CLIENT ALLEGES THAT HER FINANCIAL ADVISOR REPRESENTED THAT HER "PREMIUMS WOULD BE REDUCED FROM THE APPROXIMATELY $44,000 PER YEAR [SHE] WAS PAYING PURSUANT TO THE TERMS OF [HER] POLICY WITH JOHN HANCOCK INSURANCE. YOU ADVISED ME THAT UBS HAD A BETTER POLICY WITH PACIFIC LIFE INSURANCE, WHEREUNDER I WOULD BE EXTENDED A COMPARABLE POLICY FOR AN ANNUAL PREMIUM OF APPROXIMATELY $37,000. THE APPROXIMATE $7,000 PER YEAR SAVINGS WAS QUITE SUPPORTIVE. HOWEVER, WHAT WAS NOT DISCLOSED AND APPROPRIATELY EXPLAINED WAS THE INTENDED REQUIREMENT THAT I WOULD HAVE TO TRANSFER MY OWNERSHIP INTEREST IN A $122,000 CASH SURRENDER BALANCE, WHICH HAD ACCRUED UNDER MY POLICY WITH JOHN HANCOCK." DAMAGES ESTIMATED TO EXCEED $5000.

THIS CLIENT HAS BEEN AN OUTSTANDING AND IMPORTANT CLIENT TO ME. IN JUNE 2005 SHE ASKED ME IF I COULD REVIEW AN EXISTING INSURANCE POLICY. I SET UP A MEETING WITH AN INTERNAL UBS INSURANCE EXPERT IN MY OFFICE ON AUGUST 31ST. UPON REVIEW AND ANALYSIS, THE INSURANCE EXPERT SUGGESTED A CHANGE COULD BE MADE TO LOWER THE CLIENT'S PREMIUM AS WELL AS EXTEND THE COVERAGE: ($7,000 LESS AND ONE YEAR LONGER). HE ALSO SUGGESTED THAT AN IRREVOCABLE LIFE INSURANCE TRUST (ILIT) BE SET UP SO THE PREMIUM COULD BE FUNDED IN AN APPROPRIATE WAY. A REPRESENTATIVE IN THE FIRM'S ATTORNEY NETWORK CREATED THE ILIT. THIS ALL SEEMED TO BE TO THE CLIENT'S ADVANTAGE AS WELL AS IT PASSED THE FIRM'S INTERNAL COMPLIANCE REVIEW. I GAVE THE CLIENT ABSOLUTELY NO INSURANCE ADVICE OTHER THAN THE CONNECTION TO THE UBS INSURANCE EXPERT.