Equity Services, Inc. ("ESI") is registered as both a broker-dealer and an investment adviser. While our goal is to provide you with quality products and services without regard to what type of account you have opened, you should be aware that our obligations under the law will differ depending on whether your have a brokerage or an investment advisory account.

ESI believes that it is important for our registered representatives to have a wide selection of investment products available to help meet the financial needs of our customers.

In addition, ESI has selected a small group of mutual fund, variable insurance, investment adviser and direct participation program product providers that the firm believes have met high industry standards for long-term performance, superior field support and reliable back-office support. This group of product providers has greater access to our representatives to provide training and other educational opportunities to help serve our customers better. This program is called the Strategic Partners Program.

The following mutual funds/unit investment trusts that participate in the Strategic Partners Program: Sentinel Funds and Advisors Asset Management, Inc. The following variable insurance issuers currently participate in the program: Transamerica, Prudential and Nationwide. The following direct participation program sponsors participate in the Strategic Partners Program: ATEL, CB Richard Ellis, COLE, ICON, Inland, and Wells.

These partners make additional payments to ESI to participate in the program. These payments are paid to ESI and are not directly shared with its representatives. Depending on the product sponsor, payments can be a percentage of gross sales, a flat annual amount or a combination of the two. The anticipated payments may be as much as $75,000 per year for certain, unaffiliated strategic partners**. Payments from Strategic Partners are described below:

Broker-Dealer Strategic Partners

* ESI is affiliated with the companies that manage and distribute the Sentinel Funds. Accordingly, the Sentinel Funds are considered a part of the Strategic Partners Program. ESI receives both asset- and sales-based payments from Sentinel Financial Services Company, the distributor of the Sentinel Funds, that are expected to equal at least $500,000 in 2010. ESI pays a higher rate of commissions and other compensation, such as bonuses, employee-type benefits and other cash compensation, to its registered representatives for Sentinel Funds than other mutual funds. As a result, representatives selling Sentinel Funds receive a larger percentage of the commission paid by the investor for Sentinel Funds than other mutual funds.

Last, ESI reimburses the transaction cost for certain purchases, redemptions and exchanges through its clearing firm, National Financial Services, LLC, of Sentinel Fund shares.

**Transamerica Life Insurance Company and certain of its affiliates and ESI have agreed to co-market Transamerica's variable annuity products. ESI is paid an additional percentage of premium payments by Transamerica on certain commission schedules and contributions to ESI's conferences. These payments are not expected to exceed $200,000 in 2010. In addition, sales of Transamerica variable annuities provide ESI representatives a higher rate of commissions and other compensation, including bonuses, employee-type benefits and other cash compensation, than other variable annuities.

Phoenix Life Insurance Company and certain of its affiliates have agreed to pay ESI an additional amount on an increase in assets on an annual basis in arrears for annuity contracts previously sold by ESI.

In addition to the above arrangements, ESI is an affiliate of National Life Insurance Company ("National Life"). National Life is the underwriter and ESI is the distributor of Investor Select Variable Universal Life and the Sentinel Advantage Variable Annuity. ESI is an affiliate of Life of the Southwest ("LSW"), which is an underwriter of indexed annuity products. In general, ESI pays a higher rate of commissions to its representatives on these National Life and LSW products and, as a result, ESI representatives selling National Life and LSW products receive a larger percentage of the commission paid by the investor than non-National Life and LSW products. Additionally, National Life, LSW and/or ESI pay bonuses, employee-type benefits and other compensation to ESI representatives for sales of National Life and LSW fixed and/or variable products, which other insurance companies do not pay. ESI receives payments from National Life and LSW as reimbursement for such benefit programs and other expenses. Sentinel Financial Services Company, ESI's affiliate, is also the distributor of the Sentinel Variable Products Funds, which are offered as sub-account options in National Life Insurance Company's variable life insurance and annuity products.

Investment Adviser Strategic Partners

ESI may receive payments from firms or persons that offer asset management or separate account products or services to be included in a preferred list of advisers ("Preferred advisers"). These payments may take the form of conference, program or event attendance, participation or exhibition fees; educational and training fees; or fees linked to Program participation or specific marketing initiatives within an existing Program. Such advisers may pay travel, meal and other expenses for a firm's representatives and others who visit the adviser's offices or other locations (including hotels and conference centers) to learn about its products and services.

Payments described above may vary significantly from firm to firm depending on the nature of the Preferred adviser's investment adviser activities with the firm and the amount of the firm's separate account client assets under the Preferred adviser's management. Across its Preferred advisers, excluding charitable contributions and events, and routine business travel, meals and entertainment, such payments may be as high as $50,000 per year. Clients are encouraged to request and review a Wrap Brochure or Form ADV II from program sponsors describing business and financial terms and arrangements between Program sponsors and investment advisers.

ESI's Preferred advisers are as follows: FundQuest, Brinker Capital, Maple Capital and SEI Investments.

Other Arrangements

National Life and ESI contribute payments to non-cash incentives for ESI registered representatives which are based on sales of mutual funds, variable insurance contracts, other securities products and investment advisory services. Examples of non-cash compensation include: (1) the sponsorship of educational programs; (2) sales contest and/or promotions in which participants receive prizes such as travel, merchandise, hardware and/or software; (3) paying for occasional meals, lodging and/or entertainment; (4) making cash payments in lieu of business expense reimbursements and/or; (5) making loans and forgiving such loans.

In addition to the additional payments described above, certain product sponsors and investment advisers may make other payments to ESI intended to reimburse the firm's representatives for marketing expenses, such as client seminars, marketing materials, educational and training programs, etc. Marketing reimbursements are directed to ESI and subsequently paid by ESI to its representatives. Reimbursements for educational and training programs may be made directly by the product sponsor on behalf of ESI's representatives. In the 2009 calendar year, individual payments and/or reimbursements received by ESI representatives totaled less than $100,000. The average payment/reimbursement made to a recipient representative was less than $1,500. Of firms with which ESI has a current selling agreement, payments were made by the following companies and/or their affiliates: 3D Asset Management; Advisors Asset Management; Allianz; Atlas; Brinker Capital; CLS Investments; COLE; Fidelity; FundQuest; Genworth; Highland Funds; ICON Capital; Inland; Jackson National; John Hancock; Life of the Southwest; Maple Capital; Nationwide; Old Mutual; Pacific Life; Penn Mutual; Phoenix; Prudential; RBC Trust; SEI Investments; Saratoga Capital; Sentinel; Sun Life; Sun Life; Transamerica; Wells.

Any changes to this policy are posted to the Equity Services website: www.equity-services.com