As filed with the Securities and Exchange Commission on August 29, 2008.

===============================================================================
                                                   1933 Act File No. 333-141457
                                                    1940 Act File No. 811-22039


                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  SCHEDULE 14A

           PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
                      EXCHANGE ACT OF 1934 (AMENDMENT NO.  )

Filed by the registrant [X]
Filed by a party other than the registrant [ ]

Check the appropriate box:

[X] Preliminary proxy statement.
[ ] Confidential, for use of the Commission only (as permitted by
    Rule 14a-6(e)(2)).
[ ] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Section 240.14a-12


      FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
      (Formerly known as First Trust/Gallatin Specialty Finance and
                      Financial Opportunities Fund)
--------------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)


--------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement if Other Than the Registrant)


Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

     (1) Title of each class of securities to which transaction applies:

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     (2) Aggregate number of securities to which transaction applies:

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     (3) Per unit price or other underlying value of transaction computed
         pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
         filing fee is calculated and state how it was determined):

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     (4) Proposed maximum aggregate value of transaction:

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     (5) Total fee paid:

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     [ ] Fee paid previously with preliminary materials.

     [ ] Check box if any part of the fee is offset as provided by Exchange
         Act Rule 0-11(a)(2) and identify the filing for which the offsetting
         fee was paid previously. Identify the previous filing by registration
         statement number, or the form or schedule and the date of its filing.

     (1) Amount Previously Paid:

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     (2) Form, Schedule or Registration Statement No.:

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     (3) Filing Party:

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     (4) Date Filed:







                                 PRELIMINARY COPY - DRAFT DATED AUGUST 29, 2008


      FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
                            (formerly known as
 First Trust/Gallatin Specialty Finance and Financial Opportunities Fund)

                          1001 Warrenville Road
                                Suite 300
                          Lisle, Illinois 60532

                            ____________, 2008

Dear Shareholder:

         The accompanying materials relate to the Special Meeting of
Shareholders (referred to as the "Meeting") of First Trust Specialty
Finance and Financial Opportunities Fund (formerly known as First
Trust/Gallatin Specialty Finance and Financial Opportunities Fund) (the
"Fund"). The Meeting will be held at the offices of counsel to the Fund,
Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603,
on Monday, November 17, 2008, at 4:00 p.m. Central Time.

         At the Meeting, you will be asked to vote on a proposal to
approve a new investment sub-advisory agreement among the Fund, First
Trust Advisors L.P. and Confluence Investment Management LLC and to
transact such other business as may properly come before the Meeting and
any adjournments thereof. The proposal is described in the accompanying
Notice of Special Meeting of Shareholders and Proxy Statement.

         Your participation at the Meeting is very important. If you
cannot attend the Meeting, you may participate by proxy. As a
Shareholder, you cast one vote for each share of the Fund that you own
and a proportionate fractional vote for any fraction of a share that you
own. Please take a few moments to read the enclosed materials and then
cast your vote on the enclosed proxy card.

         Voting takes only a few minutes. Each Shareholder's vote is
important. Your prompt response will be much appreciated.

         After you have voted on the proposal, please be sure to sign
your proxy card and return it in the enclosed postage-paid envelope.

         We appreciate your participation in this important Meeting.

         Thank you.

                                                Sincerely,


                                                James A. Bowen
                                                Chairman of the Board

-------------------------------------------------------------------------------
IF YOU NEED ANY ASSISTANCE, OR HAVE ANY QUESTIONS REGARDING THE PROPOSAL
OR HOW TO VOTE YOUR SHARES, CALL YOUR FUND'S PROXY SOLICITOR, THE ALTMAN
GROUP, AT (866) 530-8634 WEEKDAYS FROM 9:00 A.M. TO 10:00 P.M. EASTERN TIME.
-------------------------------------------------------------------------------





                   INSTRUCTIONS FOR SIGNING PROXY CARDS

         The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense involved in validating
your vote if you fail to sign your proxy card properly.

          1. Individual Accounts: Sign your name exactly as it appears in
the registration on the proxy card.

          2. Joint Accounts: Either party may sign, but the name of the
party signing should conform exactly to the name shown in the
registration.

          3. All Other Accounts: The capacity of the individual signing
the proxy should be indicated unless it is reflected in the form of
registration. For example:

REGISTRATION                                      VALID SIGNATURE

CORPORATE ACCOUNTS

(1)   ABC Corp.                                   ABC Corp.
(2)   ABC Corp.                                   John Doe, Treasurer
(3)   ABC Corp.
          c/o John Doe, Treasurer                 John Doe
(4)   ABC Corp. Profit Sharing Plan               John Doe, Trustee

TRUST ACCOUNTS

(1)   ABC Trust                                   Jane B. Doe, Trustee
(2)   Jane B. Doe, Trustee
          u/t/d 12/28/78                          Jane B. Doe

CUSTODIAL OR ESTATE ACCOUNTS

(1)   John B. Smith, Cust.
          f/b/o John B. Smith, Jr., UGMA          John B. Smith
(2)   John B. Smith                               John B. Smith, Jr., Executor






      FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
                            (formerly known as
 First Trust/Gallatin Specialty Finance and Financial Opportunities Fund)

                          1001 Warrenville Road
                                Suite 300
                          Lisle, Illinois 60532


                NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

                     To be held on November 17, 2008
_____________, 2008

To the Shareholders of the above Fund:

         Notice is hereby given that the Special Meeting of Shareholders
(referred to as the "Meeting") of First Trust Specialty Finance and
Financial Opportunities Fund (formerly known as First Trust/Gallatin
Specialty Finance and Financial Opportunities Fund) (the "Fund"), a
Massachusetts business trust, will be held at the offices of counsel to
the Fund, Chapman and Cutler LLP, 111 West Monroe Street, Chicago,
Illinois 60603, on Monday, November 17, 2008, at 4:00 p.m. Central Time,
for the following purposes:

                    1. To approve a new investment sub-advisory agreement
         among the Fund, First Trust Advisors L.P., as investment
         advisor, and Confluence Investment Management LLC, as investment
         sub-advisor.

                    2. To transact such other business as may properly
         come before the Meeting or any adjournments thereof.

         The Board of Trustees has fixed the close of business on Friday,
August 29, 2008 as the record date for the determination of Shareholders
entitled to notice of and to vote at the Meeting and any adjournments or
postponements thereof.

                                           By order of the Board of Trustees,


                                           W. Scott Jardine
                                           Secretary

-------------------------------------------------------------------------------
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE REQUESTED TO
PROMPTLY COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED
ENVELOPE WHICH DOES NOT REQUIRE POSTAGE IF MAILED IN THE CONTINENTAL
UNITED STATES. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE SET
FORTH ON THE INSIDE COVER. IF YOU NEED ANY ASSISTANCE, OR HAVE ANY
QUESTIONS REGARDING THE PROPOSAL OR HOW TO VOTE YOUR SHARES, CALL YOUR
FUND'S PROXY SOLICITOR, THE ALTMAN GROUP, AT (866) 530-8634 WEEKDAYS FROM
9:00 A.M. TO 10:00 P.M. EASTERN TIME.
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                   This page intentionally left blank.









      FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
                            (formerly known as
 First Trust/Gallatin Specialty Finance and Financial Opportunities Fund)


                     SPECIAL MEETING OF SHAREHOLDERS
                            November 17, 2008

                          1001 Warrenville Road
                                Suite 300
                          Lisle, Illinois 60532


                             PROXY STATEMENT

                           ______________, 2008

         This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Trustees (the "Board") of First
Trust Specialty Finance and Financial Opportunities Fund (formerly known
as First Trust/Gallatin Specialty Finance and Financial Opportunities
Fund) (the "Fund"), a Massachusetts business trust, for use at the
Special Meeting of Shareholders of the Fund to be held on Monday,
November 17, 2008, at 4:00 p.m. Central Time, at the offices of counsel
to the Fund, Chapman and Cutler LLP, 111 West Monroe Street, Chicago,
Illinois 60603, and at any adjournments or postponements thereof
(referred to collectively as the "Meeting"). A Notice of Special Meeting
of Shareholders and a proxy card accompany this Proxy Statement, and will
first be mailed to shareholders on or about ___________, 2008.

         The Meeting is being held to consider a proposal, described in
detail below, to approve a new investment sub-advisory agreement among
the Fund, First Trust Advisors L.P. ("First Trust Advisors" or the
"Advisor"), and Confluence Investment Management LLC ("Confluence"). On
June 2, 2008, Gallatin Asset Management, Inc. ("Gallatin" or the "Prior
Sub-Advisor") notified the Fund and the Advisor of its resignation as
sub-advisor to the Fund. As a result, the sub-advisory agreement among
the Fund, the Advisor and Gallatin terminated on July 31, 2008.
Currently, Confluence is providing sub-advisory services to the Fund
under an interim sub-advisory agreement which became effective on August
1, 2008, but has a maximum duration of 150 days.

         Proxy solicitations will be made, beginning on or about
_________________, 2008, primarily by mail. However, proxy solicitations
may also be made by telephone or personal interviews conducted by (i)
officers of the Fund; (ii) The Altman Group ("Altman"), a proxy
solicitor; (iii) First Trust Advisors; (iv) Confluence; (v) PNC Global
Investment Servicing (U.S.) Inc. ("PNC"), the administrator, accounting
agent and transfer agent of the Fund and a majority-owned subsidiary of
The PNC Financial Services Group, Inc.; or (vi) any affiliates of those
entities.

         The Fund's most recent annual and semi-annual reports are
available upon request, without charge, by writing to the Advisor at 1001
Warrenville Road, Suite 300, Lisle, Illinois 60532, by calling (800)
988-5891 or by visiting the Fund's website at
http://www.ftportfolios.com.

         The costs of preparing, printing and mailing this Proxy
Statement and its enclosures and all other costs in connection with the
solicitation of proxies (including amounts charged by Altman for its
proxy solicitation services, which amounts are expected to be
approximately $60,000), will be paid by the Advisor and Confluence. They







will also reimburse brokerage firms and others for their expenses in
forwarding solicitation materials to the beneficial owners of Fund
shares.

         If the enclosed proxy card is properly executed and returned in
time to be voted at the Meeting, the Fund shares represented thereby will
be voted in accordance with the instructions marked thereon. If no
instructions are marked on the enclosed proxy card, Fund shares
represented thereby will be voted at the discretion of the persons named
on the proxy card. Accordingly, unless instructions to the contrary are
marked thereon, a proxy will be voted FOR the proposal to approve the new
investment sub-advisory agreement and at the discretion of the named
proxies on any other matters that may properly come before the Meeting,
as deemed appropriate. Any shareholder who has given a proxy has the
right to revoke it at any time prior to its exercise either by attending
the Meeting and voting his or her shares in person, or by timely
submitting a letter of revocation or a later-dated proxy to the Fund at
the above address. A list of shareholders entitled to notice of and to be
present and to vote at the Meeting will be available at the offices of
Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603,
for inspection by any shareholder during regular business hours beginning
ten days prior to the date of the Meeting. Shareholders will need to show
valid identification and proof of share ownership to be admitted to the
Meeting or to inspect the list of shareholders.

         Under the By-Laws of the Fund, a quorum is constituted by the
presence in person or by proxy of the holders of thirty-three and
one-third percent (33-1/3%) of the voting power of the outstanding shares
entitled to vote on a matter. For the purposes of establishing whether a
quorum is present, all shares present and entitled to vote, including
abstentions and broker non-votes (i.e., shares held by brokers or
nominees as to which (i) instructions have not been received from the
beneficial owners or the persons entitled to vote and (ii) the broker or
nominee does not have discretionary voting power), shall be counted. Any
meeting of shareholders may be postponed prior to the meeting with notice
to the shareholders entitled to vote at that meeting. Any meeting of
shareholders may, by action of the chairman of the meeting, be adjourned
to permit further solicitation of proxies without further notice with
respect to one or more matters to be considered at such meeting to a
designated time and place, whether or not a quorum is present with
respect to such matter. In addition, upon motion of the chairman of the
meeting, the question of adjournment may be submitted to a vote of the
shareholders, and in that case, any adjournment must be approved by the
vote of holders of a majority of the shares present and entitled to vote
with respect to the matter or matters adjourned, and without further
notice. Unless a proxy is otherwise limited in this regard, any shares
present and entitled to vote at a meeting, including broker non-votes,
may, at the discretion of the proxies named therein, be voted in favor of
such an adjournment or adjournments.

         The close of business on August 29, 2008 has been fixed as the
record date (the "Record Date") for the determination of shareholders
entitled to notice of and to vote at the Meeting.

         The Fund has one class of shares of beneficial interest, par
value $0.01 per share, known as common shares ("Shares"). On the Record
Date, the Fund had _____ Shares outstanding. Shares of the Fund are
listed on the New York Stock Exchange under the ticker symbol "FGB."

         The vote of a majority of the outstanding voting securities will
be required for the approval of the new investment sub-advisory agreement
for the Fund. The "vote of a majority of the outstanding voting
securities" is defined in the Investment Company Act of 1940, as amended
(together with the rules and regulations thereunder, the "1940 Act"), as
the vote of the lesser of (i) 67% or more of the shares of the Fund
present at the Meeting if the holders of more than 50% of the outstanding
shares of the Fund are present in person or represented by proxy; or (ii)
more than 50% of the outstanding shares of the Fund. Abstentions and


                                   -2-





broker non-votes will have the effect of a vote against the proposal.
Shareholders of record on the Record Date are entitled to one vote for
each Share the shareholder owns and a proportionate fractional vote for
any fraction of a Share the shareholder owns.

         In order that your Shares may be represented at the Meeting, you
are requested to:

             o   indicate your instructions on the proxy card; o date and
                 sign the proxy card;

             o   mail the proxy card promptly in the enclosed envelope
                 which requires no postage if mailed in the continental
                 United States; and

             o   allow sufficient time for the proxy card to be received
                 by 4:00 p.m. Central Time, on Monday, November 17, 2008.
                 (However, proxies received after this date may still be
                 voted in the event the Meeting is adjourned or postponed
                 to a later date.)


                                   -3-





 PROPOSAL: APPROVAL OF A NEW INVESTMENT SUB-ADVISORY AGREEMENT FOR THE FUND

BACKGROUND AND REASON FOR VOTE

         On May 24, 2007, the Fund entered into a sub-advisory agreement
(the "May 2007 Sub-Advisory Agreement") with the Advisor and the Prior
Sub-Advisor, which was then a wholly-owned subsidiary of A.G. Edwards,
Inc. ("A.G. Edwards"). The May 2007 Sub-Advisory Agreement was originally
approved by the Board, including a majority of the Independent Trustees,
on April 16, 2007 and by the initial shareholder of the Fund on May 17,
2007. On May 31, 2007, A.G. Edwards and Wachovia Corporation ("Wachovia
Corp.") announced that they had agreed that Wachovia Corp. would acquire
A.G. Edwards, and that A.G. Edwards & Sons, Inc. (another wholly-owned
subsidiary of A.G. Edwards) would be combined with Wachovia Securities,
LLC ("Wachovia Securities"), a subsidiary of Wachovia Corp. (the
"Transaction"). The consummation of the Transaction on October 1, 2007
resulted in a change of control of the Prior Sub-Advisor, which
constituted an "assignment," as that term is used in the 1940 Act, of the
May 2007 Sub-Advisory Agreement. Pursuant to the terms of the May 2007
Sub-Advisory Agreement and the requirements of the 1940 Act, the May 2007
Sub-Advisory Agreement automatically terminated upon its assignment on
October 1, 2007. In anticipation of the termination of the May 2007
Sub-Advisory Agreement upon the closing of the Transaction, the Board
held a meeting held on September 21, 2007, at which it approved an
interim sub-advisory agreement which became effective on October 1, 2007
(the "October 2007 Interim Sub-Advisory Agreement") and, subject to
shareholder approval, a new sub-advisory agreement among the Fund, the
Advisor and the Prior Sub-Advisor (the "Prior Sub-Advisory Agreement"),
which was approved by shareholders of the Fund on, dated as of, and
became effective on, February 20, 2008.

         Under its terms, the Prior Sub-Advisory Agreement could be
terminated by the Prior Sub-Advisor upon sixty (60) days' written notice
to the Fund and the Advisor. On June 2, 2008, the Fund and the Advisor
received notice from the Prior Sub-Advisor of its intended resignation as
sub-advisor to the Fund (the "Resignation"). The Prior Sub-Advisor
indicated that, following personnel changes within its equity team, it
had conducted an internal review of its capabilities and resources and
determined that it was in the best interests of Fund shareholders and
itself to resign. The Resignation terminated the Prior Sub-Advisory
Agreement as of the close of business on July 31, 2008 (the "Termination
Date").

         Rule 15a-4 of the 1940 Act ("Rule 15a-4") provides a temporary
exemption from the shareholder approval requirement in Section 15(a) for
investment advisory contracts if a previous advisory contract was
terminated due to certain events, such as termination by the board of
trustees (a "Rule 15a-4 Event"). The termination of the Prior
Sub-Advisory Agreement because of the Resignation, however, is not a Rule
15a-4 Event, and accordingly, the exemption provided by Rule 15a-4 was
not available. The Fund therefore sought and obtained written no-action
assurance from the staff of the Securities and Exchange Commission (the
"SEC") dated July 11, 2008 that it would not recommend that the SEC take
enforcement action under Section 15(a) of the 1940 Act if the Fund and
the Advisor entered into an interim sub-advisory agreement that has not
been approved by shareholders, subject to certain terms and
representations, including that the interim sub-advisory contract would
comply with applicable provisions of Rule 15a-4. In accordance with the
foregoing and to ensure the continuity of portfolio management services
to the Fund after the Termination Date, at a meeting held on July 29,
2008, the Board of the Fund, including a majority of the Trustees who are
not "interested persons" of the Fund as that term is defined in the 1940
Act (such Trustees, the "Independent Trustees"), approved an interim
sub-advisory agreement among the Fund, the Advisor and Confluence (the


                                   -4-





"Interim Sub-Advisory Agreement"). The Interim Sub-Advisory Agreement is
currently in effect and will continue to be in effect for 150 days after
the Termination Date or until shareholders approve the New Sub-Advisory
Agreement (as defined below), whichever occurs first (unless terminated
sooner in accordance with its terms). At the meeting held on July 29,
2008, the Board, including a majority of the Independent Trustees, also
approved, subject to shareholder approval, a new investment sub-advisory
agreement among the Fund, the Advisor and Confluence (the "New
Sub-Advisory Agreement"), and recommended it be submitted to shareholders
for their approval.

CONFLUENCE INVESTMENT MANAGEMENT LLC

         General and Organizational Information

         Confluence, located at 349 Marshall Avenue, Suite 302, St.
Louis, Missouri 63119, is a recently formed registered investment
advisor. The investment professionals at Confluence have over 50 years of
aggregate portfolio management experience. As indicated below, three of
these professionals, who are currently serving as portfolio managers of
the Fund, also previously served as portfolio managers to the Fund while
they were employed by the Prior Sub-Advisor. Confluence provides
portfolio investment management and advisory services to both
institutional and individual clients. As of August 1, 2008, Confluence
managed or supervised over $500 million in assets.

         Confluence was organized as a Delaware limited liability company
in December 2007. Currently three members, Brian N. Hansen, Mark A.
Keller and Tortoise Capital Advisors, L.L.C. ("Tortoise L.L.C."), each
own interests of 25% or more in Confluence. Certain additional members of
the management team of Confluence each own interests in Confluence.
Tortoise L.L.C., a Delaware limited liability company organized in 2002,
is an investment advisor located at 11550 Ash Street, Suite 300, Leawood,
Kansas 66211. FCM Tortoise, L.L.C. ("FCM L.L.C.") and Kansas City Equity
Partners L.C. ("Kansas City L.C.") control Tortoise L.L.C. through their
equity ownership and management rights in Tortoise L.L.C. Kansas City
L.C. and FCM L.L.C. have no operations and serve as holding companies.
Each of the five Managing Directors of Tortoise L.L.C. own an equity
interest in either Kansas City L.C. or FCM L.L.C.

         The following chart lists the directors and principal executive
officers of Confluence and their business addresses and principal
occupations:



------------------------------  ------------------------------------   -------------------------------------------------
                                                                              POSITION(S) WITH CONFLUENCE AND
            NAME                              ADDRESS                               PRINCIPAL OCCUPATION
------------------------------  ------------------------------------   -------------------------------------------------
                                                                 
Mark A. Keller                  349 Marshall Avenue, Suite 302,        Member, Director, Chief Executive Officer,
                                St. Louis, Missouri 63119              Chief Investment Officer and Portfolio Manager
------------------------------  -------------------------------------  -------------------------------------------------
Brian N. Hansen                 349 Marshall Avenue, Suite 302,        Member, Director, President and Chief Operating
                                St. Louis, Missouri 63119              Officer
------------------------------  ------------------------------------   -------------------------------------------------
David J. Schulte                11550 Ash Street, Suite 300,           Director (Confluence); Manager (Tortoise L.L.C.)
                                Leawood, Kansas 66211
------------------------------  ------------------------------------  --------------------------------------------------
David B. Miyazaki               349 Marshall Avenue, Suite 302,       Senior Vice President and Portfolio Manager
                                St. Louis, Missouri 63119
------------------------------  ------------------------------------  --------------------------------------------------
Daniel T. Winter                349 Marshall Avenue, Suite 302,       Senior Vice President and Portfolio Manager
                                St. Louis, Missouri 63119
------------------------------  ------------------------------------  --------------------------------------------------
Patricia A. Dahl                349 Marshall Avenue, Suite 302,       Senior Vice President and Portfolio Manager
                                St. Louis, Missouri 63119
------------------------------  ------------------------------------  --------------------------------------------------
Joseph J. Hanzlik               349 Marshall Avenue, Suite 302,       Senior Vice President, Chief Financial Officer
                                St. Louis, Missouri 63119             and Chief Compliance Officer
------------------------------  ------------------------------------  --------------------------------------------------



                                   -5-





         Portfolio Manager Information

         The portfolio managers identified below are currently
responsible for the day-to-day management of the Fund's portfolio
pursuant to the Interim Sub-Advisory Agreement. In addition, they served
as portfolio managers to the Fund from the time of the Fund's inception
until May 2008 while they were portfolio managers with the Prior
Sub-Advisor. It is expected that they will continue to act as the Fund's
portfolio managers if shareholders approve the New Sub-Advisory
Agreement.

         Mark A. Keller. Mark Keller is Member and Director of, and the
Chief Executive Officer and Chief Investment officer of, Confluence. From
1994 to May 2008, Mr. Keller was the Chief Investment Officer of Gallatin
and its predecessor organization, A.G. Edwards Asset Management, the
investment arm of A.G. Edwards. From 1999 to 2008, Mr. Keller was
Chairman of the A.G. Edwards Investment Strategy Committee, which set
investment policy and established asset allocation models for the entire
organization. Mr. Keller began his career with A.G. Edwards in 1978,
serving as an equity analyst for the firm's Securities Research
Department ("Securities Research") from 1979 to 1994. During his last
five years in Securities Research, Mr. Keller served as equity strategist
and manager of the firm's Focus List. Mr. Keller was a Senior Vice
President of A.G. Edwards & Sons, Inc. and of Gallatin, and was a member
of the Board of Directors of both companies.

         David B. Miyazaki. David Miyazaki is a Senior Vice President and
portfolio manager of Confluence. Prior to joining Confluence in May 2008,
Mr. Miyazaki served as a portfolio manager and analyst with Gallatin. Mr.
Miyazaki was responsible for equity investments in value-oriented
separately managed accounts. In addition to acting as portfolio manager
to the Fund, he co-managed A.G. Edwards' exchange-traded fund based asset
allocation program. Mr. Miyazaki also served as a member of the A.G.
Edwards Investment Strategy Committee. As a strategist, he was
responsible for the firm's quantitative asset allocation models,
including its Cyclical Asset Allocation program. Prior to joining A.G.
Edwards in 1999, Mr. Miyazaki was a portfolio manager at Koch Industries
in Wichita, Kansas. His previous experience includes working as an
investment analyst at Prudential Capital Group in Dallas, Texas, and as a
bond trader at Barre & Company, also in Dallas.

         Daniel T. Winter. Daniel Winter is a Senior Vice President and
portfolio manager of Confluence. Prior to joining Confluence in May 2008,
Mr. Winter served as a portfolio manager and analyst with Gallatin. While
with Gallatin, Mr. Winter chaired the portfolio management team
responsible for the firm's six value-oriented equity strategies. His
responsibilities also included directing the strategy implementation and
trading execution for the equity portfolios. Mr. Winter also served as
portfolio manager for the Cyclical Growth ETF Portfolio and the Cyclical
Growth and Income ETF Portfolio which were offered through variable
annuities. In addition, he was a member of the firm's Allocation Advisor
Committee which oversaw the A.G. Edwards exchange-traded fund focused
strategies. Prior to joining the firm's Asset Management division in
1996, Mr. Winter served as portfolio manager for A.G. Edwards Trust Co.

   Certain Transactions Involving Confluence, First Trust Advisors and
                       First Trust Portfolios L.P.

         On May 7, 2008, First Trust Portfolios L.P. ("First Trust
Portfolios") paid $200,000 for an equity ownership interest in
Confluence. On June 30, 2008, First Trust Portfolios and Confluence
agreed to convert such equity ownership interest into debt. Accordingly,
First Trust Portfolios currently holds a promissory note from Confluence
with a stated principal amount of $200,000, an annual interest rate of
3.20% and a stated maturity date of June 30, 2015.


                                   -6-





         On August 25, 2008, Confluence and First Trust Advisors entered
into an agreement pursuant to which Confluence will provide certain
financial advisory services to First Trust Advisors for an annual fee of
$430,000. In addition, First Trust Advisors and Confluence entered into
an agreement as of May 7, 2008 pursuant to which Confluence assists in
providing sub-portfolio supervisory services to certain unit investment
trusts sponsored by First Trust Portfolios for an annual fee based on
$0.002 per unit.

         James A. Bowen is a Trustee of the Fund and an "interested
person" of the Fund as that term is defined in the 1940 Act (the
"Interested Trustee"). Mr. Bowen is President of the Fund, President of
First Trust Advisors and President of First Trust Portfolios. He also
holds an indirect interest in First Trust Advisors and First Trust
Portfolios by virtue of his ownership interest in Grace Partners of
DuPage L.P., the limited partner of such entities.

THE INTERIM SUB-ADVISORY AGREEMENT

         The terms of the Interim Sub-Advisory Agreement are
substantially similar to those of the Prior Sub-Advisory Agreement
(except that, along with applicable names and contact information for
Confluence, a different effective date and term have been included, a
provision that is no longer relevant concerning reimbursement by the
sub-advisor for certain organizational costs and offering costs has been
deleted, and a provision that the sub-advisor will assist in the
valuation of portfolio securities has been added) and the New
Sub-Advisory Agreement (except that, along with the new Fund name, a
different effective date and term have been included).

         The Interim Sub-Advisory Agreement is currently in effect and
will continue to be in effect for 150 days after the termination of the
Prior Sub-Advisory Agreement or until shareholders of the Fund approve
the New Sub-Advisory Agreement, whichever occurs first (unless terminated
sooner in accordance with its terms). If shareholders of the Fund do not
approve the New Sub-Advisory Agreement, the Board will take such action
as it deems to be in the best interests of the Fund, which might include
seeking approval of a new sub-advisory agreement or taking any other
steps deemed appropriate by the Board. In addition, the Interim
Sub-Advisory Agreement may be terminated by the Fund by action of the
Board or by a vote of a majority of the outstanding voting securities of
the Fund upon sixty days' written notice.

         The rate of compensation paid under the Interim Sub-Advisory
Agreement is the same as that paid under the Prior Sub-Advisory
Agreement.

COMPARISON OF THE NEW SUB-ADVISORY AGREEMENT AND PRIOR SUB-ADVISORY AGREEMENT

         The terms of the Fund's New Sub-Advisory Agreement, including
fees payable to the Sub-Advisor by the Advisor thereunder, are
substantially similar to those of the Fund's Prior Sub-Advisory
Agreement, except for the effective date and the differences noted below
under "Advisory Services," "Fees" and "Continuance."

         Below is a brief comparison of certain terms of the Prior
Sub-Advisory Agreement to the corresponding terms of the New Sub-Advisory
Agreement. For a more complete understanding of the New Sub-Advisory
Agreement, please refer to the form of the New Sub-Advisory Agreement
provided in Appendix A hereto. The summary below is qualified in all
respects by the terms and conditions of the form of New Sub-Advisory
Agreement.


                                   -7-





         Advisory Services. The advisory services to be provided by
Confluence to the Fund under the New Sub-Advisory Agreement will be very
similar to those advisory services provided by the Prior Sub-Advisor
under the Prior Sub-Advisory Agreement. Both the Prior Sub-Advisory
Agreement and the New Sub-Advisory Agreement provide that the sub-advisor
will furnish an investment program in respect of, make investment
decisions for, and place all orders for the purchase and sale of
securities for the Fund's investment portfolio, all on behalf of the Fund
and subject to the supervision of the Board and the Advisor. As was the
case under the Prior Sub-Advisory Agreement, under the New Sub-Advisory
Agreement, the sub-advisor is required to monitor the Fund's investments
and to comply with the provisions of the Fund's Declaration of Trust and
By-Laws and the stated investment objectives, policies and restrictions
of the Fund. In addition, under the New Sub-Advisory Agreement, the
sub-advisor will assist in the valuation of portfolio securities held by
the Fund as requested by the Advisor or the Fund.

         Brokerage. As was the case under the Prior Sub-Advisory
Agreement, the New Sub-Advisory Agreement authorizes the sub-advisor to
select the brokers or dealers that will execute the purchases and sales
of portfolio investments for the Fund, and directs the sub-advisor to use
its commercially reasonable efforts to obtain best execution, which
includes most favorable net results and execution of the Fund's orders,
taking into account all appropriate factors, including price, dealer
spread or commission, size and difficulty of the transaction and research
or other services provided.

         Fees. As was the case under the Prior Sub-Advisory Agreement,
under the New Sub-Advisory Agreement, the Advisor pays the sub-advisor a
portfolio management fee on a monthly basis. Both the Prior Sub-Advisory
Agreement and the New Sub-Advisory Agreement provide that for services
provided and expenses assumed, the Advisor will pay the sub-advisor a fee
equal to the annual rate of 0.50% of the Fund's "Managed Assets." The
term "Managed Assets" means the average daily gross asset value of the
Fund (including assets attributable to the Fund's preferred shares, if
any, and the principal amount of borrowings, if any), minus the sum of
the Fund's accrued and unpaid dividends on any outstanding preferred
shares and accrued liabilities (other than the principal amount of any
borrowings incurred, commercial paper or notes issued by the Fund). For
purposes of determining Managed Assets, the liquidation preference of any
outstanding preferred shares of the Fund is not treated as a liability.
Under the Prior Sub-Advisory Agreement, the sub-advisor agreed to pay the
Advisor one-half of certain organizational costs and offering costs;
however, given that these costs have been fully paid, the New
Sub-Advisory Agreement does not contain a similar provision.

         Payment of Expenses. As was the case under the Prior
Sub-Advisory Agreement, under the New Sub-Advisory Agreement, the
sub-advisor agrees to pay all expenses it incurs in connection with its
activities under such Agreement other than the cost of securities and
other assets (including brokerage commissions, if any) purchased for the
Fund.

         Limitation on Liability. As was the case under the Prior
Sub-Advisory Agreement, the New Sub-Advisory Agreement provides that the
sub-advisor will not be liable for, and the Fund and the Advisor will not
take any action against the sub-advisor to hold the sub-advisor liable
for, any error of judgment or mistake of law or for any loss suffered by
the Fund or the Advisor in connection with the performance of the
sub-advisor's duties under the Agreement, except for a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of
the sub-advisor in the performance of its duties under such Agreement, or
by reason of its reckless disregard of its obligations and duties under
such Agreement.


                                   -8-





         Continuance. The Prior Sub-Advisory Agreement provided that it
would be in effect for an initial term from February 20, 2008 until June
30, 2009 and could be continued thereafter for successive one-year
periods if such continuance was specifically approved at least annually
in the manner required by the 1940 Act. If the shareholders of the Fund
approve the New Sub-Advisory Agreement, the New Sub-Advisory Agreement
will expire two years after the date shareholders approve the New
Sub-Advisory Agreement, unless continued. Thereafter, the New
Sub-Advisory Agreement may be continued for successive one-year periods
if such continuance is specifically approved at least annually in the
manner required by the 1940 Act.

         Termination. As was the case under the Prior Sub-Advisory
Agreement, the New Sub-Advisory Agreement provides for termination at any
time without the payment of any penalty by the Advisor or the sub-advisor
upon 60 days' written notice to the other parties, and also provides for
termination by the Fund by action of the Board or by a vote of a majority
of the outstanding voting securities of the Fund upon 60 days' written
notice to the sub-advisor without the payment of any penalty.

         In addition, the Prior Sub-Advisory Agreement was, and the New
Sub-Advisory Agreement is, terminable at any time without the payment of
any penalty by the Advisor, by the Board or by vote of a majority of the
outstanding voting securities of the Fund in the event that it is
established by a court of competent jurisdiction that the sub-advisor or
any officer or director of the sub-advisor has taken any action that
results in a breach of the material covenants of the sub-advisor set
forth in the Agreement.

CERTAIN AMOUNTS PAID DURING FUND'S FIRST FISCAL YEAR

         The Fund's first fiscal year ended November 30, 2007. As of such
date, the aggregate fees paid by the Advisor to the Prior Sub-Advisor
were: (i) $424,765 under the May 2007 Sub-Advisory Agreement; and (ii)
$493,297 under the October 2007 Interim Sub-Advisory Agreement. In
addition, during its first fiscal year, the Fund paid to A.G. Edwards &
Sons, Inc. an aggregate amount of brokerage commissions equal to
$8,894.04 (which represented 1.75% of the Fund's aggregate brokerage
commissions paid during that time period).

BOARD CONSIDERATIONS

         The Board of Trustees of the Fund, including a majority of the
Independent Trustees, approved the Interim Sub-Advisory Agreement and the
New Sub-Advisory Agreement (collectively, the "Agreements") among the
Fund, the Advisor and Confluence at a meeting held on July 29, 2008. The
Board determined that the terms of the Agreements are fair and reasonable
and in the best interests of the Fund.

         On June 2, 2008, Gallatin notified the Fund and the Advisor of
its resignation as sub-advisor to the Fund, effective July 31, 2008 (the
"Resignation"). Gallatin indicated that, following personnel changes
within its equity team, it had conducted an internal review of its
capabilities and resources and determined that it was in the best
interests of Fund shareholders and Gallatin to resign. The Advisor
immediately notified the Board and thereafter conducted a review of
potential sub-advisors to replace Gallatin. The Board considered that
pursuant to the 1940 Act, any sub-advisory agreement with a replacement
sub-advisor would require shareholder approval prior to such sub-advisor
assuming its duties. In light of the short amount of time available to
the Fund and the Advisor to find a suitable replacement for Gallatin and
to obtain shareholder approval of a new sub-advisory agreement, the
Advisor worked with Fund counsel to obtain a "no-action letter" from the


                                   -9-





staff of the SEC. The "no-action letter" received on July 11, 2008 stated
that the staff would not recommend enforcement action to the SEC against
the Fund, the Advisor and any successor sub-advisor if the Fund and the
Advisor were to enter into an interim sub-advisory agreement without
first obtaining shareholder approval to cover the period while
shareholder approval of a new sub-advisory agreement was sought.

         Between the time the Fund and the Advisor received notice of the
Resignation and the July 29, 2008 special Board meeting, the Advisor
determined that two potential sub-advisors should be presented to the
Board for consideration as the successor sub-advisor. One of these
candidates - Confluence - employed three former Gallatin employees who
had served as the original portfolio managers of the Fund and managed the
Fund until they left Gallatin in May 2008. Prior to the meeting, each
potential sub-advisor provided to the Board written responses to
questions posed by independent legal counsel on behalf of the Independent
Trustees. At the meeting, representatives from Confluence and the other
potential sub-advisor made presentations to the Board and responded to
questions. The Board then discussed the presentations and the materials
provided. The Advisor recommended that Confluence be selected as
successor sub-advisor. The Independent Trustees then met separately with
their independent legal counsel to discuss the information provided by
the two potential sub-advisors and the Advisor. Based on their
consideration of all the information received, the Trustees appointed
Confluence as the interim sub-advisor to the Fund, pursuant to the
Interim Sub-Advisory Agreement, effective August 1, 2008. Also at the
special meeting, the Board approved the New Sub-Advisory Agreement and
determined to recommend it to shareholders of the Fund for their
approval. The Board noted that the Advisor and Confluence had agreed to
bear the costs associated with soliciting shareholder approval of the New
Sub-Advisory Agreement.

         To reach its determinations as to the Agreements, the Board
considered its duties under the 1940 Act, as well as under the general
principles of state law in reviewing and approving advisory contracts;
the requirements of the 1940 Act in such matters; the fiduciary duty of
investment advisors with respect to advisory agreements and compensation;
the standards used by courts in determining whether investment company
boards have fulfilled their duties; and the factors to be considered by
the Board in voting on such agreements. In its evaluation of the
Agreements, the Board considered a report from Confluence responding to a
request for information from counsel to the Independent Trustees. The
report, among other things, outlined the services to be provided by
Confluence (including the relevant personnel responsible for these
services and their experience, including their experience as former
portfolio managers for the Fund); the sub-advisory fee for the Fund as
compared to fees charged to other clients of Confluence; the potential
for economies of scale, if any; financial data on Confluence; any
fall-out benefits to Confluence; and information on Confluence compliance
program. The Board applied its business judgment to determine whether the
arrangements between the Fund, the Advisor and Confluence are reasonable
business arrangements from the Fund's perspective as well as from the
perspective of shareholders.

         In reviewing the Agreements, the Board considered the nature,
quality and extent of services to be provided by Confluence under the
Agreements. The Board noted Confluence's investment style and the
backgrounds of the investment personnel who would be responsible for the
day-to-day management of the Fund. The Board noted that the proposed
portfolio managers had previously managed the Fund as portfolio managers
at Gallatin and considered the benefits of maintaining continuity in the
management of the Fund. The Board considered, in particular, the
performance of the Fund during a very difficult market for financial
services companies when the Fund was managed by the proposed portfolio
managers. The Board considered the support and assistance provided by one
of the major investors in Confluence and its experience as a registered
investment advisor. In light of the information presented and the


                                   -10-





considerations made, the Board concluded that the nature, quality and
extent of services to be provided to the Fund by Confluence under the
Agreements are expected to be satisfactory.

         The Board considered the sub-advisory fees to be paid under each
Agreement, noting that they would be the same as the fees paid under the
current Sub-Advisory Agreement. The Board considered the proposed
sub-advisory fee and how it would relate to the overall management fee
structure of the Fund, noting that the fees to be paid to Confluence
would be paid by the Advisor from its advisory fee. On the basis of all
the information provided, the Board concluded that the sub-advisory fees
to be paid under the Agreements were reasonable and appropriate in light
of the nature, quality and extent of services expected to be provided by
Confluence under the Agreements.

         The Board considered that Confluence was unable to estimate the
profitability of the Agreements to Confluence, but the Board noted that
the sub-advisory fee rate was negotiated at arm's length between the
Advisor and Confluence, and that Confluence would be paid by the Advisor.
The Board noted that the overall management fee structure reflects an
appropriate level of sharing of any economies of scale. The Board also
considered the fall-out benefits expected to be realized by Confluence
from its relationship with the Fund. The Board noted that Confluence will
not utilize soft dollars in connection with its management of the Fund's
portfolio.

         Based on all of the information considered and the conclusions
reached, the Board, including a majority of the Independent Trustees,
determined that the terms of the Agreements are fair and reasonable and
that the approval of the Agreements is in the best interests of the Fund.
No single factor was determinative in the Board's analysis.

SHAREHOLDER APPROVAL AND REQUIRED VOTE

         To become effective, the New Sub-Advisory Agreement must be
approved by a vote of a majority of the outstanding voting securities of
the Fund. The "vote of a majority of the outstanding voting securities"
is defined in the 1940 Act as the vote of the lesser of (i) 67% or more
of the Shares of the Fund present at the Meeting if the holders of more
than 50% of the outstanding Shares of the Fund are present in person or
represented by proxy; or (ii) more than 50% of the outstanding Shares of
the Fund. For purposes of determining the approval of the New
Sub-Advisory Agreement, abstentions and broker non-votes will have the
effect of a vote against the proposal.

         THE BOARD OF TRUSTEES OF THE FUND RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL. If you need any assistance, or have any questions
regarding the proposal or how to vote your Shares, call your Fund's proxy
solicitor, The Altman Group, at (866) 530-8634 weekdays from 9:00 a.m. to
10:00 p.m. Eastern Time.


                                   -11-





                          ADDITIONAL INFORMATION

INFORMATION ABOUT THE ADVISOR

         First Trust Advisors L.P., 1001 Warrenville Road, Suite 300,
Lisle, Illinois 60532, serves as the Fund's investment advisor.

INFORMATION ABOUT THE ADMINISTRATOR, ACCOUNTING AGENT AND TRANSFER AGENT

         PNC acts as the Fund's administrator, accounting agent and
transfer agent and is located at 4400 Computer Drive, Westborough,
Massachusetts 01581. PNC is a leading provider of full service mutual
fund shareholder and record keeping services. In addition to its mutual
fund transfer agent and record keeping service, PNC provides other
services through its own subsidiary business units.

BENEFICIAL OWNERSHIP

         As indicated above, James A. Bowen is the Interested Trustee of
the Fund. The Independent Trustees of the Fund are: Richard E. Erickson,
Thomas R. Kadlec, Robert F. Keith and Niel B. Nielson. As of August 20,
2008, none of the Trustees or officers of the Fund beneficially owned any
Shares of the Fund.

         According to Schedule 13G filed with the SEC on June 17, 2008,
Old Lane Hedge Fund GP, LLC; Old Lane Partners, LP; Old Lane, LP; Old
Lane Partners GP, LLC; Old Lane Holdings, LP; and Old Lane Holdings GP,
LLC (collectively the "Old Lane Reporting Persons") reported that the Old
Lane Reporting Persons beneficially owned, and had shared voting power
and shared dispositive power over, 834,680 Shares, representing 5.9% of
the Shares of the Fund outstanding. The principal business address of the
Old Lane Reporting Persons is 500 Park Avenue, 2nd Floor, New York, New
York 10022.

         As of August 20, 2008, except as stated in the paragraph
immediately above, the Fund has no knowledge as to beneficial ownership
of more than 5% of the Fund's outstanding Shares by any single
shareholder or "group" (as that term is used in Section 13(d) of the
Securities Exchange Act of 1934 (the "1934 Act")). Information as to
beneficial ownership is based solely on reports filed with the SEC by
holders.

SHAREHOLDER PROPOSALS

         To be considered for presentation at the Annual Meeting of
Shareholders of the Fund to be held in 2009, a shareholder proposal
submitted pursuant to Rule 14a-8 of the 1934 Act must be received at the
offices of the Fund not later than November 19, 2008. Shareholder
proposals submitted pursuant to Rule 14a-8 of the 1934 Act should be sent
to the Fund at 1001 Warrenville Road, Suite 300, Lisle, Illinois 60532. A
shareholder proposal submitted in accordance with the Fund's By-Laws
should be submitted as described below.

         Under the Fund's By-Laws, any proposals by shareholders may only
be brought before an annual meeting of the Fund if timely written notice
(the "Shareholder Notice") is provided to the Secretary of the Fund. In
accordance with the advance notice provisions included in the Fund's
By-Laws, unless a greater or lesser period is required under applicable
law, to be timely, the Shareholder Notice must be delivered to or mailed
to and received at the principal executive offices of the Fund not less


                                   -12-





than forty-five (45) days nor more than sixty (60) days prior to the
first anniversary date of the date of the proxy statement released to
shareholders for the preceding year's annual meeting. However, if and
only if the annual meeting is not scheduled to be held within a period
that commences thirty (30) days before the first anniversary date of the
annual meeting for the preceding year and ends thirty (30) days after
such anniversary date (an annual meeting date outside such period being
referred to herein as an "Other Annual Meeting Date"), such Shareholder
Notice must be given as described above by the later of the close of
business on (i) the date forty-five (45) days prior to such Other Annual
Meeting Date or (ii) the tenth (10th) business day following the date
such Other Annual Meeting Date is first publicly announced or disclosed.
Shareholder Notices should be sent to the Fund at 1001 Warrenville Road,
Suite 300, Lisle, Illinois 60532, Attention: W. Scott Jardine.

         Timely submission of a proposal does not mean that such proposal
will be included in a proxy statement.

SHAREHOLDER COMMUNICATIONS

         Shareholders of the Fund who want to communicate with the Board
of Trustees or any individual Trustee should write the Fund to the
attention of the Fund Secretary, W. Scott Jardine. The letter should
indicate that you are a Fund shareholder. If the communication is
intended for a specific Trustee and so indicates, it will be sent only to
that Trustee. If a communication does not indicate a specific Trustee it
will be sent to the chairman of the Nominating and Governance Committee
of the Board and the outside counsel to the Independent Trustees for
further distribution as deemed appropriate by such persons.

FISCAL YEAR

         The fiscal year end for the Fund is November 30.

ANNUAL REPORT DELIVERY

         Annual reports will be sent to shareholders of record of the
Fund. The Fund will furnish, without charge, a copy of its annual report
and/or semi-annual report as available upon request. Such written or oral
requests should be directed to the Fund at 1001 Warrenville Road, Suite
300, Lisle, Illinois 60532 or by calling (800) 988-5891.

         Please note that only one annual or semi-annual report or proxy
statement may be delivered to two or more shareholders of the Fund who
share an address, unless the Fund has received instructions to the
contrary. To request a separate copy of an annual or semi-annual report
or proxy statement, or for instructions as to how to request a separate
copy of such documents or as to how to request a single copy if multiple
copies of such documents are received, shareholders should contact the
Fund at the address and phone number set forth above. Pursuant to a
request, a separate copy will be delivered promptly.


                                   -13-





                 OTHER MATTERS TO COME BEFORE THE MEETING

         No business other than the matter described above is expected to
come before the Meeting, but should any other matter requiring a vote of
shareholders arise, including any question as to an adjournment or
postponement of the Meeting, the persons named on the enclosed proxy card
will vote thereon according to their best judgment in the interests of
the Fund.

_____________, 2008

IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO
NOT EXPECT TO ATTEND THE MEETING ARE THEREFORE URGED TO COMPLETE, SIGN,
DATE AND RETURN THE PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.

-------------------------------------------------------------------------------
IF YOU NEED ANY ASSISTANCE, OR HAVE ANY QUESTIONS REGARDING THE PROPOSAL
OR HOW TO VOTE YOUR SHARES, CALL YOUR FUND'S PROXY SOLICITOR, THE ALTMAN
GROUP, AT (866) 530-8634 WEEKDAYS FROM 9:00 A.M. TO 10:00 P.M. EASTERN TIME.
-------------------------------------------------------------------------------




                                   -14-









                   This page intentionally left blank.








                                                                   APPENDIX A


              FORM OF NEW INVESTMENT SUB-ADVISORY AGREEMENT

         AGREEMENT made as of this [__] day of [________], 2008 by and
among First Trust Specialty Finance and Financial Opportunities Fund, a
Massachusetts business trust (the "Fund"), First Trust Advisors L.P., an
Illinois limited partnership (the "Manager") and a registered investment
adviser with the Securities and Exchange Commission ("SEC"), and
Confluence Investment Management LLC, a Delaware limited liability
company and a registered investment adviser with the SEC (the
"Sub-Adviser").

         WHEREAS, the Fund is a closed-end management investment company
registered under the Investment Company Act of 1940, as amended (the
"1940 Act");

         WHEREAS, the Fund has retained the Manager to serve as the
investment manager for the Fund pursuant to an Investment Management
Agreement between the Manager and the Fund (as such agreement may be
modified from time to time, the "Management Agreement");

         WHEREAS, the Management Agreement provides that the Manager may,
subject to the initial and periodic approvals required under Section 15
of the 1940 Act, appoint a sub-adviser at its own cost and expense for
the purpose of furnishing certain services required under the Management
Agreement; and

         WHEREAS, the Fund and the Manager desire to retain the
Sub-Adviser to furnish investment advisory services for the Fund's
investment portfolio, upon the terms and conditions hereafter set forth;

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:

          1. Appointment. The Fund and the Manager hereby appoint the
Sub-Adviser to provide certain sub-investment advisory services to the
Fund for the period and on the terms set forth in this Agreement. The
Sub-Adviser accepts such appointment and agrees to furnish the services
herein set forth for the compensation herein provided. The Sub-Adviser
shall, for all purposes herein provided, be deemed an independent
contractor and, unless otherwise expressly provided or authorized, shall
have no authority to act for nor represent the Fund or the Manager in any
way, nor otherwise be deemed an agent of the Fund or the Manager.

          2. Services to Be Performed. Subject always to the supervision
of the Fund's Board of Trustees and the Manager, the Sub-Adviser will act
as sub-adviser for, and manage on a discretionary basis the investment
and reinvestment of the assets of the Fund, furnish an investment program
in respect of, make investment decisions for, and place all orders for
the purchase and sale of securities for the Fund's investment portfolio,
all on behalf of the Fund and as described in the Fund's initial
registration statement on Form N-2 (File No. 333-141457) as declared
effective by the SEC, and as the same may thereafter be amended from time
to time. In the performance of its duties, the Sub-Adviser will in all
material respects (a) satisfy any applicable fiduciary duties it may have
to the Fund, (b) monitor the Fund's investments, (c) comply with the
provisions of the Fund's Declaration of Trust and By-laws, as amended
from time to time and communicated by the Fund or the Manager to the
Sub-Adviser in writing, and the stated investment objectives, policies
and restrictions of the Fund as such objectives, policies and
restrictions may subsequently be changed by the Fund's Board of Trustees


                                   A-1





and communicated by the Fund or the Manager to the Sub-Adviser in
writing, and (d) assist in the valuation of portfolio securities held by
the Fund as requested by the Manager or the Fund. The Fund or the Manager
has provided the Sub-Adviser with current copies of the Fund's
Declaration of Trust, By-laws, prospectus, statement of additional
information and any amendments thereto, and any objectives, policies or
limitations not appearing therein as they may be relevant to the
Sub-Adviser's performance under this Agreement.

         The Sub-Adviser is authorized to select the brokers or dealers
that will execute the purchases and sales of portfolio investments for
the Fund, and is directed to use its commercially reasonable efforts to
obtain best execution, which includes most favorable net results and
execution of the Fund's orders, taking into account all appropriate
factors, including price, dealer spread or commission, size and
difficulty of the transaction and research or other services provided.
Subject to approval by the Fund's Board of Trustees and compliance with
the policies and procedures adopted by the Board of Trustees for the Fund
and to the extent permitted by and in conformance with applicable law
(including Rule 17e-1 of the 1940 Act), the Sub-Adviser may select
brokers or dealers affiliated with the Sub-Adviser. It is understood that
the Sub-Adviser will not be deemed to have acted unlawfully, or to have
breached a fiduciary duty to the Fund, or be in breach of any obligation
owing to the Fund under this Agreement, or otherwise, solely by reason of
its having caused the Fund to pay a member of a securities exchange, a
broker or a dealer a commission for effecting a securities transaction
for the Fund in excess of the amount of commission another member of an
exchange, broker or dealer would have charged if the Sub-Adviser
determined in good faith that the commission paid was reasonable in
relation to the brokerage or research services provided by such member,
broker or dealer, viewed in terms of that particular transaction or the
Sub-Adviser's overall responsibilities with respect to its accounts,
including the Fund, as to which it exercises investment discretion.

         In addition, the Sub-Adviser may, to the extent permitted by
applicable law, aggregate purchase and sale orders of securities placed
with respect to the assets of the Fund with similar orders being made
simultaneously for other accounts managed by the Sub-Adviser or its
affiliates, if in the Sub-Adviser's reasonable judgment such aggregation
shall result in an overall economic benefit to the Fund, taking into
consideration the selling or purchase price, brokerage commissions and
other expenses. In the event that a purchase or sale of an asset of the
Fund occurs as part of any aggregate sale or purchase orders, the
objective of the Sub-Adviser and any of its affiliates involved in such
transaction shall be to allocate the securities so purchased or sold, as
well as expenses incurred in the transaction, among the Fund and other
accounts in a fair and equitable manner. Nevertheless, the Fund and the
Manager acknowledge that under some circumstances, such allocation may
adversely affect the Fund with respect to the price or size of the
securities positions obtainable or salable, and neither the Fund nor the
Manager shall object to any such fair and equitable allocation. Whenever
the Fund and one or more other investment advisory clients of the
Sub-Adviser have available funds for investment, investments suitable and
appropriate for each will be allocated in a manner believed by the
Sub-Adviser to be equitable to each, although such allocation may result
in a delay in one or more client accounts being fully invested that would
not occur if such an allocation were not made. Moreover, it is possible
that due to differing investment objectives or for other reasons, the
Sub-Adviser and its affiliates may purchase securities of an issuer for
one client and at approximately the same time recommend selling or sell
the same or similar types of securities for another client.

         The Sub-Adviser will not arrange purchases or sales of
securities between the Fund and other accounts advised by the Sub-Adviser
or its affiliates unless (a) such purchases or sales are in accordance
with applicable law (including Rule 17a-7 of the 1940 Act) and the Fund's


                                   A-2





policies and procedures, (b) the Sub-Adviser reasonably believes the
purchase or sale is in the best interests of the Fund, and (c) the Fund's
Board of Trustees has approved these types of transactions.

         The Fund may adopt policies and procedures that modify or
restrict the Sub-Adviser's authority regarding the execution of the
Fund's portfolio transactions provided herein. However, no such policy or
procedure shall be binding on the Sub-Adviser unless it is communicated
to the Sub-Adviser in writing.

         The Sub-Adviser will communicate to the officers and Trustees of
the Fund such information relating to transactions for the Fund as they
may reasonably request. In no instance will the Fund's portfolio
securities be knowingly purchased from or sold to the Manager, the
Sub-Adviser or any affiliated person of either the Fund, the Manager, or
the Sub-Adviser, except as may be permitted under the 1940 Act.

         The Sub-Adviser further agrees that it:

                   (a) will use the same degree of skill and care in
         providing such services as it uses in providing services to
         other accounts for which it has investment responsibilities
         under the Investment Advisers Act of 1940;

                   (b) will (i) conform in all material respects to all
         applicable rules and regulations of the SEC, (ii) comply in all
         material respects with all policies and procedures adopted by
         the Board of Trustees for the Fund and communicated to the
         Sub-Adviser in writing and (iii) conduct its activities under
         this Agreement in all material respects in accordance with any
         applicable law and regulations of any governmental authority
         pertaining to its investment advisory activities;

                   (c) will report to the Manager and to the Board of
         Trustees of the Fund on a quarterly basis and will make
         appropriate persons available for the purpose of reviewing with
         representatives of the Manager and the Board of Trustees on a
         regular basis at such times as the Manager or the Board of
         Trustees may reasonably request in writing regarding the
         management of the Fund, including, without limitation, review of
         the general investment strategies of the Fund, the performance
         of the Fund's investment portfolio in relation to relevant
         standard industry indices and general conditions affecting the
         marketplace and will provide various other reports from time to
         time as reasonably requested by the Manager or the Board of
         Trustees of the Fund; and

                   (d) will prepare and maintain such books and records
         with respect to the Fund's securities and other transactions for
         the Fund's investment portfolio as required for registered
         investment advisers under applicable law or as otherwise
         reasonably agreed to by the parties and will prepare and furnish
         the Manager and the Fund's Board of Trustees such periodic and
         special reports as the Board or the Manager may reasonably
         request. The Sub-Adviser further agrees that all records that it
         maintains for the Fund are the property of the Fund and the
         Sub-Adviser will surrender promptly to the Fund any such records
         upon the request of the Manager or the Fund (provided, however,
         that the Sub-Adviser shall be permitted to retain copies
         thereof); and shall be permitted to retain originals (with
         copies to the Fund) to the extent required under Rule 204-2 of
         the Investment Advisers Act of 1940 or other applicable law.


                                   A-3





          3. Expenses. During the term of this Agreement, the Sub-Adviser
will pay all expenses incurred by it in connection with its activities
under this Agreement other than the cost of securities and other assets
(including brokerage commissions, if any) purchased for the Fund.

          4. Additional Sub-Advisers. Subject to obtaining the initial
and periodic approvals required under Section 15 of the 1940 Act and the
approval of the Manager, the Sub-Adviser may retain one or more
additional sub-advisers at the Sub-Adviser's own cost and expense for the
purpose of furnishing one or more of the services described in Section 2
hereof with respect to the Fund. Retention of a sub-adviser hereunder
shall in no way reduce the responsibilities or obligations of the
Sub-Adviser under this Agreement and the Sub-Adviser shall be responsible
to the Fund for all acts or omissions of any sub-adviser in connection
with the performance of the Sub-Adviser's duties hereunder.

          5. Compensation. For the services provided and the expenses
assumed pursuant to this Agreement, the Manager will pay the Sub-Adviser,
and the Sub-Adviser agrees to accept as full compensation therefor, a
portfolio management fee (the "Management Fee") equal to the annual rate
of 0.50% of the Fund's Managed Assets (as defined below). For purposes of
calculating the Management Fee, Managed Assets means the average daily
gross asset value of the Fund (including assets attributable to the
Fund's Preferred Shares (as such term is defined in the Fund's
prospectus), if any, and the principal amount of borrowings, if any),
minus the sum of the Fund's accrued and unpaid dividends on any
outstanding Preferred Shares and accrued liabilities (other than the
principal amount of any borrowings incurred, commercial paper or notes
issued by the Fund). For purposes of determining Managed Assets, the
liquidation preference of any outstanding Preferred Shares of the Fund is
not treated as a liability. The Management Fee shall be payable in
arrears on or about the first day of each month during the term of this
Agreement.

         For the month and year in which this Agreement becomes effective
or terminates, there shall be an appropriate proration on the basis of
the number of days that the Agreement is in effect during the month and
year, respectively.

          6. Services to Others. The Fund and the Manager acknowledge
that the Sub-Adviser now acts, or may in the future act, as an investment
adviser to other managed accounts and as investment adviser or
sub-investment adviser to one or more other investment companies. In
addition, the Fund and the Manager acknowledge that the persons employed
by the Sub-Adviser to assist in the Sub-Adviser's duties under this
Agreement will not devote their full time to such efforts. It is also
agreed that the Sub-Adviser may use any supplemental research obtained
for the benefit of the Fund in providing investment advice to its other
investment advisory accounts and for managing its own accounts.

          7. Limitation of Liability. The Sub-Adviser shall not be liable
for, and the Fund and the Manager will not take any action against the
Sub-Adviser to hold the Sub-Adviser liable for, any error of judgment or
mistake of law or for any loss suffered by the Fund or the Manager
(including, without limitation, by reason of the purchase, sale or
retention of any security) in connection with the performance of the
Sub-Adviser's duties under this Agreement, except for a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser in the performance of its duties under this Agreement, or
by reason of its reckless disregard of its obligations and duties under
this Agreement.

          8. Term; Termination; Amendment. This Agreement shall become
effective on [__________] (the "Effective Date") provided that it has


                                   A-4





been approved in the manner required by the 1940 Act, and shall remain in
full force until [__________] unless sooner terminated as hereinafter
provided. This Agreement shall continue in force from year to year
thereafter, but only as long as such continuance is specifically approved
for the Fund at least annually in the manner required by the 1940 Act and
the rules and regulations thereunder; provided, however, that if the
continuation of this Agreement is not approved for the Fund, the
Sub-Adviser may continue to serve in such capacity for the Fund in the
manner and to the extent permitted by the 1940 Act and the rules and
regulations thereunder.

         This Agreement shall automatically terminate in the event of its
assignment and may be terminated at any time without the payment of any
penalty by the Manager or the Sub-Adviser upon sixty (60) days' written
notice to the other parties. This Agreement may also be terminated by the
Fund by action of the Board of Trustees of the Fund or by a vote of a
majority of the outstanding voting securities of the Fund upon sixty (60)
days' written notice to the Sub-Adviser by the Fund without payment of
any penalty.

         This Agreement may be terminated at any time without the payment
of any penalty by the Manager, the Board of Trustees of the Fund or by
vote of a majority of the outstanding voting securities of the Fund in
the event that it shall have been established by a court of competent
jurisdiction that the Sub-Adviser or any officer or director of the
Sub-Adviser has taken any action that results in a breach of the material
covenants of the Sub-Adviser set forth herein.

         The terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth in the
1940 Act and the rules and regulations thereunder.

         Termination of this Agreement shall not affect the right of the
Sub-Adviser to receive payments on any unpaid balance of the compensation
described in Section 5 earned prior to such termination and for any
additional period during which the Sub-Adviser serves as such for the
Fund, subject to applicable law.

          9. Compliance Certification. From time to time the Sub-Adviser
shall provide such certifications with respect to Rule 38a-1 under the
1940 Act, as are reasonably requested by the Fund or the Manager. In
addition, the Sub-Adviser will, from time to time, provide a written
assessment of its compliance program in conformity with current industry
standards that is reasonably acceptable to the Fund to enable the Fund to
fulfill its obligations under Rule 38a-1 under the 1940 Act.

         10. Notice. Any notice under this Agreement shall be sufficient
in all respects if given in writing and delivered by commercial courier
providing proof of delivery and addressed as follows or addressed to such
other person or address as such party may designate for receipt of such
notice.

  If to the Manager or the Fund:          If to the Sub-Adviser:

  First Trust Specialty Finance and       Confluence Investment Management LLC
  Financial Opportunities Fund            349 Marshall Avenue, Suite 302
  First Trust Advisors L.P.               St. Louis, Missouri  63119
  1001 Warrenville Road, Suite 300        Attention:  Brian N. Hansen, President
  Lisle, Illinois  60532
  Attention:  Secretary

         11. Limitations on Liability. All parties hereto are expressly
put on notice of the Fund's Declaration of Trust and all amendments


                                   A-5





thereto, a copy of which is on file with the Secretary of the
Commonwealth of Massachusetts, and the limitation of shareholder and
Trustee liability contained therein and a copy of which has been provided
to the Sub-Adviser prior to the date hereof. This Agreement is executed
on behalf of the Fund by the Fund's officers in their capacity as
officers and not individually and is not binding upon any of the
Trustees, officers or shareholders of the Fund individually but the
obligations imposed upon the Fund by this Agreement are binding only upon
the assets and property of the Fund, and persons dealing with the Fund
must look solely to the assets of the Fund for the enforcement of any
claims.

         12. Miscellaneous. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or effect.
This Agreement will be binding upon and shall inure to the benefit of the
parties hereto and their respective successors.

         13. Applicable Law. This Agreement shall be construed in
accordance with applicable federal law and (except as to Section 11
hereof, which shall be construed in accordance with the laws of
Massachusetts) the laws of the State of Illinois.

         14. Amendment, Etc. This Agreement may only be amended, or its
provisions modified or waived, in a writing signed by the party against
which such amendment, modification or waiver is sought to be enforced.

         15. Authority. Each party represents to the others that it is
duly authorized and fully empowered to execute, deliver and perform this
Agreement. The Fund represents that engagement of the Sub-Adviser has
been duly authorized by the Fund and is in accordance with the Fund's
Declaration of Trust and other governing documents of the Fund.

         16. Severability. Each provision of this Agreement is intended
to be severable from the others so that if any provision or term hereof
is illegal or invalid for any reason whatsoever, such illegality or
invalidity shall not affect the validity of the remaining provisions and
terms hereof; provided, however, that the provisions governing payment of
the Management Fee described in Section 5 are not severable.

         17. Entire Agreement. This Agreement constitutes the sole and
entire agreement of the parties hereto with respect to the subject matter
expressly set forth herein.


                                   A-6





         IN WITNESS WHEREOF, the Fund, the Manager and the Sub-Adviser
have caused this Agreement to be executed as of the day and year first
above written.

FIRST TRUST ADVISORS L.P.                 CONFLUENCE INVESTMENT MANAGEMENT LLC



By___________________________________     By____________________________________
     Title:__________________________         Title:____________________________



FIRST TRUST SPECIALTY FINANCE AND
    FINANCIAL OPPORTUNITIES FUND



By_________________________________
     Title:________________________




                                   A-7








                   This page intentionally left blank.








                            PROXY CARD
                   SPECIAL SHAREHOLDER MEETING
  FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
  (FORMERLY KNOWN AS FIRST TRUST/GALLATIN SPECIALTY FINANCE AND
                  FINANCIAL OPPORTUNITIES FUND)


PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM
PORTION IN THE ENCLOSED ENVELOPE.
--------------------------------------------------------------------------------



--------------------------------------------------------------------------------
Proxy - FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
--------------------------------------------------------------------------------

PROXY SOLICITED BY THE BOARD OF TRUSTEES
SPECIAL MEETING ON NOVEMBER 17, 2008

The undersigned holder of shares of the First Trust Specialty Finance and
Financial Opportunities Fund, formerly known as First Trust/Gallatin
Specialty Finance and Financial Opportunities Fund (the "Fund"), a
Massachusetts business trust, hereby appoints W. Scott Jardine, Mark R.
Bradley, Kristi A. Maher, James M. Dykas and Erin E. Chapman as attorneys
and proxies for the undersigned, with full powers of substitution and
revocation, to represent the undersigned and to vote on behalf of the
undersigned all shares of the Fund that the undersigned is entitled to
vote at the Special Meeting of Shareholders of the Fund (the "Meeting")
to be held at the offices of counsel to the Fund, Chapman and Cutler LLP,
111 West Monroe Street, Chicago, Illinois 60603, at 4:00 p.m. Central
time on the date indicated above, and any adjournments and postponements
thereof. The undersigned hereby acknowledges receipt of the Notice of
Special Meeting of Shareholders and the Proxy Statement dated [DATE], and
hereby instructs said attorneys and proxies to vote said shares as
indicated hereon. In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the Meeting. A
majority of the proxies present and acting at the Meeting in person or by
substitute (or, if only one shall be so present, then that one) shall
have and may exercise all of the power and authority of said proxies
hereunder. The undersigned hereby revokes any proxy previously given.


PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE.





FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
(FORMERLY KNOWN AS FIRST TRUST/GALLATIN SPECIALTY FINANCE AND
FINANCIAL OPPORTUNITIES FUND)

MR. A SAMPLE
DESIGNATION (IF ANY)
ADD 1
ADD 2
ADD 3
ADD 4
ADD 5
ADD 6


Using a BLACK INK pen, mark your
votes with an X as shown in this
example. Please do not write
outside the designated areas.          [X]

           ---------------------------------------------------
                        Special Meeting Proxy Card
           ---------------------------------------------------


         PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE
                 BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
 -----------------------------------------------------------------------------


A Proposal -- The Board of Trustees recommends a vote FOR the Proposal.

                                                        For    Against   Abstain
1. Approval of New Investment Sub-Advisory Agreement    [ ]      [ ]       [ ]

This proxy, if properly executed, will be voted in the manner
directed by the undersigned shareholder.

IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSAL.

B   Non-Voting Items

Change of Address -- Please print new address below.

Comments -- Please print your comments below.


C   Authorized Signature(s) -- This section must be completed for your
    vote to be counted. -- Date and Sign Below

Please sign exactly as your name appears on this Proxy. If joint
owners, EITHER may sign this proxy. When signing as attorney,
executor, administrator, trustee, guardian or corporate officer,
please give full title.

Date (mm/dd/yyyy) -- Please print date below.

----/----/----

Signature 1 -- Please keep signature within the box.

---------------------------------------

Signature 2 -- Please keep signature with the box.

----------------------------------------