1/07-9/08; CLIENT CLAIMS SHE WAS NOT AWARE HOW ALL OF THE "SWITCHES" IN HER ACCOUNT WOULD AFFECT HER TAXES. CLIENT CLAIMS SHE HAD A TAX BILL OF OVER $15,000 (HAVING TO HAVE PAID TAXES ON OVER $68,000 CAPITAL GAINS). SHE FURTHER STATES AS A RESULT HER MEDICARE COSTS INCREASED AS WELL. SHE STATED SHE TRUSTED FA WITH HER RETIREMENT AND NOW HER ASSETS ARE NOT ONLY FALLING THEY HAVE LOST OVER 30%.

$15,000.00

A REVIEW OF YOUR TRADE HISTORY FOR 2007 AND 2008 WAS MADE IN CONJUNCTION WITH A STATEMENT FROM FA TO PUT PERSPECTIVE ON THE TRANSACTIONS. FA STATES HE MOVED A NUMBER OF CLIENTS WHO ENJOYED HIGHER THAN EXPECTED RETURNS IN THE MARKET FROM THEIR EQUITY POSITIONS TO A RELATIVELY MORE STABLE POSITION IN BONDS AND OTHER FIXED INCOME PRODUCTS. ACCORDING TO FA, HE DISCUSSED THESE TRANSACTIONS IN DETAIL WITH CLIENT AS WELL AS CLIENT'S CPA WHEN THEY WOULD HAVE A SIGNIFICANT IMPACT ON YOUR TAXES. HE ALSO STATES THAT HE REVIEWED CLIENT'S ACCOUNT HISTORY WITH CLIENT AND THE IMPACT OF THE MARKETS FROM 2007 AND 2008 AT THE TIME HE TRANSITIONED OUT OF THE OFFICE. WHILE NO ONE CAN PREDICT WHAT THE MARKETS WILL DO, THE VOLATILITY WE'VE EXPERIENCED SINCE WE RECEIVED CLIENT'S LETTER IS EXACTLY THE KIND OF MARKET PATTERN FA WAS REPOSITIONING CLIENT'S PORTFOLIO TO PROTECT AGAINST.

CLIENT STATES THEY RECEIVED BAD ADVICE, THAT THE ACCOUNT WAS INTENDED FOR MINOR'S EDUCATION. STATES THAT THE PERFORMANCE HAS BEEN POOR AND WHEN MONEY WAS MADE THEY HAD TO PAY TAXES. CLIENT FEELS THIS ACCT SHOULD NOT HAVE BEEN SET UP THIS WAY. NO SPECIFIC CLAIM. POTENTIAL LOSSES IN EXCESS OF $5,000.

$5,000.00

EXPLAINED THAT WHEN IR TOOK OVER BRANCH IN 1995 THERE HAVE BEEN SEVERAL INVITATIONS EXTENDED TO REVIEW THE ACCT AND IDENTIFY THE OBJECTIVES FOR THE ACCT. NONE OF THE INVITATIONS WERE ACCEPTED. IR DID DISCUSS THE PUTNAM UTIL FUND VIA TELEPHONE ONCE BECAUSE 100% OF CLIENT'S FUNDS WERE INVESTED INTHIS FUND AND IN 1996 THEY INDICATED THAT THEY WERE INTERESTED IN MORE LONG TERM GROWTH. IR RECOMMENDED A PORTION OF THE FUNDS BE EXCHANGED INTO TWO DIFFERENT PUTNAM FUNDS. THE ACCT WAS ESTABLISHED AS A CUSTODIAL ACCT IN 1992 AND HAS REMAINED UNCHANGED FOR OVER 10 YEARS. EXPLAINED THAT DURING THIS TIME IT APPEARS THAT THE CLIENT WOULD HAVE BECOME AWARE THE ACCOUNT WAS SUBJECT TO TAXES. DETERMINED THAT ACCT WAS HANDLED PROPERLY AND ADVICE WAS SUITABLE.