SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


|X|  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the quarterly period ended March 31, 2004.

                                       OR

| |  Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 For the transition period from ____________ to
     ______________

                           Commission File No: 0-29337

                      SUMMIT FINANCIAL SERVICES GROUP, INC.
             (Exact name of registrant as specified in its charter)

         Florida                                           05-0577932
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

                            980 North Federal Highway
                                    Suite 310
                              Boca Raton, FL 33432
                                 (561) 338-2800

   (Address, including zip code, and telephone number, including area code, of
                    Registrant's principal executive offices)


        Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

                                 |X| Yes | | No

State the number of shares outstanding of each of the issuer's classes of common
--------------------------------------------------------------------------------
equity, as of the latest practicable date:
------------------------------------------

            Class                                 Outstanding as of May 17, 2004
            -----                                 ------------------------------
         Common Stock
  Par value $.0001 per share                                 28,174,671



Transitional Small Business Disclosure Format | | Yes  |X| No


<PAGE>


<TABLE>
<CAPTION>
                      SUMMIT FINANCIAL SERVICES GROUP, INC.

                                      INDEX
<S>                                                                                                            <C>
The following items are amended:
                                                                                                               Page

PART I - FINANCIAL INFORMATION:
  Item 1. Financial Statements

          Condensed Consolidated Statement of Financial Condition at March 31, 2004 (unaudited)                  3

          Condensed Consolidated Statements of Income (Loss) for the Three Months ended
          March 31, 2004 and 2003 (unaudited)                                                                    4

          Condensed Consolidated Statements of Cash Flows for the Three Months Ended
          March 31, 2004 and 2003 (unaudited)                                                                    5

          Notes to Unaudited Condensed Consolidated Financial Statements (unaudited)                             6

  Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations                 10

  Item 3. Controls and Procedures                                                                               13

PART II - OTHER INFORMATION

  Item 6. Exhibits and Reports on Form 8-K                                                                      14

SIGNATURES                                                                                                      16
</TABLE>

                           FORWARD LOOKING STATEMENTS

     This Report contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"). When used in this Report, the words "may," "will," "expect,"
"anticipate," "continue," "estimate," "project" or "intend" and similar
expressions identify forward-looking statements regarding events, conditions and
financial trends in connection with our future plan of operations, business
strategy, operating results and financial position. Discussions containing such
forward-looking statements may be found in "Management's Discussion and Analysis
of Financial Condition and Results of Operations." Current shareholders and
prospective investors are cautioned that any forward-looking statements are not
guarantees of future performance. Such forward-looking statements by their
nature involve substantial risks and uncertainties, certain of which are beyond
the Company's control, and actual results for future periods could differ
materially from those discussed in this Report, depending on a variety of
important factors, among which are the success or failure of management's
efforts to implement its business strategy; the level of acquisition
opportunities available to the Company and the Company's ability to price and
negotiate such transactions on a favorable basis; the Company's ability to
properly manage growth and successfully integrate acquired companies and
operations; the Company's ability to compete with major established companies;
the Company's ability to attract and retain qualified personnel; economic and
financial market conditions generally; and other risks and uncertainties which
may be described from time to time in the Company's filings with the Securities
and Exchange Commission (the "SEC"), including the Company's annual report on
Form 10-KSB for the fiscal year ended December 31, 2003 (file no. 0-29337.)

                                       2
<PAGE>


                                     PART I.
Item 1. Financial Statements


<TABLE>
<CAPTION>
<S>                                                                                <C>                       <C>
SUMMIT FINANCIAL SERVICES GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Financial Condition
March 31, 2004 (Unaudited)
---------------------------------------------------------------------------------------------------------------------------


                                                          ASSETS
 Cash and cash equivalents                                                                                       2,894,119
 Deposit held at clearing broker                                                                                    76,028
 Securities owned                                                                                                    2,580
 Commissions receivable                                                                                            933,413
 Prepaid expenses                                                                                                   94,289
 Other receivables, net                                                                                             47,823
 Goodwill & customer list, net                                                                                   1,373,242
 Property and equipment at cost, less accumulated depreciation of $13,266                                           61,168
                                                                                                              -------------

                                                                                         TOTAL ASSETS            5,482,662
                                                                                                              =============

                                           LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

 Accounts payable and accrued expenses                                                                             744,141
 Accrued commission expense                                                                                        884,523
 Note payable, net                                                                                               1,115,981
                                                                                                              -------------
                                                                                    TOTAL LIABILITIES            2,744,645

STOCKHOLDERS' EQUITY
 Preferred stock, 150,000 authorized shares designated as Series A                                                      13
  12% cumulative convertible; par value $0.0001 per share; 125,000 Series A issued
  and outstanding (liquidation preference of $125,000)
 Common stock, par value $0.0001 per share; authorized 60,000,000 shares;                                            2,819
  28,189,583 issued and 28,174,671 outstanding
 Additional paid-in capital                                                                                      8,824,555
 Unearned stock compensation                                                                                      (559,473)
 Treasury stock (at cost)                                                                                          (10,884)
 Accumulated deficit                                                                                            (5,519,013)
                                                                                                              -------------

                                                                           TOTAL STOCKHOLDERS' EQUITY            2,738,017
                                                                                                              -------------

                                                           TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            5,482,662
                                                                                                              =============
See accompanying notes to unaudited condensed consolidated financial statements.
</TABLE>

                                       3
<PAGE>


SUMMIT FINANCIAL SERVICES GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income (Loss)
--------------------------------------------------------------------------------

                                                      For The Three Months Ended
                                                              March 31,
                                                     ---------------------------
                                                         2004           2003
                                                     ------------   ------------
                                                     (Unaudited)     (Unaudited)
REVENUES
 Commissions                                           4,789,757    $ 1,814,380
 Interest and dividends                                  132,919        104,197
 Other                                                    97,112         17,702
                                                     ------------   ------------
                                                       5,019,788      1,936,279
                                                     ------------   ------------

EXPENSES
 Commissions and clearing costs                        3,857,671      1,372,974
 Employee compensation and benefits                      604,128        559,248
 Occupancy and equipment                                 111,489        124,753
 Communications                                           95,556         81,907
 Professional expenses                                   114,393        125,814
 Depreciation and amortization                            52,352         44,521
 Other operating expenses                                118,702        108,463
                                                     ------------   ------------
                                                       4,954,291      2,417,680
                                                     ------------   ------------
       NET INCOME (LOSS) BEFORE INCOME TAXES              65,497       (481,401)

PROVISION FOR INCOME TAXES                                     -              -
                                                     ------------   ------------

             NET INCOME (LOSS)                            65,497       (481,401)
                                                     ============   ============

BASIC INCOME (LOSS) PER SHARE                               $.00          ($.02)
                                                     ============   ============
DILUTED INCOME (LOSS) PER SHARE                             $.00          ($.02)
                                                     ============   ============

WEIGHTED AVERAGE SHARES OUTSTANDING

              BASIC                                    28,139,016     20,699,688
                                                     ============   ============
              DILUTED                                  30,521,067     20,669,688
                                                     ============   ============


See accompanying notes to unaudited condensed consolidated financial statements.

                                       4
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                    <C>                 <C>
SUMMIT FINANCIAL SERVICES GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
-------------------------------------------------------------------------------------------------------------------------
                                                                                         For The Three Months Ended
                                                                                                 March 31,
                                                                                        ---------------------------------
                                                                                            2004                2003
                                                                                        ------------        -------------
                                                                                        (Unaudited)          (Unaudited)
Cash flows from operating activities
   Net income / (loss)                                                                       65,497         $   (481,401)
   Adjustments to reconcile net income (loss) to net cash used in
    operating activities
       Depreciation                                                                           4,771               12,800
       Stock based compensation / consultant expenses                                        30,183              106,212
       Amortization of customer list and imputed interest                                    61,558               52,592
       Changes in:
           Deposit held at clearing broker                                                      (11)                (755)
           Deposit held at clearing broker - related party                                                        (4,541)
           Commissions receivable                                                          (553,001)            (244,826)
           Other receivables                                                                 51,989              (25,053)
           Prepaid expenses and other                                                       (11,151)             (42,175)
           Securities owned                                                                     255                    -
           Due from related parties                                                               -              (50,923)
           Accounts payable and accrued expenses                                             18,690              (44,634)
           Accrued commission expense                                                       233,019              175,576
                                                                                        ------------        -------------
                Net cash used in operating activities                                       (98,201)            (547,128)
                                                                                        ------------        -------------


Cash flows from investing activities
   Purchase of property and equipment                                                        (1,513)                (590)


Cash flows from financing activities
   Issuance of common stock                                                                       -              960,000
   Payment of preferred stock dividend                                                       (3,000)              (3,000)
   Purchase of treasury stock                                                                     -               (4,769)
   Common stock offering costs                                                                    -              (80,329)
   Payments on debt obligations                                                            (114,284)            (114,720)
                                                                                        ------------        -------------
       Net cash (used in) provided by financing activities                                 (117,284)             757,182
                                                                                        ------------        -------------

Net (decrease) increase in cash and cash equivalents                                       (216,998)             209,464

Cash and cash equivalents at beginning of period                                          3,111,117            1,607,674
                                                                                        ------------        -------------

Cash and cash equivalents at end of period                                              $ 2,894,119         $  1,817,138
                                                                                        ============        =============


                     See accompanying notes to unaudited condensed consolidated financial statements.
</TABLE>

                                       5
<PAGE>


             SUMMIT FINANCIAL SERVICES GROUP, INC. AND SUBSIDIARIES

                    Notes to UNAUDITED condensed Consolidated
                              Financial Statements

                                 March 31, 2004


NOTE 1 - GENERAL

     The condensed consolidated financial statements for the three month periods
     ended March 31, 2004 and March 31, 2003 reflect all adjustments (consisting
     only of normal recurring adjustments) which are, in the opinion of
     management, necessary for a fair presentation of the financial position and
     operating results for the interim periods. The consolidated financial
     statements herein should be read in conjunction with the consolidated
     financial statements and notes thereto, together with management's
     discussion and analysis of financial condition and results of operations,
     contained in the Annual Report on Form 10-KSB for the fiscal year ended
     December 31, 2003 for Summit Financial Services Group, Inc. ("Summit" or
     the "Company"). The results of operations for the three month period ended
     March 31, 2004 are not necessarily indicative of the results for the entire
     fiscal year ending December 31, 2004.

     In the event the Company's operations are negatively impacted by downturns
     in the economy, in general, or the financial markets, in particular, the
     Company may need to raise or borrow additional funds to support its
     operating requirements. There can be no assurance that any such sources of
     financing would be available when needed, on commercially reasonable terms,
     or at all. Also, in the normal course of business, the Company evaluates
     acquisitions of businesses that compliment its business. In connection with
     any acquisitions, the Company may issue additional securities, which could
     result in dilution for existing shareholders.


                                       6
<PAGE>

NOTE 2 - STOCKHOLDERS' EQUITY

     On June 3, 2003, we entered into an agreement with a vendor to issue shares
     of our common stock in exchange for past and future services. As we become
     obligated under the agreement to issue shares, we record an expense equal
     to the number of shares required to be issued multiplied by the fair market
     value of our shares at the time such obligation arises. Until such time as
     the shares are actually issued, we include their fair market value in
     accounts payable. For the quarter ended March 31, 2004, the Company was
     obligated to issue approximately 7,000 shares of its common stock.

     Basic earnings per share is computed by dividing the net income available
     to common shareholders for the relevant period, by the weighted average
     number of shares of common stock issued and outstanding during the period.
     For purposes of calculating diluted earnings per share for the three months
     ended March 31, 2004 and 2003, the denominator includes both the weighted
     average number of shares of common stock and the number of dilutive common
     stock equivalents. The number of dilutive common stock equivalents includes
     the effect of stock options calculated using the treasury stock method.

     The Company has 6,426,444 shares issuable under various options and
     warrants, as well as 143,750 shares issuable upon conversion of its
     preferred stock, which shares have not been included in the dilutive
     calculation because their effect was antidilutive.

     Preferred stock dividends in arrears as of March 31, 2004 approximated
     $19,500.

     Stock-Based Awards

     In December 2002, the Financial Accounting Standards Board ("FASB") issued
     Statement of Financial Accounting Standards No. 148, "Accounting for
     Stock-Based Compensation - Transition and Disclosure" ("SFAS No. 148").
     SFAS No. 148 provides companies alternative methods of transitioning to
     Statement of Financial Accounting Standards No. 123 "Accounting for
     Stock-Based Compensation" ("SFAS No. 123") fair value of accounting for
     stock-based employee compensation. It also requires certain disclosure
     requirements in both annual and quarterly financial statements about the
     method of accounting for stock based employee compensation and the effect
     of the method used on reported results. SFAS No. 148 does not mandate fair
     value accounting for stock-based employee compensation, but does require
     all companies to meet the disclosure requirements. The Company has not
     adopted fair value accounting for its employee stock options.

                                       7
<PAGE>


     The Company currently accounts for its employee stock-based compensation
     arrangements using the intrinsic value method under the provisions of
     Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
     Employees" ("APB No. 25"). The Company accounts for stock-based
     compensation of non-employees using the fair market value method under the
     provisions of SFAS No. 123. Most often, options are granted for the
     provision of future services, such as continued employment or, in the case
     of independent registered representatives, their affiliation with Summit.
     Consequently, the options typically provide for vesting over a period of
     years, with a certain percentage of the options vesting each year upon the
     anniversary date of the grant (to the extent the grantee is still
     affiliated with the Company). In certain instances, unearned stock
     compensation is recorded for options issued to either employees or
     non-employees for services to be rendered in the future. Any unearned stock
     compensation is generally amortized over the period the underlying options
     are earned, which is typically the vesting period. SFAS No. 123 also
     requires that companies electing to continue to use the intrinsic value
     method for options issued to employees make pro forma disclosure of net
     income and net income per share as if the fair value method of accounting
     had been applied. The Company used the Black-Scholes option-pricing model
     to estimate the fair value of these options. The effects of applying SFAS
     No. 123 during the periods ended March 31, 2004 and 2003 are as follows:

                                                           3 Months Ended
                                                     ---------------------------
                                                      March 31,       March 31,
                                                        2004             2003
                                                     ---------------------------

      Net income (loss) as reported:                 $   65,497      $ (481,401)
      Deduct:  Additional stock-based
      compensation expense determined under
      fair value based method for all awards,
      net of related tax effects                        (72,215)       (127,000)
                                                     ---------------------------
        Pro forma net loss                           $   (6,718)     $ (608,401)
                                                     ===========================

      Net loss per share:

        Basic and diluted - as reported              $     0.00      $    (0.02)
                                                     ===========================
        Basic and diluted - pro forma                $    (0.00)     $    (0.03)
                                                     ===========================

     The fair value of each option grant is estimated at the date of grant using
     a Black-Scholes option pricing model. The Black-Scholes option valuation
     model was developed for use in estimating the fair value of traded options,
     which have no vesting restrictions and are fully transferable. In addition,
     option valuation models require the input of highly subjective assumptions
     including the expected stock price volatility. Because the Company's
     employee stock options have characteristics significantly different from
     those of traded options, and because changes in the subjective input
     assumptions can materially affect the fair value estimate, in management's
     opinion, the existing models do not necessarily provide a reliable single
     measure of the fair value of its employee stock options.

NOTE 3 - INCOME TAXES

     The estimated income tax expense for the three months ended March 31, 2004
     of approximately $22,000 has been fully offset by the use of the Company's
     net operating loss carryforward.


NOTE  4 - NET CAPITAL REQUIREMENT

     The Company is subject to the Securities and Exchange Commission Uniform
     Net Capital rule (SEC Rule 15c3-1), which requires the maintenance of
     minimum net capital and requires that the ratio of aggregate indebtedness
     to net capital, both as defined, shall not exceed 15 to 1. At March 31,
     2004, the Company had net capital of $2,118,476, which was $1,868,470 in
     excess of its required minimum net capital of $250,000. The Company's
     aggregate indebtedness to net capital ratio was 1.30 to 1 at March 31,
     2004.

                                       8
<PAGE>

NOTE 5 - CONTINGENCIES

     The Company is a party to legal proceedings relating to various claims and
     lawsuits arising in the normal course of business. Management has provided
     an accrual for estimated probable losses which could result from these
     matters. Management believes that the range of potential net losses
     resulting from these proceedings in excess of the accrued amount will not
     be material to the Company's financial position or results of operations.

                                       9
<PAGE>


Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

     The following discussion and analysis of the Company's financial condition
and results of its operations for the three month periods ended March 31, 2004
and 2003 should be read in conjunction with the Company's condensed consolidated
financial statements included elsewhere herein. When used in the following
discussions, the words "believes," "anticipates," "intends," "expects," and
similar expressions are intended to identify forward-looking statements. Such
statements are subject to certain risks and uncertainties, which could cause
results to differ materially from those projected.

Overview

     We are a Florida-based financial services holding company that provides,
through our Summit Brokerage Services, Inc. ("Summit Brokerage" or "Summit")
operating subsidiary, a broad range of securities brokerage and investment
services to primarily individual investors. Summit Brokerage also sells
insurance products, predominantly fixed and variable annuities and life
insurance, through its SBS Insurance Agency of Florida, Inc. ("SBSIA")
subsidiary. Through its registered investment advisor subsidiary, Summit
Financial Group, Inc. ("SFG"), Summit Brokerage provides asset management
services.

     Effective March 2, 2004, Summit Brokerage reorganized into a holding
company structure (the "Reorganization"), whereby Summit Brokerage became our
wholly-owned subsidiary and we became the parent of Summit Brokerage and the
successor reporting company under the Exchange Act. Prior to the
Reorganization, the common stock of Summit Brokerage was registered under
Section 12(b) of the Exchange Act. Upon the consummation of the Merger, our
common stock was automatically deemed registered under Section 12(b) of the
Exchange Act pursuant to Rule 12g-3(a) of the Exchange Act, and as such, we
succeeded to Summit Brokerage as the reporting company under the Exchange Act.
Our common stock commenced trading on the Over-The-Counter Bulletin Board under
the symbol "SFNS" on March 2, 2004

     Summit Brokerage is a financial services firm that provides full service
retail securities brokerage through its network of approximately 150 registered
representatives serving retail and, to a much lesser extent, institutional
customer accounts. With the exception of our Boca Branch, which we acquired from
Wachovia Securities in January 2003, our approximately 70 other branch offices
are owned and operated by independent owners who maintain all appropriate
licenses and are responsible for all office overhead and expenses. Because these
independent operators, many of whom are financial planners, are required to pay
their own expenses, we generally pay them a much greater percentage of the
commissions and fee income they generate, typically 80% - 90%.

     Our registered representatives offer a broad range of investment products
and services. These products and services allow us to generate both commissions
(from the sale of securities and other investment products) and fee income (for
providing investment advisory services, namely managing a client's account). The
investment products and services offered include mutual funds, annuities,
insurance, individual stocks and bonds, and managed money accounts.

     Summit is registered as a broker-dealer with the Securities and Exchange
Commission, and is a member of NASD, the Securities Investor Protection
Corporation and the Municipal Securities Rulemaking Board. We are licensed to
conduct our brokerage activities in 49 states, as well as the District of
Columbia. Our Registered Investment Advisor, Summit Financial Group, Inc., is
licensed to conduct business in 27 states.

     Summit is a fully-disclosed broker dealer, and therefore relies on its
clearing firms to provide the back office support and transaction processing
services necessary to effect transactions on all principal national and
international securities exchanges. Additionally, because the clearing firms
provide us with access to many other financial products and services that we
would not otherwise be able to offer, we are able to provide our clients with
products and services comparable to much larger brokerage firms. In exchange for
providing these services, the clearing firms typically charge us a fee every
time they effect a transaction on behalf of the firm or its clients. We have a
clearing arrangement with First Clearing, LLC (a joint venture between Wachovia
Corporation and Prudential) and with RBC Dain Correspondent Services, Inc. (a
division of RBC Dain Rauscher Incorporated).

     We have a history of operating losses. For the year ended December 31,
2003, we reported a loss of $1,244,410, versus a loss of $1,619,010 for the year
ended December 31, 2002. However, for the three-month period ended March 31,
2004, we reported income of $65,497, versus a loss of $481,401 for the same
period in 2003. We believe our improved performance is due primarily to
increased investor confidence and the addition of registered representatives
after the first quarter of 2003. In general, our financial results can be
impacted by a number of factors, including our ability to recruit and retain
registered representatives as well as general market conditions and volatility,
which are often expressions of investor confidence. In periods of waning
investor confidence, such as 2002, our revenues suffer as our clients make fewer
investments. Furthermore, our results during any particular period may be
negatively impacted by the incurrence of costs necessary to support our actual
and projected growth. For example, our results for the three months ended March
31, 2003 were negatively impacted by costs incurred in connection with the
expansion and improvement of our infrastructure which included the hiring of new
employees, including several members of senior management, the leasing of
additional office space in Boca Raton, Florida, and improving our information
technology systems. As we continue to grow, we may continue to have increases in
expenses such as increased personnel and office costs.

                                       10
<PAGE>


     Our business plan is focused primarily on increasing our network of
affiliated registered representatives, which permits the Company to expand its
base of revenue and its network for the retail distribution of securities
without the capital expenditures that would be required to open company-owned
offices and the additional administrative and other costs of hiring registered
representatives as in-house employees. As was the case with the Boca Branch,
however, we will opportunistically evaluate acquisitions, including those that
would result in acquired registered representatives becoming employees of
Summit.

     By their nature, our business activities are highly competitive and are
subject to, among other things, general market conditions, including the
volatility of the trading markets and the attractiveness of various forms of
investment products. Consequently, our revenues and net income are subject to
substantial positive and negative fluctuations due to a variety of factors that
cannot be predicted with great certainty and may result in revenues and net
income (or losses) in any particular period that may not be representative of
full-year results and may vary significantly from year to year and from quarter
to quarter.

     On August 18, 2003, we terminated for cause the employment of Richard
Parker, our then Vice Chairman, President and Chief Operating Officer. In
connection with such termination, we filed an action against Mr. Parker for
breach of contract, breach of fiduciary duty and injunctive relief. The
litigation is in its preliminary stages. Although we believe that we will
prevail in such litigation on the merits, the ultimate outcome cannot be
predicted.

Results of Operations

     The following discussion relates to the results of operations for the three
months ended March 31, 2004 (the "2004 Quarter") compared to the same period in
the prior year (the "2003 Quarter", respectively).


       Comparison of Three Months Ended March 31, 2004 and March 31, 2003

Revenue:

     Commission revenue of $4,789,757 for the 2004 Quarter represents an
increase of $2,975,377, or 164%, over commission revenue of $1,814,380 for the
2003 Quarter. Importantly, commission revenue for the 2004 Quarter reflects the
single highest quarterly revenue recorded by the Company since its inception. We
believe several factors contributed to this growth, including a rise in investor
confidence and the Company's overall strategy of recruiting higher producing
registered representatives. During the Quarter, commission revenues generated by
the Boca Branch accounted for approximately 27% of total commission revenues,
which percentage we expect to continue to decline as we recruit more registered
representatives.

     In any quarter, our mix of business will be impacted by several factors,
including, among other things, investor confidence, as reflected by the
movements of the equities markets, and the attractiveness of non-equity-related
investment products, such as fixed income securities. Additionally, during any
quarter, we may add a significant number of registered representatives who focus
only on the sale of a particular type or types of investment product(s) (e.g.,
insurance, equities, fixed income, etc.).

                                       11
<PAGE>


Expenses:

     Commission and clearing costs increased to $3,857,671 during the 2004
Quarter, which represents an increase of $2,484,697, or 181%, over the
$1,372,974 reported for the 2003 Quarter. In general, commissions and clearing
costs are directly related to commission revenue, and will typically increase
proportionately as commission revenue rises. Commissions and clearing costs, as
a percentage of commission revenues, increased in the 2004 Quarter to 81% from
76% in the 2003 Quarter. This increase is primarily attributable to the growth
of our network of independent registered representatives. Because we pay our
independent registered representatives at a higher rate than we pay the
registered representatives in the Boca Branch, an increase in the percentage of
total commissions generated by the network will generally increase the ratio of
commission expense and clearing costs to commission revenues.

     Employee compensation and benefits increased to $604,128 during the 2004
Quarter, which represents an increase of $44,880, or 8%, over the 2003 Quarter.
This increase was due primarily to a rise in employment related costs related to
insurance, taxes and other employment-related benefits. This increase was
partially offset, however, by a decrease in the expenses associated with issuing
common stock equivalents to our employees. For the 2004 Quarter, a total of
$12,447 was expensed, all of which related to the amortization of unearned stock
compensation. For the 2003 Quarter, we expensed a total of $83,587, of which
$38,587 related to the amortization of unearned stock compensation.

     Occupancy and equipment cost decreased to $111,489 during the 2004 Quarter,
which represents a decline of $13,264, or 11%, from $124,753 reported for the
2003 Quarter. This decrease is largely due to the Company's termination of the
lease and other occupancy and equipment costs for its office space in
Indialantic, Florida on August 31, 2003. Monthly lease payments on the
Indialantic property were approximately $8,800.

     Professional fees decreased by $11,421, or 9%, from $125,814 during the
2003 Quarter to $114,393 during the 2004 Quarter. During the 2004 Quarter, an
increase in legal fees and registration fees was offset by a decrease in
accounting and consulting fees. Additionally, our results for the 2004 Quarter
include $17,736 attributable to the amortization of unearned stock compensation
related to the issuance of common stock equivalents to non-employees. This
compares with amortization of unearned stock compensation of $22,625 recorded
for the 2003 Quarter.

     Communications costs increased by $13,649, or 17%, to $95,556 in the 2004
Quarter from $81,907 in the 2003 Quarter. The increase in these costs was due
primarily to increased technology utilization by the firm's employees, as well
as in certain technology costs charged by our clearing firms.

     Other operating expenses increased by $10,239, or 9%, to $118,702 during
the 2004 Quarter versus $108,463 for the 2003 Quarter. Other operating expenses
typically include the general and administrative costs incurred by the Company,
to the extent such costs are not included elsewhere. Examples of other operating
expenses include insurance expense, office supplies and printing, postage and
related expenses, and interest expense. For the 2004 Quarter, other operating
expenses increased over amounts reported in the 2003 Quarter primarily as a
result of a rise in, among other things, certain costs incurred in connection
with being a public company, such as EDGAR filing fees and other financial
printing costs, as well as costs incurred to further enhance employee and
registered representative retention.

     Although the Company reported net income for the period ended March 31,
2004, no provision for income taxes has been recorded due to the use of the
Company's net operating loss carryforward.

     Net Income / Loss:

     For the 2004 Quarter, we generated net income of $65,497 or $.00 per basic
and diluted share, as compared to the net loss reported for the 2003 Quarter of
$481,401 or ($.02) per basic and diluted share. Our improved performance overall
is mainly attributable to an increase in investor confidence during the 2004
Quarter, as well as the addition of several higher producing registered
representatives. However, the increase in revenue was partially offset by
increased commission expense and other operating costs related to the expansion
of our network of affiliated registered representatives, as described above.

                                       12
<PAGE>


Liquidity and Capital Resources

     Net cash used in operating activities totaled ($98,201) during the 2004
Quarter, compared to net cash used of ($547,128) for the 2003 Quarter. The
decrease in cash used by operating activities was due largely to the significant
increase in our revenues, and the resulting positive impact on our earnings.
More specifically, during the 2004 Quarter, we added an additional $2.9 million
of commission revenue, on which we paid commissions and clearing costs of
approximately 81%, or $2.5 million, with the balance of approximately $.4
million helping to offset our operating costs. Additionally, our earnings were
impacted by charges for several non-cash items, such as stock based
compensation, depreciation and amortization and imputed interest. During the
2004 Quarter, such charges amounted to $96,512, compared to $171,604 for the
2003 Quarter.

     Cash and cash equivalents decreased during the 2004 Quarter by $216,998 to
$2,894,119. This decrease was largely due to the net cash used in operating
activities, as well as the cash used to pay down our note with Wachovia
Securities in connection with our purchase of the Boca Branch.

     During the 2004 Quarter, we purchased $1,513 of property and equipment,
which amount exceeded by $923 the $590 used during the 2003 Quarter. The Company
does not project material capital expenditures over the next twelve months.

     Financing activities used cash of $117,284 during the 2004 Quarter, most of
which was attributable to payments on the note to Wachovia Securities.

     In the normal course of business, the Company evaluates acquisitions of
businesses that compliment its business. In connection with any acquisitions,
the Company may issue additional securities, which could result in dilution for
existing shareholders.

     Inflation. Inflation has not been a major factor in the Company's business
since inception. There can be no assurances that this will continue if and when
the Company completes an acquisition or merger.

Item 3. Controls and Procedures

     The Company's Chief Executive Officer and the Company's Chief Financial
Officer evaluated the Company's disclosure controls and procedures as of the end
of the period covered by this report. Based upon this evaluation, the Company's
Chief Executive Officer and the Company's Chief Financial Officer concluded that
the Company's disclosure controls and procedures are effective in ensuring that
material information required to be disclosed is included in the reports that it
files with the Securities and Exchange Commission.

     During the quarterly period covered by this report, there were no changes
in our internal controls over financial reporting that materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.

                                       13
<PAGE>


                           PART 11. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(a)      Exhibits
<TABLE>
<CAPTION>
<S>                  <C>
Number               Name
----------------     --------------------------------------------------------------------------------------------------
2.1                  Merger  Agreement  by and among the  Registrant,  Summit  Brokerage  Services,  Inc.  and  Summit
                     Transitory Sub, Inc. dated July 17, 2003 (1)
3.1                  Amended and Restated Articles of Incorporation (2)
3.2                  Bylaws (2)
10.1                 2000 Incentive Compensation Plan, as amended (8)
10.2                 Stock Purchase  Agreement by and among the Summit Brokerage  Services,  Inc.,  Richard Parker and
                     Marshall T. Leeds, dated March 22, 2002 (3)
10.3                 Stock Option Agreement between Summit Brokerage Services,  Inc. and Marshall T. Leeds dated March
                     22, 2002 (3)
10.4                 Amended and Restated Employment  Agreement between Summit Brokerage  Services,  Inc. and Marshall
                     T. Leeds dated May 22, 2002 (4)
10.5                 Shareholders'  Voting  Agreement and Irrevocable  Proxy by and among Summit  Brokerage  Services,
                     Inc., Marshall T. Leeds, Richard Parker and Joan Parker, dated May 22, 2002.(4)
10.6.1               Commercial Lease between Summit Brokerage  Services,  Inc. and First America Living Trust,  dated
                     May 22, 2002 (4)
10.6.2               Employment  Agreement between Summit Brokerage Services,  Inc. and Richard Parker,  dated May 22,
                     2004 (4)
10.6.3               Stock Option Agreement between Summit Brokerage Services,  Inc. and Richard Parker, dated May 22,
                     2004 (3)
10.6.4               Stock Option Agreement between Summit Brokerage Services,  Inc. and Richard Parker, dated May 22,
                     2004 (3)
10.7                 Form of  Registration  Rights  Agreement  between  Summit  Brokerage  Services,  Inc. and certain
                     investors (5)
10.8                 Form of Warrants dated effective March 19, 2003 (6)
10.9                 Warrant  Agreement between Summit Brokerage  Services,  Inc. and Steven C. Jacobs dated effective
                     March 19, 2003 (8)
10.10                Warrant  Agreement between Summit Brokerage  Services,  Inc. and Steven C. Jacobs dated effective
                     April 11, 2003 (8)
10.11                Stock Purchase  Agreement  between Summit Brokerage  Services,  Inc. and Antares Capital Fund III
                     Limited Partnership, dated April 11, 2003 (7)
10.12                Supplemental  Letter between Summit Brokerage  Services,  Inc.,  Antares Capital Fund III Limited
                     Partnership, and Marshall T. Leeds, dated April 11, 2003 (7)
10.13                Registration  Rights Agreement between Summit Brokerage  Services,  Inc. and Antares Capital Fund
                     III Limited Partnership, dated April 11, 2003 (7)
10.14                Co-Sale and Voting  Rights  Agreement  between  Marshall T. Leeds and  Antares  Capital  Fund III
                     Limited Partnership, dated April 11, 2003 (7)
31.1                 Certification  of Chief Executive  Officer pursuant to Section 302 of the  Sarbanes-Oxley  Act of
                     2002.*
31.2                 Certification  of Chief Financial  Officer pursuant to Section 302 of the  Sarbanes-Oxley  Act of
                     2002.*
99.1                 Certification  of Chief Executive  Officer pursuant to Section 906 of the  Sarbanes-Oxley  Act of
                     2002*
99.2                 Certification  of Chief Financial  Officer pursuant to Section 906 of the  Sarbanes-Oxley  Act of
                     2002*

__________________
* Filed herewith

(1)  Incorporated by reference to the Registrant's Registration Statement on
     Form S-4, filed on September 15, 2004, File No. 333-108818
</TABLE>

                                       14
<PAGE>


(2)  Incorporated by reference to the Registrant's Registration Statement on
     Form S-4 (Amendment No. 2), filed on February 12, 2004, File No.
     333-108818.

(3)  Incorporated by reference to the Form 10-QSB for the fiscal quarter ended
     March 31, 2002 of Summit Brokerage Services, Inc., filed May 24, 2002, file
     no. 0-29337.

(4)  Incorporated by reference to the Form 10-QSB for the fiscal quarter ended
     June 30, 2002 of Summit Brokerage Services, Inc., filed August 19, 2002,
     file no. 0-29337.

(5)  Incorporated by reference to the Form 10-KSB for the fiscal year ended
     December 31, 2002, of Summit Brokerage Services, Inc., filed March 31,
     2003, file no. 0-29337.

(6)  Incorporated by reference to the Form 10-QSB for the fiscal quarter ended
     September 30, 2003, of Summit Brokerage Services, Inc., filed November 14,
     2003, file no. 0-29337.

(7)  Incorporated by reference to the Form 8-K filed on April. 21, 2003 by
     Summit Brokerage Services, Inc., file no. 0-29337.

(8)  Incorporated by reference to the Registrant's Form 10-KSB for the fiscal
     year ended December 31, 2003, filed March 30, 2004, file no. 0-29337

(b)      Reports on Form 8-K

         None


                            [Signature Page Follows]

                                       15
<PAGE>


                      SUMMIT FINANCIAL SERVICES GROUP, INC.

                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                            Summit Financial Services Group, Inc.
                            (Registrant)


Date: May 14, 2004          /s/ Marshall T. Leeds
                            ----------------------------------------------------
                            Marshall T. Leeds, Chairman of the Board & Chief
                            Executive Officer
                            (Principal Executive Officer)





Date: May 14, 2004          /s/ Steven C. Jacobs
                            ----------------------------------------------------
                            Steven C. Jacobs, Executive Vice President and Chief
                            Financial Officer
                            (Principal Accounting Officer)

                                       16
<PAGE>


                     EXHIBIT INDEX
                     -------------


    EXHIBIT
    NUMBER           DESCRIPTION
   ---------         -----------------------------------------------------------

     31.1            Certification of Chief Executive Officer pursuant to
                     Section 302 of the Sarbanes-Oxley Act of 2002.

     31.2            Certification of Chief Financial Officer pursuant to
                     Section 302 of the Sarbanes-Oxley Act of 2002.

     99.1            Certification of Chief Executive Officer pursuant to
                     Section 906 of The Sarbanes-Oxley Act of 2002.

     99.2            Certification Chief Financial Officer pursuant to Section
                     906 of The Sarbanes-Oxley Act of 2002.


                                       17