Management's Discussion and Analysis reviews our consolidated financial condition as of December 31, 2008 and March 31, 2008, the consolidated results of operations for the three and nine months ended December 31, 2008 and 2007 and, as appropriate, factors that may affect future financial performance. The discussion should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q. Unless context requires otherwise, as used in this Management's Discussion and Analysis (i) the "current period" means the three or nine months ended December 31, 2008, (ii) the "prior period" means the three or nine months ended December 31, 2007, (iii) an increase or decrease compares the current period to the prior period, and (iv) all non-comparative amounts refer to the current period.

FORWARD-LOOKING STATEMENTS

The statements, analysis, and other information contained herein relating to trends in our operations and financial results, the markets for our products, the future development of our business, and the contingencies and uncertainties to which we may be subject, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "will," "should," "may," and other similar expressions, are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Such statements are made based upon management's current expectations and beliefs concerning future events and their effects on the Company and are subject to many risks and uncertainties. Our actual results may differ materially from the results anticipated in these forward-looking statements. Readers are directed to discussions of risks and uncertainties that may be found in this report and other documents filed by the Company with the United States Securities and Exchange Commission. We specifically disclaim any obligation to update or revise any forward-looking information, whether as a result of new information, future developments or otherwise.

OVERVIEW

We are a financial services holding company that, through our subsidiaries, provides brokerage, investment advisory, insurance and related services. We operate in a highly regulated and competitive industry that is influenced by numerous external factors such as economic conditions, marketplace liquidity and volatility, monetary policy, global and national political events, regulatory developments, competition, and investor preferences. Our revenues and net earnings may be either enhanced or diminished from period to period by such external factors.

Broker-Dealer Services

The Company provides broker-dealer services in support of trading and investment by its representatives' customers in corporate equity and debt securities, U.S. Government securities, municipal securities, mutual funds, variable annuities and variable life insurance, including provision of market information, internet brokerage, portfolio tracking facilities and records management.

Investment Advisory Services

The Company provides investment advisory services, including asset allocation and portfolio rebalancing, for its representatives' customers. In the past, investment advisory services were performed by both ICC, doing business as ICA, and EPA. The Company's investment advisory business has been centered in ICA since 2004. EPA limited its business to providing access to advisory services supplied by third parties until it completed a transfer of all assets to ICA on May 5, 2008 and withdrew its advisory registration.

Recruitment and Support of Representatives

A key component of our business strategy is to recruit well-established, productive representatives who generate substantial revenues from a broad array of investment products and services. Additionally, we assist our existing representatives in developing and expanding their business by providing a variety of support services and a diversified range of investment products for their clients. The Company focuses on providing substantial added value to our representatives' practices, enabling them to be more productive in their investment advisory and brokerage businesses.

Support provided to assist representatives in pursuing consistent and profitable sales growth takes many forms, including online brokerage systems, asset management models, training in practice management, targeted financial assistance and a network of communication links with investment product companies. Regional and national conventions provide forums for interaction to improve product knowledge, sales and client satisfaction. In addition, our dedicated transition and business development team focuses on providing representatives with programs and tools to grow their businesses both through new client acquisition and advancement of existing client relationships. These programs enhance our ability to attract and retain productive representatives.

OUR PROCESS

Check and Application

Transactions are conducted through a process whereby the client submits a check and application for the desired investment product. Our services include principal review and may also include submission to the investment company.

Online Trading

Through the use of our remote electronic-entry trading platform, registered representatives can efficiently submit a wide range of equity trades online. Trades are reviewed by our principals and our clearing firm before processing.

Bond Trading

The Company's fixed-income trading desk uses a network of regional and primary dealers to execute trades across a broad array of fixed-income asset classes. The desk also utilizes several dealer-only electronic services that allow the desk to offer inventory and to efficiently execute trades.

Asset Allocation

Asset allocation services are available through ICA. These services, for the most part, are executed through our online trading platform. Other allocation services are performed with the respective fund companies directly.

OFF-BALANCE SHEET RISK

We execute securities transactions on behalf of our customers. If either the customer or a counter-party fails to perform, we, by agreement with our clearing broker, may be required to discharge the obligations of the non-performing party. In such circumstances, we may sustain a loss if the market value of the security is different from the contract value of the transaction. We seek to control off-balance sheet risk by monitoring the market value of securities held or given as collateral in compliance with regulatory and internal guidelines. Pursuant to such guidelines, our clearing company requires that we reduce positions when necessary. We also complete credit evaluations where there is thought to be credit risk.

CRITICAL ACCOUNTING POLICIES

In General

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company believes that of its significant accounting policies (see Note 1 to the Company's condensed consolidated financials statements contained herein), those dealing with revenue recognition, allowance for doubtful accounts receivable, and taxes involve a particularly high degree of judgment and complexity. Our accounting policies require estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses reported in the condensed consolidated financial statements. By their nature, estimates involve judgment based upon available information. Actual results or amounts can and do differ from estimates and the differences can have a material effect on the condensed consolidated financial statements. Therefore, understanding these policies is important to understanding the reported results of operations and the financial position of the Company.

Reserves

The Company records reserves related to legal proceedings in "accrued expenses" in the condensed consolidated balance sheet. The determination of these reserve amounts requires significant judgment on the part of management. Management considers many factors including, but not limited to: the amount of the claim; the amount of the loss in the client's account; the basis and validity of the claim; the possibility of wrongdoing on the part of an employee or representative of the Company; previous results in similar cases; and legal precedents. Each legal proceeding is reviewed with counsel in each accounting period and the reserve is adjusted as deemed appropriate by management. Any change in the reserve amount is recorded in the condensed consolidated financial statements and is recognized as a charge/credit to earnings in that period. The assumptions made by management in determining the estimates of reserves may be incorrect and the actual costs upon settlement of a legal proceeding may be greater or less than the reserved amount.

KEY INDICATORS OF FINANCIAL PERFORMANCE FOR MANAGEMENT

Management periodically reviews and analyzes our financial performance across a number of measurable factors considered to be particularly useful in understanding and managing our business. Key metrics in this process include productivity and practice diversification of representatives, top line commission and advisory services revenues, gross margins, operating expenses, legal costs, taxes and earnings per share.

       COMPARISON OF THE FISCAL QUARTERS ENDED DECEMBER 31, 2008 AND 2007

RESULTS OF OPERATIONS

                                                                                               Percentage of Revenue            Percent
                                                            Quarter Ended December 31,       Quarter Ended December 31,         Change
                                                                   2008             2007        2008             2007       2008 vs 2007
                                                          --------------   --------------   -------------     -----------   -------------

Revenue:
   Commissions                                             $ 15,002,034     $ 19,552,008           81.7%           84.0%          -23.3%
   Advisory fees                                              2,681,734        2,752,804           14.6%           11.8%           -2.6%
   Other fee income                                             398,811          421,439            2.2%            1.8%           -5.4%
   Marketing revenue                                            150,000          314,444            0.8%            1.4%          -52.3%
   Interest, dividend and investment                            118,941          230,261            0.7%            1.0%          -48.3%
                                                          --------------   --------------   -------------     -----------
Total revenue                                                18,351,520       23,270,956          100.0%          100.0%          -21.1%

Commission and advisory fee expenses                         14,370,627       18,190,813           78.3%           78.2%          -21.0%
                                                          --------------   --------------   -------------     -----------
Gross profit                                                  3,980,893        5,080,143           21.7%           21.8%          -21.6%

Operating expenses:

   Advertising                                                  267,918          460,114            1.5%            2.0%          -41.8%
   Communications                                               267,047          197,344            1.5%            0.8%           35.3%
                                                          --------------   --------------   -------------     -----------
       Total Selling expenses                                   534,965          657,458            2.9%            2.8%          -18.6%
                                                          --------------   --------------   -------------     -----------

   Compensation and benefits                                  2,197,976        3,124,694           12.0%           13.4%          -29.7%
   Regulatory, legal and professional                         1,400,626          573,941            7.6%            2.5%          144.0%
   Occupancy                                                    251,628          282,158            1.4%            1.2%          -10.8%
   Other administrative                                         401,226          302,155            2.2%            1.3%           32.8%
   Interest                                                       4,374            3,931            0.0%            0.0%           11.3%
                                                          --------------   --------------   -------------     -----------
            Total administrative expenses                     4,255,830        4,286,879           23.2%           18.4%           -0.7%
                                                          --------------   --------------   -------------     -----------

Total operating expenses                                      4,790,795        4,944,337           26.1%           21.2%           -3.1%
                                                          --------------   --------------   -------------     -----------

                               Operating (loss) income        (809,902)          135,806           -4.4%            0.6%         -696.4%

(Loss) income before income taxes                             (809,902)          135,806           -4.4%            0.6%         -696.4%

(Benefit) provision for income taxes                          (195,187)           83,585           -1.1%            0.4%         -333.5%
                                                          --------------   --------------

                           Net (loss) income                $ (614,715)         $ 52,221           -3.3%            0.2%       -1,277.1%
                                                          --------------   --------------
                                                          --------------   --------------

Practice Diversification

The Company, through its recruitment practices and education and training programs, encourages diversification of the array of investments products and services offered by our independent representatives. First and foremost, this enables our representatives to more fully serve the investment and security needs of their clients, particularly in unsettling volatile markets. Recruitment of representatives who are duly qualified to offer sophisticated investment products to their clients historically also has resulted in growth of transaction and fee-based business that, in addition to generating relatively high margins, are expected to help the Company weather a down market due to recurring revenues generated by these types of services.

REVENUES

Revenues decreased significantly this period compared to the prior period. The $4.92 million, or 21.1%, decrease primarily came from commissionable revenues which dropped by $4.56 million as a result of the deepening financial markets crisis. Fees from advisory services also dropped from $2.75 million for quarter ended December 31, 2007 to $2.68 million, or 2.6%, for the quarter ended December 31, 2008; however, advisory services revenue would have dropped off an additional 10% had it not been for the relocation of assets from brokerage commission accounts to our investment advisor accounts due to the repeal of the regulatory rule commonly referred to as the "Merrill Lynch rule".

The "Merrill Lynch rule", which had previously allowed fees based on assets in a client's brokerage account (i.e., fee based commissions), was repealed and, effective October 1, 2007, assets had to be relocated to either commission-based brokerage accounts or investment advisor accounts.

There had been a recent trend of higher growth in our fee-based advisory services, compared to typically lower-margin commission-based services; however, that growth halted this quarter due to a significant decrease in the value of assets under management resulting from declining market prices and reduced influx of new investment dollars.

Management seeks a diversified revenue stream to provide a degree of protection from market risk and continues to emphasize retention and recruitment of representatives who seek to leverage the full range of our technology platforms.

Commissions

   Revenues from commissions dropped in all major categories due to a
significant decline in retail investment reflecting the setting in of consumer
skepticism toward volatile and uncertain financial markets. Although the
Company's revenue stream is diversified and does not entirely rely on new
investment dollars, recurring brokerage revenues did not offset across-the-board
declines in new investment.

   The following table details commission revenue by product type included in commissions:
                                                                                                             Percentage
                                                                                            Percent of     change 2008 vs.
Product Type                                     2008             2007    2008 vs. 2007    total change         2007
                                      ----------------   --------------   --------------   -------------   ----------------
     Variable Annuities                   $ 6,198,345      $ 7,233,181    $ (1,034,836)          -22.7%             -14.3%
     Brokerage (1)                          5,237,223        7,068,402    $ (1,831,179)          -40.2%             -25.9%
     Mutual Funds                           1,247,252        2,449,842    $ (1,202,590)          -26.4%             -49.1%
     Direct Participation Programs          2,261,369        2,747,409      $ (486,040)          -10.8%             -17.7%
     Other                                     57,845           53,174          $ 4,671            0.1%               8.8%
                                      ----------------   --------------   --------------   -------------   ----------------
Total Commissions Revenue                $ 15,002,034     $ 19,552,008    $ (4,549,974)          100.0%             -23.3%
                                      ----------------   --------------   --------------
                                      ----------------   --------------   --------------

1. Revenue designated as brokerage includes revenue from mutual funds sold through our trading platform. Revenue from direct check and application sales of mutual funds are listed above under "Mutual Funds".

Advisory Fees

Advisory revenues declined only moderately in a bear market, primarily due to an increase in recurring non-grid revenue stemming from growth in assets under management. Despite the downward pressure placed on advisory fees by current declines in the market value of financial assets under management, the Company remains focused on growing revenues in this sector to curtail any negative impact on other revenue sources from unpredictable market volatility.

Other Fee Income

Other fee income, primarily comprised of licensing and financial planning fees, were consistent with the prior period's results.

Marketing Revenue

Marketing revenues decreased by $0.16 million, or 52.3%, due primarily to the occurrence of our National Convention in the third quarter of the current fiscal year versus the second quarter of the prior fiscal year.

Other Income

Other income, primarily interest, declined by 48.4% to $0.12 million, compared to $0.23 million during the prior period. The decrease is directly attributable to a reduction in interest income earned on declining trade and related cash balances.

GROSS MARGINS
                                                              Amount                                 % of Sales (Retention Rate)              % of Total Gross Margin
                                                      Quarter Ended December 31                        Quarter Ended December 31              Quarter Ended December 31     Percent Change
                                        --------------------------------------------------    -------------------------------------------   -----------------------------   ---------------
                                                                                                                                                                                 2008
                                                   2008                        2007                  2008                    2007               2008            2007           vs. 2007
                                        ----------------------            ----------------    -------------------     -------------------   -------------    ------------   ---------------
Commissions:
     Check and Application                        $ 1,261,906                 $ 1,615,955           13.0%                   13.0%              31.7%            31.8%           -21.9%
     Brokerage                                      1,616,132                   1,956,135           28.6%                   27.7%              40.6%            38.5%           -17.4%
     Fixed Insurance                                   25,245                      45,174           100.0%                  100.0%              0.6%            0.9%            -44.1%
     Underwriting                                       3,220                         800            9.9%                   10.0%               0.1%            0.10%           302.5%
                                        ----------------------            ----------------                                                  -------------    ------------
     Total                                          2,906,503                   3,618,064                                                      73.0%            71.3%           -19.7%
                                        ----------------------            ----------------                                                  -------------    ------------
Advisory Services:
     A-MAP                                            342,228                     426,570           23.3%                   23.1%               8.6%            8.4%            -19.8%
     Other                                            217,686                     229,128            n/a1                    n/a1               5.5%            4.6%            -5.0%
                                        ----------------------            ----------------                                                  -------------    ------------
     Total                                            559,914                     655,698           24.9%                   23.2%              14.1%            13.0%           -14.6%
                                        ----------------------            ----------------                                                  -------------    ------------
Licensing                                             326,125                     342,193            n/a1                    n/a1               8.2%            6.7%            -4.7%
Marketing                                             150,000                     314,444            n/a1                    n/a1               3.8%            6.1%            -52.3%
Other Income                                           38,351                     149,744            n/a1                    n/a1               0.9%            2.9%            -74.4%
                                        ----------------------            ----------------                                                  -------------    ------------
Total Gross Margin                                $ 3,980,893                 $ 5,080,143           21.7%                   21.8%              100.0%          100.0%           -21.6%
                                        ----------------------            ----------------                                                  -------------    ------------
                                        ----------------------            ----------------                                                  -------------    ------------

Gross margin decreased by $1.10 million, or 21.6%, to $3.98 million for the current period. Principal components of this decline include $0.34 million in brokerage, $0.35 million in direct check and application, and $0.16 million in marketing.

Commissions

The combined $0.69 million decrease in gross profit in commissions from brokerage and check and application was the result of a contraction in commissionable revenues attributed to the market deterioration which directly correlated to a decline in new investment dollars provided in the current period versus the prior period.

Net commissions from equity trades decreased by $0.41 million as uncertainty in the financial markets continue to impact our profit margins in this sector. There also was a $0.13 million dollar increase in profit margin from recurring brokerage, which helped to offset the overall decrease in net commissions. Finally, we experienced a $0.35 million decline in profit margin from our direct check application segment resulting from a $2.72 million reduction in gross dealer concessions driven by current market conditions.

Advisory Services

We experienced a $0.09 million, or 19.8%, decrease in gross margin from our A-MAP rep-directed managed assets program reflecting a fall in the value of assets under management values attributable principally to the stock market decline and a contraction in new investment dollars. However, profit margin from non-AMAP advisory programs remained relatively flat for the comparative quarters.

Commission and Advisory Fees Expenses

Profit margins are inversely aligned with payout of commission and advisory fees to our representatives as a percentage of revenue generated by them. We strive to recruit quality independent representatives who generate recurring revenues that do not flow through the commission and advisory expense payout grid, primarily as brokerage commissions and advisory fees. Management continuously monitors the amount of revenue an independent representative brings in compared to its payout on that revenue.

Commission and advisory fees expenses during the current period were $14.37 million versus $18.19 million in the prior period. As a percentage of revenue generated by representatives (i.e., commissions, advisory fees and other fees), commission and advisory expenses decreased slightly from 80.0% in the prior period to 79.5% in the current period. These expenses include commissions to representatives, clearing costs and other direct costs that are necessary to produce revenue. Management continuously monitors these costs as they have a substantial effect on our profit margin.

OPERATING EXPENSES

. . .