephone interviews are utilized for both collection and validation of data. DGL collects, analyzes and maintains a dynamic participant (companies and individuals) database.

In order to make valid peer comparisons, this report divides Mutual Fund Companies into two peer groups — 1st Tier Group and 2nd Tier Group Companies. Companies are categorized as top-performing or average-performing based upon sales production per Wholesaler.

KEY DEFINITIONS:

1st Tier Group Companies: Those companies for which mutual fund assets exceed $60.0 Billion.

2nd Tier Group Companies: Those companies for which mutual fund assets are $60.0 Billion or less.

Top Companies: The top 7 companies in each of the tier groups with the highest sales production per sales person. Note: the makeup of the Top 7 companies in each tier group remains constant throughout the report.

Average Companies: Average tier group benchmarks are averages of all companies in the tier group sample including the Top 7.

Sales Production: Sales volume performance for a calendar year.

Total Sales Cost per Wholesaler:

• Total Cash Compensation per Wholesaler;
• Support Function Expense per Wholesaler;
• Staff/Management Expense per Wholesaler;
• Other Expense: Travel & Entertainment and Seminars, Meetings and Promotions; and,
• Other Expense: Benefits Cost.

Total Cash Compensation: Includes salary or draw plus incentive commission and/or bonus.

Basis Points of Expense Per Dollar of Sales Production: Total sales cost per Wholesaler divided by sales production per Wholesaler.