Cambridge Investment Research, Inc.

Cambridge Investment Research, Inc.

1776 Pleasant Plain Road; Fairfield, IA 52556
800.777.6080
www.joincir.com

Number of Back-Office Employees*: 245

Number of Advisors: 1,108

Total Client Assets Under Management: $31 billion

Advisors' Average Length of Service (in industry): N/A

Total Revenue Year to Date**: $241.5 million

Revenue from Commissions: $99.2 million

Revenue from Fees: $142.3 million

Average AUM per Rep: $28 million

Average Payout per Rep: 89%

Average Production per Rep: $234,000

Number of Dually Registered Reps: 997

* As of 12/31/2007

** As of 12/31/2007, non-audited

Registered Rep.: Why would a wirehouse rep want to leave his firm to join yours?

Eric Schwartz: We are the preeminent fee experts, poised to guide them in achieving total freedom to serve their clients, and in ownership of their own businesses without sacrificing capacity and quality.

RR: Other than your own, of course, which other independent broker/dealers are you impressed with and why?

ES: Broker/dealers that are truly independent, and free to do what is right for advisors and clients. That means not owned by a parent, venture capitalist or the public.

RR: Least favorite compliance rule?

ES: Any rule that does not allow advisors to do what is best for clients.

RR: Are your affiliated advisors fee-based or mostly commission/transaction advisors?

ES: We have been the leader in fee business for the past 15 years, so our rep/advisor fee revenue is currently over 60 percent.

RR: How many of your reps are dually registered? Is that number growing or not?

ES: As the firm that invented the hybrid model, we are proud to have 90 percent of our advisors dually registered with Cambridge's RIA or an outside RIA. The number continues to grow.

RR: The most expensive aspect of running your independent b/d firm in 2007?

ES: High-quality, well-trained staff, with the authority to customize solutions, and well-crafted technology are key to our advisors.

RR: Your recruiting goals through 2008 and beyond?

ES: To recruit the highest-quality most client-centered advisors.

RR: What are your thoughts on upfront bonuses?

ES: The cost of moving a practice varies widely and can be significant; we stand ready to bear that expense.

RR: The ideal advisor is? (Three words or less.)

ES: Totally client focused.

RR: Biggest challenge in 2008 for the independent channel and your firm?

ES: To creatively build on our fee leadership, and expand our uniquely flexible and customized advisor solutions in this increasingly difficult regulatory environment.

RR: The best technology investment your firm has made?

ES: Internal development of the industry's most efficient virtual-office suite for advisors.

RR: Best advice you can give a wirehouse rep thinking about going independent?

ES: Never forget, your clients hired you — not your firm.

RR: What challenges will you face over the next five years?

ES: Building highly customized flexible platforms and programs to address clients' upcoming retirement-income needs, and navigating acquisition and succession-planning services for our advisors.

RR: If you could meet one business-related figure, dead or alive, who would it be, and what would you ask?

ES: Warren Buffet. I'd ask how to go about motivating and encouraging current and potential team members to want to stay long term when a quick hit from a sale or going public may seem appealing.

RR: In 10 years, your firm will be?

ES: We are looking for more of the same: helping fee-oriented advisors do better for their clients and themselves.

RR: A book every financial advisor should read?

ES: Good to Great by Jim Collins.