What is the background of ACA/Prudent Investors? ACA/Prudent Investors Planning Corporation, also known as ACA/Prudent Investors, was formed on April 15, 1999. The principal owner, Mr. Alan C. Achtel, Chief Compliance Officer, Principal Operations Officer and President of the Corporation, was previously a general partner of ACA/Prudent Investors Planning Company from April 1, 1991 through July 23, 1999. Prior to becoming a partner, he was a principal of ACA Investors Planning Company. ACA/Prudent Investors does not have any subsidiaries, nor is ACA/Prudent Investors a subsidiary of any other company. Who are the direct owners of ACA/Prudent Investors Planning Corporation? The direct owners of ACA/Prudent Investors are: Alan C. Achtel – “50% or more” Robyn Achtel – “more than 25% but less than 50% What does ACA/Prudent Investors Planning Corporation do? ACA/Prudent Investors advises their clients on the most efficient use of money to try to achieve their stated or required objectives. ACA/Prudent Investors also provides an Investment Advisory Service. What financial areas does ACA/Prudent Investors get involved with? The corporation is a broker-dealer and acts in the sale of mutual fund shares, tax exempt unit investment trusts, variable and fixed annuities, variable life insurance, money market funds, and 529 College Savings Plans. Approximately 60% of the corporation’s time is spent in the capacity of broker-dealer. ACA/Prudent Investors does not offer wrap accounts. Does the Corporation sell insurance? ACA/Prudent Investors is licensed to sell life, health, accident, long term care, and income protection insurance on an individual or group basis. Approximately 20% of the corporation’s time is spent in the insurance related field. Does ACA/Prudent Investors offer investment advice? Through consultation, clients may be furnished with investment advice, which is unrelated to the corporation’s investment advisory service. On other than an incidental basis, the corporation may provide advice on matters not involving securities as well. What is the ACA/Prudent Investors’ financial management philosophy? There is no single, pre-determined financial philosophy that is right for everyone. ACA/Prudent Investors’ advisers begin by carefully reviewing each client’s current financial status and then helps determine realistic and viable objectives. With this in hand, an investment strategy is then developed which gives directions toward the achievement of the desired objectives. What might such a strategy be? Depending on individual situations, such a strategy might call for long term

investments in securities which the corporation believes may produce current income, capital growth, or conservation of capital. These may be mutual fund shares, tax exempt unit investment trusts, tax sheltered variable annuity accounts, single premium deferred annuities, or for short term investments, money market funds or any other investment vehicle that may be developed in the future. The client’s assets could be invested in both fixed, as well as fluctuating (equity) dollar accounts. Can you be more specific? This involves maintaining regular investments in both fixed as well as fluctuating (equity) dollar accounts. ACA/Prudent Investors charts the net asset values of the various investments utilized in its Investment Advisory Service. These daily values are compared to previously determined targeted trigger points which are various percentages above the ‘exchange in’ price or below the ‘exchange out’ price. Shifts between the equity dollar accounts and either other equity or fixed dollar accounts, or visa-versa, may occur when the net asset value of the particular equity shares pass above a trigger point and subsequently begin to decline, or drop below a trigger point and subsequently begin to rise. Other factors used to determine if an exchange is warranted is the time frame in which the move in net asset value had occurred and the amount of the increases or decreases in the net asset values from the prior exchanges. These shifts between the equity funds and fixed accounts are not done on an individual basis. All clients with a particular investment who meet certain criteria are exchanged at the same time. This certain criteria includes minimum account values. As with any fluctuating account, there are certain risks involved. Consequently, it may be that the corporation’s investment advice will not result in a profit at all times. Does ACA/Prudent Investors accept restrictions? ACA/Prudent Investors will accept restrictions imposed by clients on investing in certain securities or types of securities. What is the amount of clients’ accounts under ACA/Prudent Investors Investment Advisory Service? At the most recent year-end, ACA/Prudent Investors managed $ 294,401,513. on a non-discretionary basis. No assets are managed under the investment advisory service under a discretionary basis. Please see Item 16. - 2 - How do we get started? The usual procedure for becoming an investment advisory account client of ACA/Prudent Investors is to sign a Letter of Understanding and Agreement, which explains the terms of the relationship between the client and the firm. This Letter of Understanding and Agreement is included with this brochure.