Net income at CI Financial Corp. tumbled 72% year-over-year in the fourth quarter of 2008, ended Dec. 31, as redemptions rose and assets under management declined, the company announced on Tuesday.

CI’s net income in Q4 fell to $53.2 million from $187.7 million in the same quarter of 2007.

Q4 profits were affected by a $21.7-million income tax expense that reflects future income tax adjustments relating to CI’s conversion back to a corporate structure, the company said. CI converted back to a corporation on Jan. 1.

Fee-earning assets were $80.3 billion as of Dec. 31, down 24% from $105.6 billion a year earlier. CI’s average retail assets under management were $50.4 billion in Q4, down 22% from $64.5 billion a year earlier. The company attributes the drop in assets to negative market performance, though it was partially offset by positive net sales.

During Q4, revenue from management fees fell to $243.3 million, down $78.9 million, or 24%, from Q4 2007, thanks to the 22% drop in average retail assets under management.

CI’s revenue from redemption fees rose in Q4 as more investors cashed in their mutual funds. Redemption fee revenue rose 23% to $9.4 million, up from $7.6 million in Q4 2007.

The company’s selling, general and administration expenses in Q4 fell 12% year-over-year, thanks to its cost-reduction efforts in response to the decline in its AUM. Adjusted selling, general and administration expenses totalled $77.3 million in Q4, down from an adjusted $87.9 million in the third quarter.

CI expects that expense reductions initiated in the third and fourth quarters of 2008 will generate savings of more than $40 million in 2009.

For 2008 as a whole, CI reported net income of $445.4 million, a decrease of 29% from the $625.1 million reported in the year ended Dec. 31, 2007.

Net sales for the year were $1.74 billion, down 8% from $1.89 billion in 2007. CI’s gross sales were $11.6 billion, up 2% from $11.4 billion the previous year.

Management fee revenue for the year was almost $1.2 billion, down 10% from 2007, while redemption fee revenue rose 14.3% to $36 million, from $31.5 million in 2007.

CI Financial said its profit margin has been “in a gradual downward trend,” as growing competition and changes in product platforms have pushed management fee rates lower.