Management's Discussion and Analysis reviews our consolidated financial condition as of June 30, 2009 and March 31, 2009, the consolidated results of operations for the three months ended June 30, 2009 and 2008 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 months ended June 30, 2009,
(ii) the "prior period" means the three months ended June 30, 2008, (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.

OUR BUSINESS

We operate primarily through our subsidiary, ICC, as a broker-dealer and, doing business as ICA, as a registered investment advisor, with a national network of independent financial representatives.

Broker-Dealer Services

We provide broker-dealer services in support of trading and investment by or for our representatives' customers in securities, including corporate equity and debt securities, U.S. Government securities, municipal securities, mutual funds, limited partnerships and other alternative investments, variable annuities and variable life insurance. We also provide such related services such as market information, internet brokerage, portfolio tracking facilities and records management.

Investment Advisory Services

We provide investment advisory services, including asset allocation and portfolio rebalancing, for our representatives' customers. In the past, investment advisory services were performed by both ICC and EPA. We have consolidated our investment advisory services into ICA, and EPA ceased operations and was dissolved during the fiscal quarter ended June 30, 2008.

Recruitment and Support of Representatives

A key component of our business strategy is to recruit well-established, productive representatives who generate substantial revenues from an array of investment products and services. Additionally, we assist our 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 symposiums and national conventions provide forums for interaction to improve product knowledge, sales and client satisfaction. In addition, our dedicated transition and business development teams focus 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.

Check and Application

The largest segment of our revenues is obtained through a check and application process where a check and a product application is delivered to us for processing that includes principal review and submission to the investment company or clearing firm. Investments in technology are facilitating our migration over time from a paper intensive to a virtually paperless process. This shortens the transaction cycle, reduces errors and creates greater efficiencies. We continue to invest in technologies that provide more efficient processes resulting in improved productivity.

Online Brokerage

Registered representatives can efficiently submit a wide range of security investments online through the use of our remote automated brokerage platform for trade execution.

Bond Brokerage

Our fixed-income brokerage 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 execute trades. Our fixed income traders work with our representatives to develop portfolios for clients. This area provides an investment alternative for investors who have become interested in retirement income, and it has potential for growth during an interest rate favorable environment.

Asset Allocation

Asset allocation services are made available primarily through ICA. Our services include the design, selection and rebalancing of investment portfolios on behalf of our advisors' clients. We also provide tools, services and guidance that enable our representatives to provide these investment services directly to their clients. These services, for the most part, are conducted through our online brokerage platform. Other allocation services are performed directly by the fund company.

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.

Off Balance Sheet Risk

We execute securities transactions on behalf of our customers on a fully-disclosed basis. 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.

Reserves

We record 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, earnings per share and adjusted EBITDA.

                             COMPARISON OF THE FISCAL QUARTERS ENDED JUNE 30, 2009 AND 2008

RESULTS OF OPERATIONS

                                                                                 Percentage of Revenue        Percent
                                                  Quarter Ended June 30,        Quarter Ended June 30,         Change
                                                       2009            2008      2009               2008    2009 vs 2008

Revenue:
   Commissions                                 $ 15,712,809    $ 19,274,159        84.2%            84.1%         -18.5%
   Advisory fees                                  2,432,188       3,014,677        13.1%            13.2%         -19.3%
   Other fee income                                 141,677         137,647         0.8%             0.6%           2.9%
   Marketing revenue                                218,530         311,226         1.2%             1.4%         -29.8%
   Interest, dividend and investment                109,631         160,459         0.7%             0.7%         -31.7%
Total revenue                                    18,614,835      22,898,168       100.0%           100.0%         -18.7%

Commission and advisory fee expenses             15,113,975      18,585,175        81.2%            81.2%         -18.7%
Gross profit                                      3,500,860       4,312,993        18.8%            18.8%         -18.8%

Operating expenses:

   Advertising                                      182,362         437,223         1.0%             2.0%         -58.3%
   Communications                                   150,619         237,418         0.8%             1.0%         -36.6%
       Total selling expenses                       332,981         674,641         1.8%             3.0%         -50.6%

   Compensation and benefits                      1,671,936       2,521,453         8.9%            11.0%         -33.7%
   Regulatory, legal and professional               615,624       1,083,699         3.3%             4.7%         -43.2%
   Occupancy                                        229,116         302,135         1.2%             1.3%         -24.2%
   Other administrative                             350,485         301,776         1.9%             1.3%          16.1%
   Interest                                          10,580          11,857         0.1%             0.1%         -10.8%
       Total administrative expenses              2,877,741       4,220,920        15.4%            18.4%         -31.8%

Total operating expenses                          3,210,722       4,895,561        17.2%            21.4%         -34.4%

Operating income (loss)                             290,138       (582,568)         1.6%            -2.5%        -149.8%

Provision (benefit) for income taxes                238,602       (308,023)         1.3%            -1.3%        -177.5%

                           Net income (loss)       $ 51,536     $ (274,545)         0.3%            -1.2%        -118.8%

Adjusted EBITDA                                   $ 541,128        $ 91,503         2.9%             0.4%         491.4%

Adjustments to GAAP Net income (loss):
 Income tax benefit                                 231,671         433,024            -                -         -46.5%
 Interest expense                                  (10,580)        (11,857)            -                -         -10.8%
 Income tax expense                               (470,273)       (125,001)            -                -         276.2%
 Depreciation                                      (88,142)        (99,505)            -                -         -11.4%
 Non-cash compensation                             (68,783)       (242,442)            -                -         -71.6%
 Non-recurring professional fees to
evaluate strategic business opportunities          (83,485)       (320,267)            -                -         -73.9%

              Net income (loss)                    $ 51,536     $ (274,545)            -                -        -118.8%

Adjusted EBITDA

Earnings before interest, taxes, depreciation and amortization ("EBITDA"), as adjusted by eliminating gains or losses on sales of assets, non-cash compensation expense, and various non-recurring items ("adjusted EBITDA"), is a key metric we use in evaluating our financial performance. Adjusted EBITDA eliminates items that we believe are not part of our core operations, are non-recurring items of revenue or expense, or do not involve a cash outlay, such as stock-related compensation. We consider adjusted EBITDA important in monitoring and evaluating our financial performance on a consistent basis across various periods. We also use adjusted EBITDA as a primary measure, among others, to analyze and evaluate financial and strategic planning decisions.

Adjusted EBITDA is considered a non-GAAP financial measure as defined by Regulation G promulgated by the SEC under the Securities Act of 1933, as amended. Adjusted EBITDA should be considered in addition to, rather than as a substitute for, important GAAP financial measures including pre-tax income, net income and cash flows from operating activities. Items excluded from adjusted EBITDA are significant and necessary components to the operations of our business; therefore, adjusted EBITDA should only be used as a supplemental measure of our operating performance.

PRODUCTIVITY AND PRACTICE DIVERSIFICATION OF REPRESENTATIVES

Management believes that improving the overall quality of our independent representatives is a key to achieving growth in revenues and net income. We believe that upgrading the business practices of our representatives not only generates more revenue, but assists in limiting the cost of overhead functions and representative noncompliance. We strive to continually improve the overall quality of our force of representatives by:

º assisting representatives to improve their skills and practices,
º recruiting established, high quality representatives, and
º terminating low quality representatives.

Productivity

   A key metric that we use to assess the average quality of our producing
(non-staff) representatives is per capita rep-generated revenue based on a
rolling 12-month period. Data for the 12-month periods ended June 30, 2009 and
2008 are presented below.

                                        Twelve months ended                          % Increase/
                                    June 30, 2009  June 30, 2008   Incease/decrease   decrease
Rep-generated revenue:
 Commission                         $ 64,657,965    $ 77,111,536    $ (12,453,571)     -16.2%
 Advisory                             10,508,019      11,330,425         (822,406)      -7.3%
 Other fee income                        808,907       1,068,333         (259,426)     -24.3%
                                    $ 75,974,891    $ 89,510,294    $ (13,535,403)     -15.1%
Number of representatives                    637             687              (50)      -7.3%
Average revenue per representative     $ 119,270       $ 130,292        $ (11,022)      -8.5%

We believe that the 8.5% decline in per capita rep-generated revenue compares well with percentage drops in revenue widely experienced in the financial industry during the twelve months ended June 30, 2009.

Practice Diversification

We encourage diversification of investments products and services offered by our independent representatives through our recruitment practices and education and training programs. First and foremost, this enables our representatives to more fully serve the investment and security needs of their clients, particularly in volatile markets. Recruitment of representatives who are duly qualified to offer 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 endure a volatile market due to recurring revenues generated by these types of services.

REVENUES

Revenues decreased significantly this period compared to the prior period. The $4.3 million, or 18.7%, decrease primarily came from commissionable revenues which dropped by $3.56 million reflecting the overall economic crisis; however, currently, the Company is seeing a stabilization of revenues since year end.

Fees from advisory services also dropped 19.3% from $3.01 million for quarter ended June 30, 2008 to $2.43 million, for the quarter ended June 30, 2009. The decrease was attributable largely to market-related declines in asset values not offset by decreasing new investment contributions.

Revenues continue to reflect the effect of the unprecedented events of last year on the financial services sector. 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

Commission revenue fell by 18.5%, led by a combined $2.55 million drop in direct mutual fund sales and direct participation programs (DPP's). These decreases reflected a significant decline in financial asset values and resulting flight from these product categories to investments regarded to be more secure, including money market funds and treasury bonds. The drop in DPP's is also correlated to declines in the real estate market including Real Estate Investment Trusts (REITS). A drop in oil and gas programs is a result of falling oil prices.

Brokerage decreased only slightly, by 3.1%, compared to the other commissionable products due to an increase in sales in the bond markets as bonds became an investment alternative with the speculation that interest rates would continue to fall.

The following table details commission revenue by product type included in commissions:

                                                                                                                  Percentage
                                                                                                  Percent of    change 2009 vs.
Product Type                              2009                2008            2009 vs. 2008      total change        2008
     Variable Annuities             $       6,912,626   $       7,686,628   $        (774,002)         -21.7%            -10.1%
     Brokerage (1)                          6,199,052           6,398,786    $       (199,734)          -5.6%             -3.1%
     Mutual Funds                             919,861           2,207,406   $      (1,287,545)         -36.2%            -58.3%
     Direct Participation Programs          1,655,844           2,917,167    $     (1,261,323)         -10.8%            -43.2%
     Other                                     25,426              64,172    $        (38,746)           0.1%            -60.4%
Total Commissions Revenue           $      15,712,809   $      19,274,159    $     (3,561,350)         100.0%            -18.5%

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

Responding to industry trends and increasing client demand, we have endeavored to assist our representatives in transitioning more of their business to advisory services. We do not dictate the general nature or extent of advisory services our representatives provide for their clients. However, we continue to make concerted efforts to attract our representatives to our expanded line of proprietary advisory services programs through education, seminars, tradeshows and direct telemarketing.

Our advisor-directed managed assets program, A-MAP, where investment advisory services are provided directly by our independent representatives, continues to contribute the majority of advisory services revenue. Revenue from this program decreased by $0.50 million or 27.44% due to a decrease in assets under management which, in turn, reflected market-wide declines in asset values as well as decreasing new investment.

Supported by our Net Exchange Pro and Pershing direct on-line mainframe brokerage platforms, A-MAP is still popular with our representatives because of the opportunities it provides to deliver superior asset management services and overall investment performance at a lower cost. Resulting transactional cost savings have been passed on to our representatives' clients in the form of lower fees for improved service.

Other Fee Income

Other fee income, primarily comprised of licensing, financial planning and our representatives' errors and omissions policy fees, increased modestly as compared to the prior period's results.

Marketing Revenue

Marketing revenues decreased by 29.8%, due primarily to a decline in marketing support revenues, as sales of company products decreased, as well as in quarterly symposiums and national event profitability.

Other Income

Other income, primarily interest, declined by 31.7% due primarily to the U.S. Federal Government's decision to lower the Federal Funds Target Rate from 2% to a range of 0.0 % to 0.25 % as of June 30, 2009.

GROSS MARGINS
                                                                            % of Sales (Retention Rate)           % of Total Gross Margin
                                  Amount Quarter Ended June 30,                Quarter Ended June 30,              Quarter Ended June 30,       Percent Change
                                                                                                                                                     2009
                                   2009                   2008              2009                       2008       2009                  2008       vs. 2008
Commissions:
     Check and Application  $         1,233,483   $         1,665,455       13.0%                     13.0%       35.2%                38.6%        -25.9%
     Brokerage                        1,403,597             1,512,240       22.6%                     23.6%       40.1%                35.1%        -7.2%
     Fixed Insurance                     25,426                28,522      100.0%                     100.0%      0.7%                  0.7%        -10.9%
     Underwriting                             -                 7,036       0.0%                      19.7%       0.0%                 0.10%       -100.0%
     Total                            2,662,506             3,213,253                                             76.0%                74.5%        -17.1%
Advisory Services:
     A-MAP                              320,028               414,778       24.2%                     22.7%       9.1%                  9.6%        -22.8%
     F-Map                              103,416               115,259       42.7%                     40.5%       3.0%                  2.7%        -10.3%
     Other                               75,136               112,337       n/a1                       n/a1       2.2%                  2.7%        -33.1%
     Total                              498,580               642,374       19.9%                     20.9%       14.3%                15.0%        -22.4%
Licensing                                44,271                66,090       n/a1                       n/a1       1.3%                  1.5%        -33.0%
Marketing                               218,530               311,226       n/a1                       n/a1       6.2%                  7.1%        -29.8%
Other Income                             76,973                80,050       n/a1                       n/a1       2.2%                  1.9%        -3.8%
Total Gross Margin          $         3,500,860   $         4,312,993       18.8%                     18.8%      100.0%                100.0%       -18.8%

1. Due to account composition of the notated products, profit margin retention is not a relevant indicator of performance and is not tracked.

Gross margin decreased by $0.81 million, or 18.8%, to $3.50 million for the current period. Principal components of this decline included $0.43 million from direct check and application, $0.11 million from brokerage, $0.14 million from advisory services, and $0.12 million from other products and services.

Commissions

The combined $0.54 million decrease in gross profit in commissions from . . .