July 17, 2007

The second quarter of 2007 turned out to be a very good one for equities, both in the United States and abroad. The S&P 500 registered a total return of 6.28% for the quarter while overseas, the MSCI EAFE Index notched up a 6.40% return.

The U.S. economy showed signs of slowing down in the first half of 2007, although the rest of the world is still exhibiting healthy economic growth. The Eurozone and Japan are growing in the 2.0% to 2.5% range, which is robust by their standards. China and India, with roughly 37% of the world~s population, are growing their GDP in the high single to low double digit ranges. The danger at this point in the world~s two most populous countries leans more towards out-of-control expansion than to economic malaise.

Equity markets have had a healthy run since 2002 with many of them reaching new highs. This has given some investors cause for concern. Nonetheless, equity valuations remain very reasonable in light of the relatively low interest rate environment. Corporate balance sheets remain strong and companies have been aggressively buying back their own shares. Much has been made of the large amounts of money flowing to the private equity funds. It is encouraging to us that these funds are finding value in the public equity markets when they deploy their assets.

On the fixed income side, the yield on the ten year Treasuries has increased during the quarter from 4.6% to 5.0%. However, the interest rate environment is still fairly benign. The Federal Reserve appears to be content sitting on the sidelines with respect to interest rates as it assays inflation on one side of the scale versus economic growth on the other. Overseas, the bias is still towards further rate hikes on the part of the European and Japanese central banks.

The recent turmoil in the subprime mortgage markets still merits cause for concern. The reward for bearing risk in the fixed income markets is very low as evidenced by the narrow spreads between high quality U.S. Treasuries and lower grade debt. It is quite likely that these spreads will return to more historic norms and suggests that investors in low quality debt should tread carefully.

Turning now to the Sequoia front, we have been busy expanding our team.

Three years ago we started an internship program. We have worked hard since then to give the program structure and definition, and we are beginning to enjoy the benefits of our labor. Our interns get more out of the program, we get more productive work out of the interns, and we are attracting brighter and more focused students. This year, we are proud to host David Horowitz of Miami University, Kristan Piero of Miami University, and Daniel Luketic of Mount Union College. They have been with us for approximately one month now and will be here through the balance of the summer. Michael Froehlich of the University of Toledo has returned for a second internship.

Joining us full time in the Service Excellence Group are Heather Brown and Josh Stoll. Heather graduated Summa Cum Laude from Mercyhurst College in June. Josh graduated Cum Laude from Miami University earlier this year. They join Shaun Kapusinski and the other members of our Group in operations and client service. Also joining the team is Trevor Chuna, who is working in our Planning Department. Trevor has two years of experience and is a graduate of the University of Akron.

In 2006 we promoted Kevin Tichnell to head of our pension department. Kevin has done an outstanding job of standardizing and elevating our service commitment on existing plans as well as attracting new plans to Sequoia. With this growth has come increased service needs and we are pleased to announce that Brian Hagerman has joined the team. Brian has more than three years experience in the pension field, including Moskal Gross Orchosky. He graduated from Liberty University in Lynchburg, Virginia and now lives in Litchfield with his wife and two daughters.

As we have outlined in the past in these letters, we continue to add to our team and hire ahead of our current needs. We want to be able to anticipate your needs and build capacity before it is needed. We are deeply committed to having multiple team members working on every client engagement. We feel that this provides you with better quality service, more timely responses, and a long term continuity plan for the critical planning work that we do for you. It allows our team members to specialize in their respective areas of expertise which provides you with better solutions. We believe it is a cornerstone of our strategic direction and a long term competitive advantage. We anticipate the need to continue to add great people to our team and we would encourage any of you who know people you think may make a good fit to direct them to Gerry Knotek who is in charge of our HR strategy. Gerry can be reached at gknotek@sequoia-financial.com

With the increasing size of our staff, we decided that it was time to upgrade our technology internally to allow us to better organize and track our interactions and activities with you. Some of you may be aware that we have used Goldmine as a relationship management tool for the past four years. In the second quarter of this year, we decided to purchase the Microsoft CRM solution. This solution will be much more robust and customizable than our current system. If we are updating your financial plan, managing your retirement assets, and helping you secure a loan for a vacation home, we will have immediate access to all of the information and status about each of these activities. We will have the ability to set service standards and hold ourselves accountable for meeting and exceeding these standards.

This is a major undertaking and we wanted to make sure that we had someone who had deep experience in business process and database systems to help us lead the charge. As such, we are pleased to announce that Audrey Gelis has joined our team. Audrey has over 25 years experience with KeyCorp and Equitec as a business analyst. In her most recent position with Equitec, Audrey directed the systems development life cycle for multifaceted client solution database offerings, including a role as project lead and business analyst on more complex system and software development efforts. Our plan has been to define our system and business requirements extensively first and then begin development of the database in late summer. We will run parallel for a defined test period and we hope to be live on the new system in early 2008. We are excited about the opportunity that this new system will offer us to serve you better.

In addition to our internal efforts to improve client service and delivery, I am pleased to let you know of my work with our primary business partners in this regard. For the past year, I have served on the ValMark Securities~ Member Advisory Board, and earlier this year, I was asked to serve on the Schwab Institutional Advisory Board. Both of these boards are comprised of advisors from across the country who help develop strategies and enhanced products, services and procedures. All of this means I can directly communicate ways to improve your client experience. If there are any issues in particular you would like to discuss, I hope you will let me know.

In closing, the entire team at Sequoia wants to thank you for your business and your support. We appreciate you and the confidence that you have placed in us. We will continue to work hard to exceed your expectations. I look forward to updating you again next quarter. In the interim, please do not hesitate to contact any of our team members with questions at any time.

Sincerely,

Sequoia Financial Advisors

Thomas A. Haught CFP^® ChFC

President