SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q

[ X ]  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended                   March 31, 2000
                                ------------------------------------------------

                                       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 number: 1-13654
                                               ---------

                       LIBERTY FINANCIAL COMPANIES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


        Massachusetts                                  04-3260640
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


600 Atlantic Avenue, Boston, Massachusetts                       02210-2214
--------------------------------------------------------------------------------
(Address of principal executive offices)                         (Zip Code)


                                 (617) 722-6000
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

  Indicate  by  check  mark  whether  the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  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

  There  were  47,836,851  shares of the  registrant's  Common  Stock,  $.01 par
value,  and 323,912 shares of the  registrant's  Series A Convertible  Preferred
Stock, $.01 par value, outstanding as of April 30, 2000.

Exhibit Index - Page 22                                             Page 1 of 24

<PAGE>

                       LIBERTY FINANCIAL COMPANIES, INC.
         QUARTERLY REPORT ON FORM 10-Q FOR PERIOD ENDED MARCH 31, 2000


                                TABLE OF CONTENTS

Part I.      FINANCIAL INFORMATION                                      Page
-------                                                                 ----


Item 1.      Financial Statements

             Consolidated Balance Sheets as of March 31, 2000 and
               December 31, 1999

             Consolidated Income Statements for the Three Months
               Ended March 31, 2000 and 1999

             Consolidated Statements of Cash Flows for the Three
               Months Ended March 31, 2000 and 1999

             Consolidated Statement of Stockholders' Equity for the
               Three Months Ended March 31, 2000

             Notes to Consolidated Financial Statements

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

Item 3.      Quantitative and Qualitative Disclosures About Market
               Risk

Part II.     OTHER INFORMATION
--------

Item 6.      Exhibits and Reports on Form 8-K


Signatures


Exhibit Index

<PAGE>


                        LIBERTY FINANCIAL COMPANIES, INC.
                          CONSOLIDATED BALANCE SHEETS
                                  (in millions)


                                                      March 31       December 31
                                                        2000             1999
                                                   ------------     ------------
                                                     Unaudited

                                      ASSETS

Assets:
 Investments                                         $12,168.2        $12,195.1
 Cash and cash equivalents                             1,603.5          1,232.6
 Accrued investment income                               164.1            162.0
 Deferred policy acquisition costs                       709.2            739.2
 Deferred distribution costs                             157.0            153.7
 Intangible assets                                       277.8            282.0
 Other assets                                            483.2            244.8
 Separate account assets                               3,626.6          3,363.1
                                                   ------------     ------------
                                                     $19,189.6        $18,372.5
                                                   ============     ============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
 Policyholder balances                               $12,071.4        $12,109.6
 Notes payable                                           562.0            552.0
 Payable for investments purchased and loaned          1,279.9            754.9
 Other liabilities                                       460.9            453.1
 Separate account liabilities                          3,588.5          3,301.0
                                                   ------------     ------------
    Total liabilities                                 17,962.7         17,170.6
                                                   ------------     ------------


Series A redeemable convertible preferred
 stock, par value $.01; authorized,
 issued and outstanding 324,759 shares in
 2000 and 1999                                            16.2             16.0
                                                   ------------     ------------

Stockholders' Equity:
 Common stock, par value $.01; authorized
  100,000,000 shares, issued and outstanding
  47,824,052 shares in 2000 and 47,462,995
  shares in 1999                                           0.5              0.5
 Additional paid-in capital                              926.6            923.0
 Retained earnings                                       449.7            425.2
 Accumulated other comprehensive loss                   (162.6)          (158.1)
 Unearned compensation                                    (3.5)            (4.7)
                                                   ------------     ------------
  Total stockholders' equity                           1,210.7          1,185.9
                                                   ------------     ------------

                                                     $19,189.6        $18,372.5
                                                   ============     ============

          See accompanying notes to consolidated financial statements.

<PAGE>

                        LIBERTY FINANCIAL COMPANIES, INC.
                         CONSOLIDATED INCOME STATEMENTS
                      (in millions, except per share data)

                                    Unaudited

                                                        Three Months Ended
                                                             March 31
                                                   -----------------------------
                                                        2000             1999
                                                   ------------     ------------

 Investment income                                      $205.9           $206.2
 Interest credited to policyholders                     (127.3)          (134.8)
                                                   ------------     ------------
 Investment spread                                        78.6             71.4
                                                   ------------     ------------
 Net realized investment losses                           (3.9)            (3.1)
                                                   ------------     ------------
 Fee income:
     Investment advisory and
      administrative fees                                 71.9             66.2
     Distribution and service fees                        15.4             14.7
     Transfer agency fees                                 12.7             12.9
     Surrender charges and net commissions                10.7              8.4
     Separate account fees                                10.7              6.6
                                                   ------------     ------------
 Total fee income                                        121.4            108.8
                                                   ------------     ------------
 Expenses:
     Operating expenses                                 (102.3)           (88.7)
     Amortization of deferred policy
      acquisition costs                                  (27.1)           (24.2)
     Amortization of deferred
      distribution costs                                 (10.2)            (9.5)
     Amortization of intangible assets                    (5.1)            (5.0)
     Interest expense, net                                (4.0)            (5.7)
                                                   ------------     ------------
 Total expenses                                         (148.7)          (133.1)
                                                   ------------     ------------

 Pre-tax income                                           47.4             44.0
 Income tax expense                                      (17.7)           (16.6)
                                                   ------------     ------------
 Net income                                              $29.7            $27.4
                                                   ============     ============

 Net income per share - basic                            $0.62            $0.59
                                                   ============     ============

 Net income per share - assuming dilution                $0.62            $0.58
                                                   ============     ============


          See accompanying notes to consolidated financial statements.

<PAGE>

                        LIBERTY FINANCIAL COMPANIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (in millions)

                                    Unaudited

                                                        Three Months Ended
                                                             March 31
                                                     ---------------------------
                                                        2000             1999
                                                     ----------       ----------
Cash flows from operating activities:
Net income                                               $29.7            $27.4
Adjustments to reconcile net income to
 net cash provided by operating activities:
  Depreciation and amortization                           20.3             20.4
  Interest credited to policyholders                     127.3            134.8
  Net realized investment losses                           3.9              3.1
  Net amortization on investments                         22.6             21.3
  Change in deferred policy acquisition costs             (9.0)            (2.1)
  Net change in other assets and liabilities               7.9            (22.9)
                                                     ----------       ----------
      Net cash provided by operating activities          202.7            182.0
                                                     ----------       ----------

Cash flows from investing activities:
  Investments purchased available for sale              (628.9)        (1,519.4)
  Investments sold available for sale                    663.6          1,190.8
  Investments matured available for sale                  36.5             80.8
  Change in policy loans, net                             (7.9)            (4.2)
  Change in mortgage loans, net                            0.7             40.9
  Other                                                   (2.9)            (5.8)
                                                     ----------       ----------
      Net cash provided by (used in) investing
       activities                                         61.1           (216.9)
                                                     ----------       ----------
Cash flows from financing activities:
  Withdrawals from policyholder accounts                (516.4)          (456.3)
  Deposits to policyholder accounts                      310.9            154.9
  Securities lending                                     302.9            599.5
  Change in notes payable                                 10.0             20.5
  Exercise of stock options                                1.3              1.5
  Dividends paid                                          (1.6)            (1.6)
                                                     ----------       ----------
      Net cash provided by financing activities          107.1            318.5
                                                     ----------       ----------
  Increase in cash and cash equivalents                  370.9            283.6
  Cash and cash equivalents at beginning of period     1,232.6            984.1
                                                     ----------       ----------
  Cash and cash equivalents at end of period          $1,603.5         $1,267.7
                                                     ==========       ==========


                See accompanying notes to consolidated financial statements.

<PAGE>

                       LIBERTY FINANCIAL COMPANIES, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                 (in millions)

                                    Unaudited


                                            Accumulated
                          Addit'l              Other                  Total
                  Common  Paid-In  Retained  Comprehen.  Unearned  Stockholders'
                  Stock   Capital  Earnings     Loss      Compen.     Equity
                  ------  -------  --------  ----------  --------  -------------
Balance,
 December 31,
 1999              $0.5   $923.0    $425.2     $(158.1)    $(4.7)      $1,185.9
Effect of
 stock-based
 compensation
 plans                       0.2                             1.2            1.4
Accretion to face
 value of
 preferred stock                      (0.2)                                (0.2)
Common stock
 dividends                   3.4      (4.8)                                (1.4)
Preferred stock
 dividends                            (0.2)                                (0.2)
Net income                            29.7                                 29.7
Other comprehensive
 loss, net of tax                                 (4.5)                    (4.5)
                  ------  -------  --------  ----------  --------  -------------
Balance,
 March 31, 2000    $0.5   $926.6    $449.7     $(162.6)    $(3.5)      $1,210.7
                  ======  =======  ========  ==========  ========  =============


                See accompanying notes to consolidated financial statements.

<PAGE>


                        LIBERTY FINANCIAL COMPANIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    Unaudited

1.    General

       The accompanying  unaudited consolidated financial statements include all
   adjustments,   consisting  of  normal  recurring  accruals,  that  management
   considers  necessary  for a  fair  presentation  of the  Company's  financial
   position  and  results  of  operations  as of and  for  the  interim  periods
   presented.  Certain  footnote  disclosures  normally  included  in  financial
   statements   prepared  in  accordance  with  generally  accepted   accounting
   principles  have  been  condensed  or  omitted  pursuant  to  the  rules  and
   regulations  of the  Securities  and Exchange  Commission.  Therefore,  these
   consolidated  financial  statements  should be read in  conjunction  with the
   audited  consolidated  financial  statements  contained in the Company's Form
   10-K for the year ended  December 31, 1999. The results of operations for the
   three  months  ended March 31,  2000 are not  necessarily  indicative  of the
   results to be expected for the full year. Certain previously reported amounts
   have been reclassified to conform with the current period presentation.

2.    Segment Information

      The  Company is an asset  accumulation  and  management  company  with two
   reportable segments:  retirement-oriented  insurance (principally  annuities)
   and asset management.  The annuity insurance business is conducted at Keyport
   Life Insurance  Company  ("Keyport").  Keyport  generates  investment  spread
   income from the investment  portfolio  which supports  policyholder  balances
   associated with its fixed and indexed  annuity  business and its closed block
   of single premium whole life insurance.  The annuity insurance  business also
   derives fee income from the  administration  of fixed,  indexed and  variable
   annuity  contracts.  The asset  management  business is  conducted at Liberty
   Funds  Group,  an  investment   advisor  (through  its  subsidiary   Colonial
   Management Associates), distributor and transfer agent to mutual funds, Stein
   Roe & Farnham Incorporated, a diversified investment advisor, Newport Pacific
   Management,  Inc.,  an investment  advisor to mutual funds and  institutional
   accounts  specializing in Asian equity markets,  Crabbe Huson Group, Inc., an
   investment  advisor  to mutual  funds and  institutional  accounts,  Progress
   Investment   Management  Company,  an  investment  advisor  to  institutional
   accounts,  and Liberty Asset  Management  Company,  an investment  advisor to
   mutual  funds.  The  asset  management   business  derives  fee  income  from
   investment products and services.

      The Company's  reportable  segments offer different  products and are each
   managed  separately.  Information  by  reportable  segment is shown below (in
   millions):

                                                        Three Months Ended
                                                             March 31
                                                     ---------------------------
                                                        2000             1999
                                                     ----------       ----------
Statement of Operations Data
Revenues (excluding net realized investment gains
  and losses):
  Annuity:
   Unaffiliated                                         $226.3           $219.8
   Intersegment                                           (3.8)            (2.9)
                                                     ----------       ----------
   Total annuity                                         222.5            216.9
                                                     ----------       ----------
  Asset management:
   Unaffiliated                                          101.0             95.2
   Intersegment                                            3.8              2.9
                                                     ----------       ----------
   Total asset management                                104.8             98.1
                                                     ----------       ----------
   Total revenues (excluding net realized
    investment gains and losses)                        $327.3           $315.0
                                                     ==========       ==========
<PAGE>

                                                        Three Months Ended
                                                             March 31
                                                     ---------------------------
                                                        2000             1999
                                                     ----------       ----------
 Income before income taxes:
  Annuity:
   Income before amortization of intangible assets       $50.2            $42.2
   Amortization of intangible assets                      (0.3)            (0.3)
                                                     ----------       ----------
    Subtotal annuity                                      49.9             41.9
                                                     ----------       ----------
  Asset management:
   Income before amortization of intangible assets        17.0             22.0
   Amortization of intangible assets                      (4.8)            (4.6)
                                                     ----------       ----------
    Subtotal asset management                             12.2             17.4
                                                     ----------       ----------
  Other:
   Loss before amortization of intangible assets         (10.8)           (12.1)
   Amortization of intangible assets                       0.0             (0.1)
                                                     ----------       ----------
    Subtotal other                                       (10.8)           (12.2)
                                                     ----------       ----------
  Income before net realized investment
   losses and income taxes                                51.3             47.1
  Net realized investment losses                          (3.9)            (3.1)
                                                     ----------       ----------
   Total income before income taxes                      $47.4            $44.0
                                                     ==========       ==========

3.    Investments

      Investments were comprised of the following (in millions):


                                                      March 31       December 31
                                                        2000             1999
                                                     ----------       ----------
           Fixed maturities                          $10,567.2        $10,516.1
           Equity securities                              35.5             37.9
           Policy loans                                  607.4            599.5
           Other invested assets                         958.1          1,041.6
                                                     ----------       ----------
             Total                                   $12,168.2        $12,195.1
                                                     ==========       ==========

      The  Company's  general  investment  policy  is  to  hold  fixed  maturity
   securities for long-term  investment and,  accordingly,  the Company does not
   have a trading  portfolio.  To provide for maximum portfolio  flexibility and
   appropriate  tax planning,  the Company  classifies  its entire  portfolio of
   fixed  maturity  securities as "available for sale" and  accordingly  carries
   such investments at fair value.


<PAGE>

4.    Net Income Per Share

      The  following  table  sets  forth  the  computation  of  net  income  per
   share-basic and net income per share-assuming dilution:

                                                        Three Months Ended
                                                             March 31
                                                   -----------------------------
                                                        2000             1999
                                                   ------------     ------------
Numerator (in millions)
 Net income                                              $29.7            $27.4
 Less: preferred stock dividends                          (0.2)            (0.2)
                                                   ------------     ------------
 Numerator for net income per share - basic
  - income available to common stockholders               29.5             27.2
 Plus: income impact of assumed conversions
   Preferred stock dividends                               0.2              0.2
                                                   ------------     ------------
   Numerator for net income per share - assuming
    dilution - income available to common
    stockholders after assumed conversions               $29.7            $27.4
Denominator
   Denominator for net income per share
    - basic - weighted-average shares               47,363,267       46,335,719
Effect of dilutive securities:
  Employee stock options                               393,549          689,044
  Convertible preferred stock                          514,370          514,370
                                                   ------------     ------------
Dilutive potential common shares                       907,919        1,203,414
                                                   ------------     ------------
   Denominator for net income per share
    - assuming dilution                             48,271,186       47,539,133
                                                   ============     ============
Net income per share - basic                             $0.62            $0.59
                                                   ============     ============
Net income per share - assuming dilution                 $0.62            $0.58
                                                   ============     ============

5.     Comprehensive Income

       Comprehensive income was comprised of the following (in millions):

                                                        Three Months Ended
                                                             March 31
                                                   -----------------------------
                                                        2000             1999
                                                   ------------     ------------
        Net income                                       $29.7            $27.4
        Other comprehensive loss, net of tax:
         Net unrealized investment losses                 (4.5)            (8.5)
                                                   ------------     ------------
        Comprehensive income                             $25.2            $18.9
                                                   ============     ============


<PAGE>

6.    Recent Accounting Pronouncement

      In June 1998, the Financial  Accounting  Standards  Board ("FASB")  issued
   Statement of Financial  Accounting Standards ("SFAS") No. 133 "Accounting for
   Derivative  Instruments and Hedging Activities." This statement  standardizes
   the  accounting  for derivative  instruments  and the  derivative  portion of
   certain other contracts that have similar  characteristics  by requiring that
   an entity  recognize  those  instruments  at fair value.  This statement also
   requires a new method of accounting for hedging transactions,  prescribes the
   type of items and  transactions  that may be hedged,  and specifies  detailed
   criteria to be met to qualify for hedge  accounting.  In June 1999,  the FASB
   issued  SFAS No. 137  "Accounting  for  Derivative  Instruments  and  Hedging
   Activities - Deferral of the Effective  Date of FASB Statement No. 133." SFAS
   No.  137  defers  the  effective  date of SFAS No.  133  until  fiscal  years
   beginning after June 15, 2000. Earlier adoption is permitted.  Upon adoption,
   the Company  will be required to record a  cumulative  effect  adjustment  to
   reflect this accounting  change.  At this time, the Company has not completed
   its analysis and evaluation of the requirements and impact of this statement.

<PAGE>

Item  2.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Results of Operations

   Net Income was $29.7  million or $0.62 per share for the quarter  ended March
31,  2000  compared to $27.4  million or $0.58 per share for the  quarter  ended
March 31, 1999. The increase  resulted largely from higher investment spread and
fee income. In addition,  interest expense, net decreased.  Partially offsetting
these items were higher operating expenses,  amortization expense and income tax
expense.

   Pre-tax  Income  was $47.4  million  for the  quarter  ended  March 31,  2000
compared to $44.0  million for the quarter  ended March 31,  1999.  The increase
resulted  largely  from higher  investment  spread and fee income.  In addition,
interest expense,  net decreased.  Partially  offsetting these items were higher
operating expenses and amortization expense.

   Investment  Spread is the  amount by which  investment  income  earned on the
Company's  investments  exceeds  interest  credited  on  policyholder  balances.
Investment  spread  was $78.6  million  for the  quarter  ended  March 31,  2000
compared to $71.4  million for the quarter  ended March 31, 1999.  The amount by
which the average yield on  investments  exceeds the average  interest  credited
rate  on  policyholder  balances  is  the  investment  spread  percentage.   The
investment  spread  percentage  for the  quarter  ended March 31, 2000 was 2.26%
compared to 1.99% for the  quarter  ended March 31,  1999.  The  increase in the
investment  spread  percentage  resulted  from an  increased  yield  on  average
invested assets and from decreased crediting rates to policyholders.

   Investment  income was $205.9  million for the  quarter  ended March 31, 2000
compared to $206.2 million for the quarter ended March 31, 1999. The decrease of
$0.3 million in 2000 compared to 1999 includes a $6.1 million decrease resulting
from a lower level of average  invested assets and a $5.8 million  increase as a
result of a higher average  investment yield. The 2000 investment income was net
of $21.1 million of S&P 500 Index call option  amortization  expense  related to
the Company's  equity-indexed  annuities  compared to $19.4 million in 1999. The
average investment yield was 6.49% for the quarter ended March 31, 2000 compared
to 6.31% for the quarter ended March 31, 1999.

   Interest  credited to  policyholders  totaled  $127.3 million for the quarter
ended March 31, 2000 compared to $134.8  million for the quarter ended March 31,
1999. The decrease of $7.5 million in 2000 compared to 1999 primarily relates to
a $4.4 million  decrease  resulting  from a lower level of average  policyholder
balances,  as well as a $3.1  million  decrease  as a result of a lower  average
interest credited rate.  Policyholder balances averaged $12.0 billion (including
$9.7 billion of fixed products, consisting of fixed annuities and a closed block
of single  premium  whole life  insurance,  and $2.3  billion of  equity-indexed
annuities)  for the  quarter  ended March 31,  2000  compared  to $12.5  billion
(including  $10.4 billion of fixed  products and $2.1 billion of  equity-indexed
annuities) for the quarter ended March 31, 1999. The average  interest  credited
rate was 4.23% (5.01% on fixed products and 0.85% on  equity-indexed  annuities)
for the quarter ended March 31, 2000 compared to 4.32% (5.02% on fixed  products
and 0.85% on  equity-indexed  annuities)  for the quarter  ended March 31, 1999.
Keyport's  equity-indexed  annuities  credit  interest to the  policyholder at a
"participation  rate" equal to a portion (ranging for existing policies from 25%
to 100%) of the change in value of the S&P 500 Index.  Keyport's  equity-indexed
annuities  also provide a full  guarantee  of  principal  if held to term,  plus
interest at 0.85%  annually.  For each of the periods  presented,  the  interest
credited to equity-indexed  policyholders  related to the participation rate was
offset  by  investment  income  recognized  on the S&P 500  Index  call  options
resulting in a 0.85% net credited rate.

   Average investments in the Company's general account (computed without giving
effect to Statement  of Financial  Accounting  Standards  No. 115),  including a
portion of the Company's cash and cash  equivalents,  were $12.7 billion for the
quarter  ended March 31, 2000  compared to $13.1  billion for the quarter  ended
March 31, 1999. This decrease was primarily due to net redemptions and transfers
to separate accounts, partially offset by the reinvestment of portfolio earnings
for the twelve months ended March 31, 2000.

   Net Realized  Investment Losses were $3.9 million for the quarter ended March
31, 2000 compared to $3.1 million for the quarter ended March 31, 1999.  The net
realized  investment  losses in 2000 included losses of $3.3 million for certain
fixed maturity investments where the decline in value was determined to be other
than  temporary.  There were no such losses  recorded  during the quarter  ended
March 31, 1999.

   Investment  Advisory and Administrative Fees are based on the market value of
assets managed for mutual funds,  private capital  management and  institutional
investors.  Investment  advisory and administrative  fees were $71.9 million for
the quarter ended March 31, 2000 compared to $66.2 million for the quarter ended
March 31, 1999. The increase  during 2000 compared to 1999 primarily  reflects a
higher level of average fee-based assets under management.

   Average  fee-based assets under management were $51.7 billion for the quarter
ended March 31, 2000  compared to $47.4  billion for the quarter ended March 31,
1999.   The  increase   during  2000  compared  to  1999  resulted  from  market
appreciation  and  net  sales  for the  twelve  months  ended  March  31,  2000.
Investment  advisory  and  administrative  fees were 0.56% of average  fee-based
assets under management for the quarters ended March 31, 2000 and 1999.

   The amount of fee-based assets under management are affected by product sales
and  redemptions  and  changes  in  the  market  values  of  such  assets  under
management. Fee-based assets under management and changes in such assets are set
forth in the tables below (in billions).


Fee-Based Assets Under Management
                                                       As of March 31
                                                    ---------------------
                                                      2000        1999
                                                    ---------   ---------
  Mutual Funds:
    Intermediary-distributed                           $18.0       $17.7
    Direct-marketed                                      6.9         6.6
    Closed-end                                           2.9         2.4
    Variable annuity                                     2.1         1.6
                                                    ---------   ---------
                                                        29.9        28.3
  Private Capital Management                             9.6         8.1
  Institutional                                         13.6        11.0
                                                    ---------   ---------
    Total Fee-Based Assets Under Management*           $53.1       $47.4
                                                    =========   =========
--------------
*  As of March 31, 2000 and 1999,  Keyport's  insurance  assets of $14.0 billion
   and $13.4 billion, respectively, bring total assets under management to $67.1
   billion and $60.8 billion, respectively.


 Changes in Fee-Based Assets Under Management
                                                     Three Months Ended
                                                          March 31
                                                    ---------------------
                                                      2000        1999
                                                    ---------   ---------
 Fee-based assets under management - beginning        $51.4       $47.9
 Sales and reinvestments:
      Mutual funds                                      1.6         1.8
      Private Capital Management                        0.4         0.2
      Institutional                                     0.9         0.6
                                                    ---------   ---------
                                                        2.9         2.6
 Redemptions and withdrawals:
      Mutual funds                                     (2.2)       (1.9)
      Private Capital Management                       (0.2)       (0.1)
      Institutional                                    (0.4)       (0.9)
                                                    ---------   ---------
                                                       (2.8)       (2.9)
 Market appreciation (depreciation)                     1.6        (0.2)
                                                    ---------   ---------
 Fee-based assets under management - ending           $53.1       $47.4
                                                    =========   =========

   Distribution  and Service Fees are based on the market value of the Company's
intermediary-distributed  mutual funds. Distribution fees of 0.75% are generally
earned  on the  average  assets  attributable  to such  funds  sold  with  12b-1
distribution  fees and  contingent  deferred  sales  charges and service fees of
0.25% (net of amounts passed on to selling  brokers) are generally earned on the
total of such average  mutual fund assets.  These fees totaled $15.4 million for
the quarter ended March 31, 2000 compared to $14.7 million for the quarter ended
March 31, 1999. As a percentage of intermediary-distributed  average mutual fund
assets, distribution and service fees were approximately 0.35% and 0.34% for the
quarters ended March 31, 2000 and 1999, respectively.

    Transfer  Agency Fees are based on the market value of assets managed in the
Company's intermediary-distributed,  direct-marketed and variable annuity mutual
funds.  Such fees were $12.7 million on average  assets of $26.8 billion for the
quarter  ended  March 31,  2000 and $12.9  million  on  average  assets of $26.0
billion for the quarter  ended March 31, 1999.  As a percentage of total average
assets under management, transfer agency fees were approximately 0.19% and 0.20%
for the quarters ended March 31, 2000 and 1999, respectively.

   Surrender  Charges and Net  Commissions  are revenues earned on: a) the early
withdrawal   of  annuity   policyholder   balances   and   redemptions   of  the
intermediary-distributed  mutual  funds which were sold with 12b-1  distribution
fees and contingent deferred sales charges; b) the distribution of the Company's
intermediary-distributed  mutual funds (net of the  substantial  portion of such
commissions  that is  passed  on to the  selling  brokers);  and c) the sales of
non-proprietary  products in the Company's  bank  marketing  businesses  (net of
commissions  that are paid to the  Company's  client banks and  brokers).  Total
surrender  charges and net commissions  were $10.7 million for the quarter ended
March 31, 2000 compared to $8.4 million for the quarter ended March 31, 1999.

   Surrender  charges on fixed and variable  annuity  withdrawals  generally are
assessed at declining rates applied to policyholder withdrawals during the first
five to seven years of the contract; contingent deferred sales charges on mutual
fund redemptions are assessed at declining rates on amounts  redeemed  generally
during the first six years.  Such  charges  totaled $7.4 million for the quarter
ended March 31, 2000 and $5.5  million  for the  quarter  ended March 31,  1999.
Total  annuity  withdrawals  represented  14.9% and  12.8% of the total  average
annuity  policyholder and separate account balances for the quarters ended March
31,  2000 and 1999,  respectively.  Net  commissions  were $3.3  million for the
quarter  ended March 31, 2000 and $2.9  million for the quarter  ended March 31,
1999.

   Separate  Account Fees are primarily  mortality and expense charges earned on
variable  annuity and variable  life  policyholder  balances.  In addition,  for
certain  separate  institutional  accounts,  the difference  between  investment
income and  interest  credited  on these  institutional  accounts is included in
separate  account  fees.  These fees,  which are  primarily  based on the market
values of the assets in separate accounts  supporting the contracts,  were $10.7
million for the quarter  ended March 31, 2000  compared to $6.6  million for the
quarter ended March 31, 1999. Such fees  represented  1.27% and 1.28% of average
variable annuity,  variable life and institutional separate account balances for
the quarters ended March 31, 2000 and 1999, respectively.

   Operating Expenses primarily  represent  compensation,  marketing,  and other
general and administrative  expenses. These expenses were $102.3 million for the
quarter  ended March 31, 2000  compared to $88.7  million for the quarter  ended
March 31, 1999. The increase during 2000 compared to 1999 was primarily  related
to the  expansion of  investment  management  capabilities,  mutual fund product
lines,  distribution  and electronic  commerce  activities.  Operating  expenses
expressed as a percent of average total assets under  management  were 0.63% for
the quarter  ended March 31, 2000  compared to 0.59% for the quarter ended March
31, 1999.

   Amortization  of Deferred  Policy  Acquisition  Costs relates to the costs of
acquiring  new  business,  which vary with,  and are  primarily  related to, the
production of new annuity  business.  Such costs include  commissions,  costs of
policy issuance and  underwriting and selling  expenses.  Amortization was $27.1
million for the quarter  ended March 31, 2000  compared to $24.2 million for the
quarter  ended March 31,  1999.  The increase  during 2000  compared to 1999 was
primarily  related  to the  increase  in  investment  spread  from the growth of
business in force  associated with fixed and indexed products and from increased
sales of variable  annuity  products for the twelve months ended March 31, 2000.
Amortization  expense  represented  30.3% and  31.0% of  investment  spread  and
separate  account  fees  for  the  quarters  ended  March  31,  2000  and  1999,
respectively.

   Amortization of Deferred  Distribution  Costs relates to the  distribution of
mutual fund shares sold with 12b-1  distribution  fees and  contingent  deferred
sales  charges.  Amortization  was $10.2 million for the quarter ended March 31,
2000 compared to $9.5 million for the quarter ended March 31, 1999.

   Amortization   of   Intangible   Assets   relates  to  goodwill  and  certain
identifiable  intangible assets arising from business combinations accounted for
as purchases. Amortization was $5.1 million for the quarter ended March 31, 2000
compared to $5.0 million for the quarter  ended March 31, 1999.  The Company has
experienced higher than anticipated redemptions of assets under management at an
acquired  company,  which at March 31, 2000 had  goodwill  and other  intangible
assets of $83.3 million.  Although the Company has  determined  that there is no
impairment of goodwill and other  intangible  assets at this time, if the higher
level of  redemptions  were to  continue  and sales  were not to  increase,  the
Company's  estimate of related  future cash flows may change,  resulting  in the
need to record an impairment loss.

   Interest  Expense,  Net was $4.0 million for the quarter ended March 31, 2000
compared to $5.7 million for the quarter ended March 31, 1999.  Interest expense
primarily  consists  of interest  on notes  payable and  interest on the Liberty
Funds Group  revolving  credit  facility  which is utilized to finance  deferred
sales commissions paid in connection with the distribution of mutual fund shares
sold  with  12b-1  distribution  fees and  contingent  deferred  sales  charges.
Interest expense was net of interest income of $5.8 million and $3.1 million for
the quarters ended March 31, 2000 and 1999, respectively.

   Income Tax  Expense  was $17.7  million  or 37.3% of  pre-tax  income for the
quarter  ended March 31, 2000  compared  to $16.6  million,  or 37.7% of pre-tax
income for the quarter ended March 31, 1999.

Financial Condition

   Stockholders' Equity was $1.21 billion as of March 31, 2000 compared to $1.19
billion as of December 31,  1999.  Net income for the first three months of 2000
was $29.7 million and cash dividends on the Company's preferred and common stock
totaled  $1.6  million.  Common  stock  totaling  $1.3  million  was  issued  in
connection with the exercise of stock options.  An increase in accumulated other
comprehensive  loss which consists of net unrealized  investment  losses, net of
adjustments to deferred policy  acquisition  costs and income taxes,  during the
period decreased stockholders' equity by $4.5 million.

   Book Value Per Share  amounted to $25.32 at March 31, 2000 compared to $24.99
at December 31, 1999. Excluding net unrealized losses on investments, book value
per share  amounted to $28.72 at March 31, 2000 and $28.32 at December 31, 1999.
As of March 31, 2000, there were 47.8 million common shares outstanding compared
to 47.5 million shares as of December 31, 1999.

   Investments not including cash and cash equivalents, totaled $12.2 billion at
March 31, 2000 and December 31, 1999.

   The Company  manages the  majority of its  invested  assets  internally.  The
Company's  general  investment  policy is to hold fixed maturity  securities for
long-term  investment  and,  accordingly,  the  Company  does not have a trading
portfolio.  To provide for maximum  portfolio  flexibility  and  appropriate tax
planning,  the  Company  classifies  its  entire  portfolio  of  fixed  maturity
securities as "available for sale" and accordingly  carries such  investments at
fair value.  The Company's total  investments at March 31, 2000 and December 31,
1999  reflected  net  unrealized  losses of $288.1  million and $318.6  million,
respectively.

   Approximately  $11.3  billion,  or 81.0%,  of the Company's  general  account
investments  at March 31,  2000,  were rated by  Standard & Poor's  Corporation,
Moody's  Investors  Service  or under  comparable  statutory  rating  guidelines
established by the National Association of Insurance  Commissioners ("NAIC"). At
March 31, 2000,  the carrying value of  investments  in below  investment  grade
securities  represented  $1.3  billion or 9.1% of general  account  investments,
including cash and cash  equivalents in the Company's  annuity  operations,  and
certain  separate account  investments of $14.0 billion.  Below investment grade
securities  generally  provide  higher  yields and  involve  greater  risks than
investment  grade  securities  because their  issuers  typically are more highly
leveraged and more  vulnerable to adverse  economic  conditions  than investment
grade issuers. In addition,  the trading market for these securities may be more
limited than for investment grade securities.

   The Company  routinely  reviews its portfolio of investment  securities.  The
Company identifies  monthly any investments that require additional  monitoring,
and carefully  reviews the carrying value of such investments at least quarterly
to determine whether specific investments should be placed on a nonaccrual basis
and to determine  declines in value that may be other than temporary.  In making
these reviews, the Company principally  considers the adequacy of collateral (if
any),  compliance with contractual  covenants,  the borrower's  recent financial
performance, news reports, and other externally generated information concerning
the  borrower's   affairs.  In  the  case  of  publicly  traded  fixed  maturity
securities,  management also considers market value quotations if available.  As
of March 31, 2000 and December 31, 1999,  the carrying  value of fixed  maturity
securities that were  non-income  producing was $29.6 million and $22.6 million,
respectively, which constituted 0.2% of investments in each period.

Derivatives

   As a  component  of its  investment  strategy  and to reduce its  exposure to
interest  rate risk,  the Company  utilizes  interest rate and total return swap
agreements  and  interest  rate cap  agreements  to match assets more closely to
liabilities.  Interest rate swap  agreements  are  agreements to exchange with a
counterparty  interest rate payments of differing  character  (e.g.,  fixed-rate
payments exchanged for variable-rate  payments) based on an underlying principal
balance (notional principal) to hedge against interest rate changes. The Company
currently utilizes interest rate swap agreements to reduce asset duration and to
better match  interest  earned on  longer-term  fixed-rate  assets with interest
credited to  policyholders.  A total  return swap  agreement  is an agreement to
exchange  payments  based upon an  underlying  notional  balance  and changes in
variable rate and total return indices.  The Company  utilizes total return swap
agreements  to  hedge  its  obligations  related  to  certain  separate  account
liabilities.  The Company had 67 outstanding  swap  agreements with an aggregate
notional  principal amount of $3.6 billion and $3.4 billion as of March 31, 2000
and December 31, 1999, respectively.

   Interest rate cap agreements are agreements with a counterparty which require
the payment of a premium for the right to receive  payments  for the  difference
between the cap interest  rate and a market  interest  rate on specified  future
dates based on an underlying  principal  balance  (notional  principal) to hedge
against  rising  interest  rates.  There were no  outstanding  interest rate cap
agreements as of March 31, 2000.  The Company had interest  rate cap  agreements
with an aggregate notional amount of $50.0 million as December 31, 1999.

   With respect to the Company's  equity-indexed  annuities and certain separate
account  liabilities,  the Company buys call options,  futures and certain total
return swap  agreements on the S&P 500 Index to hedge its obligations to provide
returns  based upon this index.  The Company  had call  options  with a carrying
value of $587.3 million and $701.1 million as of March 31, 2000 and December 31,
1999, respectively. The Company had total return swap agreements with a carrying
value of $49.7  million and $37.8  million as of March 31, 2000 and December 31,
1999, respectively.

   There are risks  associated  with some of the  techniques the Company uses to
match its assets and liabilities. The primary risk associated with swap, cap and
call option  agreements is counterparty  non-performance.  The Company  believes
that  the  counterparties  to its  swap,  cap and  call  option  agreements  are
financially  responsible  and that the  counterparty  risk associated with these
transactions  is minimal.  Futures  contracts  trade on organized  exchanges and
therefore  have minimal credit risk. In addition,  swap and cap agreements  have
interest  rate risk and call  options,  futures  and certain  total  return swap
agreements  have  stock  market  risk.  These  swap  and  cap  agreements  hedge
fixed-rate  assets and the Company expects that any interest rate movements that
adversely  affect the market value of swap and cap agreements would be offset by
changes in the market values of such fixed rate assets. However, there can be no
assurance  that these  hedges will be  effective  in  offsetting  the  potential
adverse  effects of changes in  interest  rates.  Similarly,  the call  options,
futures and certain total return swap agreements hedge the Company's obligations
to provide returns on equity-indexed  annuities and certain separate liabilities
based upon the S&P 500 Index,  and the Company  believes  that any stock  market
movements that adversely  affect the market value of S&P 500 Index call options,
futures and certain total return swap agreements would be  substantially  offset
by a  reduction  in  policyholder  and  certain  separate  account  liabilities.
However,  there can be no  assurance  that these  hedges  will be  effective  in
offsetting the  potentially  adverse effects of changes in S&P 500 Index levels.
The Company's profitability could be adversely affected if the value of its swap
and cap agreements  increase less than (or decrease more than) the change in the
market  value of its fixed rate assets  and/or if the value of its S&P 500 Index
call  options,  futures and certain total return swap  agreements  increase less
than (or decrease more than) the value of the guarantees made to  equity-indexed
and certain separate account policyholders.

   In June 1998,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards  ("SFAS") No. 133  "Accounting for
Derivative  Instruments and Hedging Activities." This statement standardizes the
accounting for  derivative  instruments  and the  derivative  portion of certain
other  contracts that have similar  characteristics  by requiring that an entity
recognize  those  instruments at fair value.  This statement also requires a new
method of accounting for hedging transactions,  prescribes the type of items and
transactions  that may be hedged,  and specifies  detailed criteria to be met to
qualify  for hedge  accounting.  In June  1999,  the FASB  issued  SFAS No.  137
"Accounting for Derivative  Instruments and Hedging Activities - Deferral of the
Effective  Date of FASB  Statement  No. 133." SFAS No. 137 defers the  effective
date of SFAS No. 133 until fiscal years beginning  after June 15, 2000.  Earlier
adoption is permitted.  Upon adoption,  the Company will be required to record a
cumulative  effect  adjustment to reflect this accounting  change. At this time,
the Company has not  completed its analysis and  evaluation of the  requirements
and the impact of this statement.

Liquidity

   The Company is a holding company whose liquidity needs include the following:
(i) operating  expenses;  (ii) debt service;  (iii) dividends on preferred stock
and common stock; (iv) acquisitions; and (v) working capital where needed by its
operating  subsidiaries.  The Company's  principal sources of cash are dividends
from its operating  subsidiaries,  and, in the case of funding for  acquisitions
and certain long-term capital needs of its  subsidiaries,  long-term  borrowings
and offerings of preferred and common stock.

   The Company has a $150.0 million  revolving credit facility (the "Facility"),
established in April 1999 which is utilized to finance sales commissions paid in
connection  with  the  distribution  of  mutual  fund  shares  sold  with  12b-1
distribution fees and contingent deferred sales charges. This five year Facility
is  secured  by such  12b-1  distribution  fees and  contingent  deferred  sales
charges.  Interest accrues on the outstanding borrowings under the Facility at a
rate determined by sales of highly rated  commercial paper backed in part by the
security interest in such fees and charges. At March 31, 2000, the interest paid
on borrowings under the Facility was at the rate of 6.03% per annum.

   Current Rhode Island  insurance law applicable to Keyport permits the payment
of dividends or distributions,  which, together with dividends and distributions
paid  during the  preceding  12  months,  do not exceed the lesser of (i) 10% of
Keyport's  statutory  surplus as of the preceding  December 31 or (ii) Keyport's
statutory net gain from  operations for the preceding  fiscal year. Any proposed
dividend in excess of this amount is called an "extraordinary  dividend" and may
not be paid until it is approved by the  Commissioner  of Insurance of the State
of Rhode  Island.  As of March 31, 2000,  the amount of  dividends  that Keyport
could pay without such approval was $57.8 million. Future regulatory changes and
credit  agreements  may  create  additional  limitations  on the  ability of the
Company's subsidiaries to pay dividends.

   Based upon the  historical  cash flow of the Company,  the Company's  current
financial  condition  and the  Company's  expectation  that  there will not be a
material  adverse  change in the  results of  operations  of the Company and its
subsidiaries  during the next twelve months, the Company believes that cash flow
provided  by  operating  activities  over this period  will  provide  sufficient
liquidity for the Company to meet its working  capital,  capital  investment and
other operational cash needs, its debt service  obligations,  its obligations to
pay dividends on the preferred  stock and its intentions to pay dividends on the
common stock.  The Company may require external sources of liquidity in order to
finance material acquisitions where the purchase price is not paid in equity.

   Each of the  Company's  business  segments  has its own  liquidity  needs and
financial resources.  In the Company's annuity insurance  operations,  liquidity
needs and financial  resources  pertain to the management of the general account
assets and policyholder  balances.  In the Company's asset management  business,
liquidity needs and financial resources pertain to the investment management and
distribution  of mutual funds,  private  capital  management  and  institutional
accounts.  The Company expects that,  based upon their  historical cash flow and
current  prospects,  these  operating  subsidiaries  will be able to meet  their
liquidity  needs from internal  sources and, in the case of Liberty Funds Group,
from its credit  facility  used to finance sales of mutual fund shares sold with
12b-1 distribution fees and contingent deferred sales charges.

   Keyport  uses cash for the  payment of annuity and life  insurance  benefits,
operating   expenses  and  policy   acquisition   costs,  and  the  purchase  of
investments.  Keyport  generates  cash from annuity  premiums and deposits,  net
investment  income,  and from the sales  and  maturities  of fixed  investments.
Annuity   premiums,   maturing   investments  and  net  investment  income  have
historically  been  sufficient  to meet  Keyport's  cash  requirements.  Keyport
monitors cash and cash equivalents in an effort to maintain sufficient liquidity
and has  strategies  in place  to  maintain  sufficient  liquidity  in  changing
interest  rate  environments.  Consistent  with the  nature of its  obligations,
Keyport  has  invested a  substantial  amount of its general  account  assets in
readily marketable securities. As of March 31, 2000, $10.7 billion, or 76.8%, of
Keyport's general account investments are considered readily marketable.

   To the  extent  that  unanticipated  surrenders  cause  Keyport  to sell  for
liquidity purposes a material amount of securities prior to their maturity, such
surrenders  could have a material  adverse  effect on the  Company.  Although no
assurances can be given,  Keyport  believes that  liquidity to fund  anticipated
withdrawals  would  be  available  through  incoming  cash  flow and the sale of
short-term or floating-rate  investments,  thereby  precluding the sale of fixed
maturity  investments  in a potentially  unfavorable  market.  In addition,  the
Company's  fixed-rate  products  incorporate   surrender  charges  to  encourage
persistency and to make the cost of its policyholder  balances more predictable.
Approximately  75.0% of the Company's fixed annuity  policyholder  balances were
subject to surrender charges or restrictions as of March 31, 2000.

Year 2000

   The Year 2000  issue  relates  to  computer  programs  that use two digits to
identify a year in the date  field and  therefore  may not be able to  correctly
process dates after  December 31, 1999. As the Company relies  significantly  on
computer systems and applications in its operations,  it completed a remediation
plan that included  repairing or replacing  programs that were identified as not
being Year 2000  compliant.  As a result,  the  Company did not  experience  any
significant  Year 2000  problems with respect to computer  systems,  application
programs,  and non-information  technology systems. In addition, the Company did
not experience any significant  disruptions  related to interactions  with third
parties.  The Company is  continuing  to closely  monitor  critical  systems and
applications to ensure that no unexpected Year 2000 issues develop. There can be
no assurance  that there will be no such issues.  In the opinion of  management,
any additional  costs of addressing the Year 2000 issue are not expected to have
a material adverse effect on the Company's financial condition or its results of
operations.

Effects of Inflation

   Inflation has not had a material effect on the Company's consolidated results
of operations to date. The Company  manages its investment  portfolio in part to
reduce its exposure to interest rate fluctuations.  In general, the market value
of the  Company's  fixed  maturity  portfolio  increases or decreases in inverse
relationship  with  fluctuations  in  interest  rates,  and  the  Company's  net
investment  income increases or decreases in direct  relationship  with interest
rate changes.  For example,  if interest  rates  decline,  the  Company's  fixed
maturity  investments  generally  will  increase  in  market  value,  while  net
investment income will decrease as fixed maturity investments mature or are sold
and the  proceeds  are  reinvested  at reduced  rates.  Inflation  may result in
increased  operating expenses that may not be readily  recoverable in the prices
of the services charged by the Company.

Forward-Looking Statements

   The Company desires to take advantage of the "safe harbor"  provisions of the
Private Securities  Litigation Reform Act of 1995 (the "Reform Act").  Investors
are cautioned that all statements not based on historical  fact,  trend analyses
and  other  information  contained  in this  report  or in any of the  Company's
filings under Section 13 or 15 (d) of the  Securities  Exchange Act of 1934 (the
"Exchange Act"),  relative to the markets for the Company's  products and trends
in the Company's  operations or financial  results,  as well as other statements
including words such as "anticipate",  "believe", "plan", "estimate",  "expect",
"intend" and other similar expressions,  constitute  forward-looking  statements
under the Reform Act. These forward-looking statements are made based on current
expectations  and  assumptions  and are  subject  to known  and  unknown  risks,
uncertainties and other factors, many of which are beyond the Company's control,
that may cause actual results to be materially different from those expressed or
implied by the  forward-looking  statements.  Such factors include,  among other
things: (1) general economic  conditions and market factors,  such as prevailing
interest rate levels,  stock market  performance and  fluctuations in the market
for  retirement-oriented  savings products and investment  management  products,
which may  adversely  affect the ability of the Company to sell its products and
services  and the market  value of the  Company's  investments  and assets under
management  and,  therefore,  the  portion of its  revenues  that are based on a
percentage  of assets  under  management;  (2) the  Company's  ability to manage
effectively its investment  spread (i.e. the amount by which  investment  income
exceeds  interest  credited to annuity and life  insurance  policyholders)  as a
result of changes in interest rates and crediting rates to policyholders, market
conditions and other factors (the Company's  results of operations and financial
condition  are  significantly  dependent  on the  Company's  ability  to  manage
effectively its investment  spread);  (3) levels of surrenders,  withdrawals and
net  redemptions  of the Company's  retirement-oriented  insurance  products and
investment  management  products;  (4) relationships with investment  management
clients,  including  levels of assets under  management;  (5) the ability of the
Company  to manage  effectively  certain  risks with  respect to its  investment
portfolio, including risks relating to holding below investment grade securities
and the ability to dispose of illiquid and/or  restricted  securities at desired
times and prices,  and the  ability to manage and hedge  against  interest  rate
changes through  asset/liability  management techniques;  (6) competition in the
sale of the Company's products and services,  including the Company's ability to
establish and maintain  relationships  with  distributors  of its products;  (7)
changes in  financial  ratings of Keyport or those of its  competitors;  (8) the
Company's  ability  to  attract  and  retain  key  employees,  including  senior
officers,  portfolio  managers  and  sales  executives;  (9) the  impact  of and
compliance  by the  Company  with  existing  and  future  regulation,  including
restrictions  on the ability of certain  subsidiaries  to pay  dividends and any
obligations of the Company under any guaranty fund assessment laws; (10) changes
in  applicable  tax laws  which may  affect  the  relative  tax  advantages  and
attractiveness  of  some of the  Company's  products;  (11)  the  result  of any
litigation or legal proceedings involving the Company; (12) changes in generally
accepted  accounting  principles  and the impact of  accounting  principles  and
pronouncements on the Company's  financial  condition and results of operations;
(13) changes in the  Company's  senior debt  ratings;  (14) changes in operating
expense  levels;  (15)  acquisition  risks;  and (16) the other risk  factors or
uncertainties  contained  from  time  to time in any  document  incorporated  by
reference  in this report or otherwise  filed by the Company  under the Exchange
Act. Given these uncertainties, prospective investors are cautioned not to place
undue reliance on such forward-looking statements and no assurances can be given
that  the  estimates  and  expectations  reflected  in such  statements  will be
achieved.


<PAGE>


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

   There have been no material  changes during the first three months of 2000 in
the  Company's  market risks or in the methods  which the Company uses to manage
such risks,  which are described in the  Company's  Form 10-K for the year ended
December 31, 1999.

                                     Part II

 Item 6.  Exhibits and Reports on Form 8-K

(a)   Exhibits

   12 Statement re Computation of Ratios
   27 Financial Data Schedule

(b)   Reports on Form 8-K

   There were no reports on Form 8-K filed  during the  quarter  ended March 31,
2000.


<PAGE>


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                      LIBERTY FINANCIAL COMPANIES, INC.

                                              /s/ J. Andy Hilbert
                                      -------------------------------------
                                                J. Andy Hilbert
                                          (Duly Authorized Officer and
                                            Chief Financial Officer)





Date:   May 12, 2000



<PAGE>


                                  Exhibit Index

Exhibit No.   Description                                              Page
-----------   -----------                                              ----
     12      Statement re Computation of Ratios
     27      Financial Data Schedule