Disclosure Statement

Product Provider Program Marketing and Compensation Arrangements

This document provides you, the investor, with additional disclosure regarding marketing and compensation arrangements Montauk Financial Group has with certain product providers. This information may or may not be disclosed in the providers' respective prospectuses, Offering Circulars or Statement of Additional Information, and is subject to change.

Montauk Financial Group offers over 500 variable insurance products from over 100 insurance carriers. We also offer and sell funds from 330 Mutual Fund families, Real Estate Investment Trusts ("REITS"), managed money platforms and Section 1031 Exchange real estate programs. These companies are all collectively referred to as ("Product Providers"). Because of the large quantity of available products, we focus on a select group to enable us to efficiently utilize our training, marketing and sales support resources.

The Product Provider Program was instituted in 2001 to develop strategic marketing relationships with a limited number of Product Providers. Partnership Provider participation provided these Product Providers with access to our national network of registered representatives for marketing, product support, training and education. This access may include participation in sales conferences, training and educational seminars, access to sales information and representative lists, and other various enhanced methods of communication with our independent financial consultants. In addition, Montauk Financial Group may publicize products of these product providers within various marketing means and web sites, including links to these companies' own web sites. The Product Providers may provide sales support and help create targeted marketing campaigns for Montauk's registered representatives. All Partners are provided with an opportunity to attend our annual sales, training and education conferences at which they receive significant marketing exposure to the Montauk registered representatives in attendance.

There is no additional commission or other compensation paid to a registered representative for recommending an investment of a Partner company. Registered representatives may choose to recommend a product from any approved product provider, regardless of Partnership participation. The primary factor in making a recommendation to a client is the determination that the recommendation is suitable for the client and consistent with each client's stated investment objectives and needs.

The Product Providers make cash payments to Montauk to participate in the Partner Program. The funds are used to help defray the costs of due diligence as well as our annual sales, marketing and education seminar, called "The Montauk Masters". Participating companies are encouraged to attend The Montauk Masters and generally given an opportunity to make presentations to the registered representatives on products, marketing strategies, and changes in the industry and/or regulatory environment. Registered representatives attend these seminars at no cost to them, including in certain instances the cost of travel to and from the event. There is no requirement for a registered representative to market or sell a service or product of any participating Partner provider in order to attend the Montauk Masters program.

For 2007 Montauk Financial received $178,150.81, respectively from the Product Providers named below:

Montauk Financial Group and its registered representatives may also receive other reimbursements from Partner companies. For example, a Product Provider may sponsor its own conference or seminar for educational purposes to which certain Montauk registered representatives are invited. The company may reimburse or pay for the travel and other related expenses incurred by Montauk's registered representatives to attend such conferences or seminars. In addition, a product sponsor may also pay for certain expenses incurred by a registered representative or a Montauk branch office in connection with lunches, dinners, client seminars or other events for clients and other miscellaneous expenses incurred by registered representatives.

If you require any additional information with regards to the disclosures made in this letter, you may call or e-mail Mark Lowe, coordinator of our Insurance and Alternative Investment departments at 1-800-876-3672 Ext. 4262, or markl@montaukfinancial.com.

PARKWAY 109 OFFICE CENTER • 328 NEWMAN SPRINGS ROAD • RED BANK, NJ 07701
732-842-4700 • WWW.MONTAUKFINANCIAL.COM

Securities and Advisory Services offered through Montauk Financial Group, SM First Montauk Securities Corp., Member FINRA/SIPC