UNITED STATES
                       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 October 31, 1998

                                       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 0-21105

                      RESEARCH PARTNERS INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)


     Delaware                                                 13-3414302
-----------------------------------                       --------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                            Identification No.)

One State Street Plaza, New York, NY                             10004
----------------------------------------                  --------------------
(Address of principal executive offices)                       (Zip Code)

(212)509-3800
---------------------------------------------------
(Registrant's telephone number, including area code)


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.

Yes   X    No __


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

Class                                       Outstanding at December 1, 1998
-------------------------------             -------------------------------
Common Stock, $.0001 par value                     8,410,899 shares




<PAGE>


             RESEARCH PARTNERS INTERNATIONAL, INC. AND SUBSIDIARIES
                                      Index



Part I - Financial Information                                          Page

Item 1.   Financial Statements

     Consolidated Statements of Financial Condition as of
     October 31, 1998 (Unaudited) and January 31, 1998                    3

     Consolidated Statements of Operations for the three and nine
     months ended October 31, 1998 and 1997 (Unaudited)                   4

     Consolidated  Statements  of Changes in  Stockholders'  Equity 
     for the year ended January 31, 1998 and the nine months
     ended October 31, 1998 (Unaudited)                                   5

     Consolidated Statements of Cash Flows for the nine months
     ended October 31, 1998 and 1997 (Unaudited)                          6

     Notes to Consolidated Financial Statements                           7

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


Part II - Other Information

Item 2.   Changes in Securities and Use of Proceeds                      16

Item 6.   Exhibits and Reports on Form 8-K                               16

                                       2

<PAGE>


Part I - FINANCIAL INFORMATION
Item 1.  Financial Statements

             RESEARCH PARTNERS INTERNATIONAL, INC. AND SUBSIDIARIES
                 Consolidated Statements of Financial Condition

<TABLE>
<CAPTION>
                                                                             October 31,         January 31,
                                                                                1998                   1998
                                                                          --------------         ----------
                                                                           (Unaudited)
<S>                                                                       <C>                   <C>
Assets
Cash and cash equivalents                                                 $    5,811,000         $    8,111,000
Receivable from brokers and dealers                                            3,156,000                896,000
Securities owned, at market value                                              2,284,000             10,154,000
Securities owned, not readily marketable, at fair value                          430,000              1,443,000
Investments                                                                    4,372,000              3,640,000
Loans receivable                                                               1,605,000              1,404,000
Income taxes receivable                                                        2,059,000              3,544,000
Deferred tax asset                                                             1,070,000                      -
Office furniture, equipment and leasehold improvements, net                    2,135,000              1,580,000
Goodwill, net                                                                  3,722,000              3,684,000
Other assets                                                                   1,555,000              2,516,000
                                                                          --------------         --------------

Total assets                                                              $   28,199,000         $   36,972,000
                                                                          ==============         ==============

Liabilities and Stockholders' Equity
Liabilities:
   Securities sold, not yet purchased, at market value                    $      516,000         $    2,320,000
   Commissions payable                                                         1,521,000              1,441,000
   Deferred compensation                                                          11,000              1,796,000
   Deferred tax liability                                                              -                236,000
   Accrued expenses and other liabilities                                      2,404,000              2,982,000
                                                                          --------------         --------------
                                                                               4,452,000              8,775,000
   Liability subordinated to the claims of general creditors                     499,000                576,000
                                                                          --------------         --------------
   Total liabilities                                                           4,951,000              9,351,000
                                                                          --------------         --------------

Stockholders' equity:
   Preferred stock, $.10 par value; 1,200,000 shares authorized;
      1,140,000 shares issued and outstanding                                    114,000                114,000
   Common stock, $.0001 par value; 35,000,000 shares
     authorized; 9,209,875 shares issued; 8,410,899 and
      8,095,899 shares outstanding                                                 1,000                  1,000
   Additional paid-in capital                                                 20,912,000             20,710,000
   Retained earnings                                                           5,743,000             11,734,000
   Accumulated other comprehensive income                                         (6,000)               (36,000)
                                                                          --------------         --------------
                                                                              26,764,000             32,523,000
   Less treasury stock, at cost; 798,976 and 1,113,976 shares                 (3,516,000)            (4,902,000)
                                                                          --------------         --------------
   Total stockholders' equity                                                 23,248,000             27,621,000
                                                                          --------------         --------------

Total liabilities and stockholders' equity                                $   28,199,000         $36,972,000
                                                                          ==============         ===========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                        3
<PAGE>


             RESEARCH PARTNERS INTERNATIONAL, INC. AND SUBSIDIARIES
                      Consolidated Statements of Operations
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                 Three Months                             Nine Months
                                               Ended October 31,                       Ended October 31,
                                       ----------------------------------    ----------------------------------
                                           1998                1997                1998                1997
                                       ---------------    ---------------    ----------------    --------------
Revenues:
<S>                                   <C>                 <C>                <C>                 <C>            
   Commissions                        $     6,831,000     $    12,513,000    $     28,849,000    $    30,247,000
   Investment banking                         104,000             914,000           3,654,000          4,643,000
   Principal transactions                  (1,486,000)            913,000          (1,568,000)         1,605,000
   Interest                                   326,000             327,000             994,000          1,063,000
   Other                                      771,000             450,000           2,411,000            903,000
                                      ---------------     ---------------    ----------------    ---------------
Total revenues                              6,546,000          15,117,000          34,340,000         38,461,000
                                      ---------------     ---------------    ----------------    ---------------

Expenses:
   Compensation and benefits                7,021,000           9,968,000          26,721,000         26,796,000
   Occupancy and equipment                  1,484,000             943,000           4,292,000          2,501,000
   Communications                           1,347,000           1,242,000           3,858,000          3,609,000
   Brokerage, clearing and
     exchange fees                            882,000             966,000           2,737,000          2,532,000
   Professional fees                          525,000             271,000           1,478,000            756,000
   Business development                       392,000             419,000           1,580,000          1,606,000
   Investigations and settlements                   -             204,000                   -          2,192,000
   Other                                    1,205,000             965,000           2,467,000          2,443,000
                                      ---------------     ---------------    ----------------    ---------------
Total expenses                             12,856,000          14,978,000          43,133,000         42,435,000
                                      ---------------     ---------------    ----------------    ---------------

(Loss) income before income taxes          (6,310,000)            139,000          (8,793,000)        (3,974,000)

Income tax (benefit)                       (1,990,000)            196,000          (2,802,000)        (1,468,000)
                                      ---------------     ---------------    ----------------    ---------------

Net loss                              $    (4,320,000)    $       (57,000)   $     (5,991,000)   $    (2,506,000)
                                      ===============     ================   ================    ===============

Basic loss per common share           $         (0.53)     $        (0.01)    $         (0.74)    $         (0.31)
                                      ===============     ===============    ================    ===============

Diluted loss per common share         $         (0.53)     $        (0.01)    $         (0.74)    $         (0.31)
                                      ===============     ===============    ================     ===============

Weighted average common
   shares outstanding - basic               8,211,986           8,096,769           8,137,822           8,120,427
                                      ===============     ===============    ================     ===============

Weighted average common
   shares outstanding - diluted             8,211,986           8,096,769           8,137,822          8,120,427
                                      ===============     ===============    ================    ===============
</TABLE>


          See accompanying notes to consolidated financial statements.

                                        4
<PAGE>


             RESEARCH PARTNERS INTERNATIONAL, INC. AND SUBSIDIARIES
           Consolidated Statements of Changes in Stockholders' Equity
<TABLE>
<CAPTION>
                                                                                  Accumulated
                                            Preferred                                Other
                       Common Stock           Stock        Additional                Compre-     Treasury Stock
                     ---------------- -------------------   Paid-in     Retained     hensive    -----------------
                      Shares     Amt.   Shares     Amt.     Capital     Earnings     Income     Shares     Amount         Total
                     --------- ------ ----------  -------- -----------  -----------  -------   ---------  -----------  ----------
<S>                  <C>       <C>    <C>         <C>       <C>         <C>          <C>        <C>       <C>          <C>       
Balance at
 January 31, 1997    9,217,875 $1,000          -  $      -  $19,931,000 $18,247,000  $ (3,000)  (992,363) $(3,150,000) $35,026,000
Net loss                     -      -          -         -            -  (6,513,000)       -           -            -   (6,513,000)
Stock issued -
 acquisition                 -      -  1,140,000   114,000    1,376,000           -        -     152,000      482,000    1,972,000
Stock issued - 
compensation plan            -      -          -         -   (1,193,000)          -        -     288,944    1,193,000            -
Amortization of 
 unearned compen-
 sation                      -      -          -         -      545,000           -        -           -            -      545,000
Stock options 
 exercised                   -      -          -         -      (45,000)          -        -      34,443      124,000       79,000
Note receivable 
 forgiven                    -      -          -         -      100,000           -        -           -            -      100,000
Retirement of stock     (8,000)     -          -         -            -           -        -       8,000       35,000       35,000
Purchase of 
 treasury stock              -      -          -         -            -           -        -    (605,000)  (3,586,000)  (3,586,000)
Translation 
  adjustment                 -      -          -         -            -           -   (33,000)         -            -      (33,000)
Other                        -      -          -         -       (4,000)          -         -          -            -       (4,000)
                     --------- ------ ---------- --------- ------------ ----------- ---------  ---------  ----------- ------------

Balance at
 January 31, 1998    9,209,875  1,000  1,140,000   114,000   20,710,000  11,734,000   (36,000)(1,113,976)  (4,902,000)  27,621,000

Net loss                     -      -          -         -            -  (5,991,000)        -          -            -   (5,991,000)
Stock issued - 
 compensation plan           -      -          -         -       (6,000)          -         -     15,000       66,000       60,000
Stock issued - sale          -      -          -         -     (270,000)          -         -    300,000    1,320,000    1,050,000
Amortization of 
 unearned compensation       -      -          -         -      478,000           -         -          -            -      478,000
Translation adjustment       -      -          -         -            -           -    30,000          -            -       30,000
                     --------- ------ ---------- --------- ------------ ----------- ---------  ---------  ----------- ------------
Balance at
 October 31, 1998    9,209,875 $1,000  1,140,000 $ 114,000 $ 20,912,000 $ 5,743,000  $ (6,000)  (798,976) $(3,516,000) $23,248,000
                     ========= ====== ========== ========= ============ =========== =========  =========  =========== ============
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       5
<PAGE>


             RESEARCH PARTNERS INTERNATIONAL, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                     Nine Months Ended October 31,
                                                                 ------------------------------------
                                                                       1998                 1997
                                                                 --------------       ---------------

<S>                                                             <C>                    <C> 
Operating activities:
 Net loss                                                       $   (5,991,000)       $     (2,506,000)
 Adjustments to reconcile net loss to net
   cash used in operating activities:
  Depreciation and amortization                                        566,000                 536,000
  Deferred taxes                                                    (1,306,000)                506,000
  Gain on sale of subsidiary                                          (599,000)                      -
  Other                                                                546,000                 403,000
                                                                --------------        ----------------
                                                                    (6,784,000)             (1,061,000)
(Increase) decrease in operating assets:
  Receivable from brokers and dealers                               (2,260,000)              3,793,000
  Securities owned, at market value                                  7,870,000               1,783,000
  Securities owned, not readily marketable                           1,013,000                (183,000)
  Loans receivable                                                    (201,000)             (2,287,000)
  Income taxes receivable                                            1,485,000              (2,408,000)
  Other assets                                                         839,000              (1,284,000)
 Increase (decrease) in operating liabilities:
  Securities sold, not yet purchased                                (1,804,000)             (2,390,000)
  Commissions payable                                                   80,000                (283,000)
  Deferred compensation                                             (1,785,000)               (353,000)
  Income taxes payable                                                       -                (229,000)
  Accrued expenses and other liabilities                              (626,000)             (2,575,000)
  Translation adjustment                                                29,000                 (18,000)
                                                                --------------        ----------------
Net cash used in operating activities                               (2,144,000)             (7,495,000)
                                                                --------------        ----------------

Investing activities:
 Purchase of office furniture, equipment
   and leasehold improvements                                         (898,000)               (160,000)
 Investment in limited partnerships                                   (732,000)               (457,000)
 Acquisition, net of cash acquired                                           -                (176,000)
 Sale of subsidiary, net of cash sold                                  666,000                       -
 Goodwill resulting from acquisition                                  (158,000)                (58,000)
                                                                --------------        ----------------
Net cash used in investing activities                               (1,122,000)               (851,000)
                                                                --------------        ----------------

Financing activities:
 Issuance of common shares                                                   -                  75,000
 Sale (purchase) of treasury stock                                   1,050,000              (3,586,000)
 Repayment of subordinated debt                                        (84,000)               (186,000)
                                                                --------------        ----------------
Net cash provided by (used in) financing activities                    966,000              (3,697,000)
                                                                --------------        ----------------

Net change in cash and cash equivalents                             (2,300,000)            (12,043,000)
Cash and cash equivalents at beginning of year                       8,111,000              17,856,000
                                                                --------------        ----------------
Cash and cash equivalents at end of period                        $  5,811,000        $      5,813,000
                                                                ==============        ================
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       6
<PAGE>


             RESEARCH PARTNERS INTERNATIONAL, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements


1.  Basis of Presentation

The consolidated  financial statements include the accounts of Research Partners
International,  Inc.  and its  subsidiaries  (the  "Company").  All  significant
intercompany  accounts and transactions are eliminated in consolidation.  In the
opinion  of  management,  the  consolidated  financial  statements  reflect  all
adjustments,  which are all of a normal recurring  nature,  necessary for a fair
statement of the Company's  financial position and results of operations for the
interim periods  presented.  These consolidated  financial  statements should be
read in conjunction  with the Company's  consolidated  financial  statements and
notes  thereto for the year ended January 31, 1998, in its annual report on Form
10-K.  Certain  reclassifications  have been made to the prior  year  amounts to
conform to the current presentation.

The financial  statements conform with generally accepted accounting  principles
("GAAP").  The  preparation  of financial  statements  in  conformity  with GAAP
requires the Company to make estimates and assumptions  that affect the reported
amounts of assets and  liabilities  and  disclosures  of  contingent  assets and
liabilities  at the  date  of the  consolidated  financial  statements  and  the
reported  amounts of revenues and expenses during the reporting  period.  Actual
results could vary from these estimates.

The  Company's  principal  business  activities  are  affected by many  factors,
including  general  economic  and  market   conditions,   which  can  result  in
substantial  fluctuations in the Company's  revenues and net income.  Therefore,
the results of operations  for the nine months ended  October 31, 1998,  are not
necessarily  indicative  of the  results  which may be  expected  for the entire
fiscal year.

2. Sale of Subsidiary

On October 1, 1998, the Company sold its 60% majority  ownership interest in one
of its Swiss  subsidiaries,  GKN Asset  Management  AG, to a Swiss  investor for
1,000,000 Swiss francs, or $728,000.  The Company  recognized a gain of $599,000
on the sale, which is included in other income in the statement of operations.

3.  Net Capital Requirements

GKN Securities Corp. (GKN), Southeast Research Partners, Inc. ("Southeast"), and
Shochet  Securities,  Inc.  ("Shochet"),  all wholly owned  subsidiaries  of the
Company,  are  registered   broker-dealers  with  the  Securities  and  Exchange
Commission  (the  "SEC")  and  member  firms  of  the  National  Association  of
Securities  Dealers,  Inc. ("NASD").  As such, GKN,  Southeast,  and Shochet are
subject to the SEC's net capital rule, which requires the maintenance of minimum
net capital.

GKN has elected to compute net capital using the alternative method permitted by
the net capital rule,  which requires that it maintain  minimum net capital,  as
defined,  to be greater than or equal to $250,000.  At October 31, 1998, GKN had
net capital of $798,000.

Southeast  has  elected to compute  net  capital  under the  standard  aggregate
indebtedness  method  permitted by the net capital rule, which requires that the
ratio of  aggregate  indebtedness  to net  capital,  both as defined,  shall not
exceed 15 to 1. At October 31, 1998,  Southeast had net capital of $ 657,000 and
a net capital requirement of $101,000.  Southeast's net capital ratio at October
31, 1998, was 2.30 to 1.

                                       7
<PAGE>

Shochet has also  elected to compute net capital  under the  standard  aggregate
indebtedness  method  permitted  by the net capital  rule.  At October 31, 1998,
Shochet had net capital of $ 435,000 and a net capital  requirement of $100,000.
Shochet's net capital ratio at October 31, 1998, was 1.73 to 1.

4.  Earnings Per Share

Effective for the fiscal year ended January 31, 1998,  the Company  adopted SFAS
No. 128,  Earnings per Share ("SFAS 128"),  which  established new standards for
computing and presenting earnings per share ("EPS").  This statement changes the
calculation and presentation of EPS. The new presentation consists of basic EPS,
which  includes  no  dilution  and is  computed  by  dividing  net income by the
weighted-average number of common shares outstanding for the period, and diluted
EPS,  which is similar to the previously  disclosed  fully diluted EPS. SFAS 128
will  result  in basic  EPS  results  higher  than EPS as  calculated  under the
previous  method.  All  earnings  per share  amounts for all  periods  have been
presented  and,  where  appropriate,   restated  to  conform  to  the  SFAS  128
requirements.  For the three and nine month  periods  ended October 31, 1998 and
1997,  common  stock  equivalents,  consisting  of stock  options,  warrants and
convertible  preferred  stock,  were not included in the  computation of diluted
EPS, as the inclusion of such shares would be anti-dilutive due to the Company's
net loss in those periods.

5.   Supplemental Cash Flow Information
<TABLE>
<CAPTION>
                                                                     Nine Months Ended October 31,
                                                                   ----------------------------------
                                                                        1998                1997
                                                                  ----------------    ---------------
<S>                                                              <C>                  <C> 
Cash paid for:
Income taxes                                                      $        219,000    $       731,000
                                                                  ================    ===============
Interest                                                          $          9,000    $        26,000
                                                                  ================    ===============

Non-cash investing  transactions
 relating to the Company's purchase acquisition
 that is not reflected in the consolidated 
 statement of cash flows:
     Fair value of assets acquired                                $              -    $     2,156,000
     Goodwill acquired                                                           -          2,177,000
     Liabilities assumed                                                         -         (1,474,000)
     Preferred stock issued                                                      -         (1,094,000)
     Treasury stock issued                                                       -           (912,000)
                                                                  ----------------    ---------------
       Cash paid                                                                 -            853,000
       Less:  cash acquired                                                      -           (677,000)
                                                                  ----------------    ---------------
       Net cash paid for acquisition                              $              -    $       176,000
                                                                  ================    ===============

Non-cash financing transactions:
   Treasury stock issued for Incentive Compensation Plan          $         60,000    $     1,734,000
                                                                  ================    ===============
</TABLE>

6.   Commitments and Contingencies

Various legal  proceedings  are pending against the  broker-dealers.  Management
believes that, other than as reflected in the consolidated financial statements,
the aggregate liability resulting from these proceedings will not be material.


                                       8
<PAGE>


7.   Comprehensive Income

The Company has adopted  SFAS No. 130,  Reporting  Comprehensive  Income,  which
establishes  standards for the reporting and display of comprehensive income and
its components. Total comprehensive income measures all changes in stockholders'
equity resulting from  transactions of the period,  other than transactions with
stockholders.

The  components  of  comprehensive  income for the three and nine  months  ended
October 31, 1998 and 1997 are as follows:

<TABLE>
<CAPTION>
                                                Three months ended October 31,      Nine months ended October 31,
                                               --------------------------------   ---------------------------------   
                                                    1998               1997            1998              1997
                                               --------------   ---------------   --------------   ----------------   
<S>                                            <C>              <C>               <C>              <C>             
Net income                                     $   (4,320,000)  $      (57,000)   $   (5,991,000)  $    (2,506,000)
Other comprehensive income:
   Foreign currency translation
     adjustments                                       41,000          (14,000)           30,000           (33,000)
                                               --------------   --------------    --------------   ---------------
Total comprehensive income                     $   (4,279,000)  $      (71,000)   $   (5,961,000)  $    (2,539,000)
                                               ==============   ===============   ==============   ===============
</TABLE>

8.   Subsequent Event

On  November  4,  1998,  the  Company  and its  wholly  owned  subsidiary,  RPII
Acquisition  Corporation ("RPII Acquisition") entered into an Agreement and Plan
of Merger with Gaines,  Berland Inc.  ("GBI").  The  agreement  provides for the
merger  of RPII  Acquisition  with and into  GBI,  with GBI to be the  surviving
corporation and a wholly owned subsidiary of the Company.  GBI is engaged in the
business  of  investment  banking,  securities  trading  and  brokerage  and the
providing  of  securities  research  services.  The  merger  is  expected  to be
consummated in the first quarter of 1999.




                                       9

<PAGE>


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


The following  analysis of the consolidated  results of operations and financial
condition  of  Research  Partners  International,  Inc.  and  Subsidiaries  (the
"Company")  should  be read  in  conjunction  with  the  Consolidated  Financial
Statements  included elsewhere herein, and with the Management's  Discussion and
Analysis of the Financial  Condition  and Results of Operations  included in the
Company's Fiscal 1998 Annual Report on Form 10-K.

Business Environment

The Company's primary business activities,  institutional  research,  investment
banking, securities brokerage and securities trading, with an emphasis on small-
and  mid-capitalization  companies,  are subject to general  economic and market
conditions and the volatility of trading  markets,  specifically  the small- and
mid-capitalization  market.  The quarter  ended October 31, 1998 saw some of the
poorest market  conditions in years,  with lows reached in early October,  after
highs  for  the  year  reached  in  the  previous  quarter.   Overseas  economic
difficulties  contributed  to  U.S.  market  volatility,   which  accounted  for
significant  market value losses for the Company's  investment  inventory.  This
volatility  additionally  essentially  dried  up the  IPO  market  and  affected
investor confidence,  significantly  impacting the firm's investment banking and
commission revenues.

The results of operations  for the quarter and for the nine months ended October
31, 1998 are not necessarily indicative of the results which may be expected for
the entire fiscal year.

Results of Operations

Three Months Ended October 31, 1998 vs. Three Months Ended October 31, 1997
---------------------------------------------------------------------------

Net loss for the three months ended October 31, 1998 was  $4,320,000 as compared
with a $57,000 loss for the three months ended October 31, 1997.  Loss per share
of  common  stock for the  three  months  ended  October  31,  1998 was $0.53 as
compared to $0.01 loss per share for the three  months  ended  October 31, 1997.
The decrease was primarily  attributable to lower investment banking activity in
the  quarter  ended  October  31,  1998,   and  larger  losses  from   principal
transactions and decreased  commission  revenue.  These decreases were partially
offset by an increase in other revenue.

Revenues

Total  revenues  decreased by 57% to $6,546,000  for the third quarter of fiscal
1999,  mainly as a result of trading and investment  account  losses,  decreased
commission  revenue and a decrease in  investment  banking  activity,  partially
offset by an increase in other income.

Commission revenues decreased by $5,682,000,  or 45%, for the third quarter. The
decrease was primarily attributable to a 44% decrease in average commissions per
trade as compared to the same period in the prior year.

Investment  banking  revenues  decreased by $810,000,  or 89%.  During the third
quarter of fiscal  1999 the  Company  raised  $625,000  for a  corporate  client
through  one  private  placement.  In the same period in fiscal 1998 the Company
raised  $3,444,000  for  its  clients  through  three  private  placements.  The
Company's  investment  banking  focus has shifted to being a co-manager on small
and mid-cap issues,  as opposed to primarily being the sole manager on micro-cap
underwritings.

                                       10


<PAGE>

Principal  transactions  generated  losses of $1,486,000 in the third quarter of
fiscal  1999,  as opposed to a $913,000  gain in the fiscal  1998  quarter.  The
Company's  investment  account  generated  $953,000 in losses in the fiscal 1999
quarter,  as compared to $2,206,000 in gains in the fiscal 1998 quarter.  As the
majority  of the  Company's  investments  are in small-  and  mid-capitalization
stocks, the market decline which began in September and reached its lowest point
in October, before rallying slightly, negatively impacted the Company's revenues
in the current quarter as compared with the previous year when market conditions
were more favorable.  Market making  activities for the quarter generated losses
of $533,000 and $1,293,000 in fiscal 1999 and 1998, respectively.

Other revenues increased 71% to $771,000, primarily as a result of a gain on the
sale of one of the Company's Swiss subsidiaries.

Expenses

Total expenses for the quarter in fiscal 1999 were  $12,856,000,  a 14% decrease
from the same quarter in fiscal 1998. The decrease is attributable  primarily to
less compensation and benefits expense,  partially offset by increased occupancy
and equipment charges and professional fees.

Compensation  and benefits expense  decreased 30% to $7,021,000.  These expenses
are  primarily  variable as  commissions  to brokers are paid as a percentage of
commission revenues generated. The expense decrease in fiscal 1999 is consistent
with the decrease in commission  revenue,  partially  offset by personnel  costs
associated  with the Company's  fiscal 1999 expansion into day trading and fixed
income activities.

Occupancy and equipment expenses increased $541,000, or 57% over fiscal 1998, as
a result  of the  addition  of new  branch  offices,  the move of the  Company's
corporate  headquarters,  and the  investment  made  to  upgrade  the  Company's
technological infrastructure.

Communications  expense  increased  by  $105,000,  or  8%,  as a  result  of the
Company's new business ventures and expanded facilities.

Brokerage,  clearing and exchange fees decreased by $84,000 or 9%. This decrease
was attributable to a decrease in trade volume.

Professional  fees  increased  by $254,000  or 94%,  mainly as a result of costs
associated  with  expanding  the  firm's  business,  complying  with  regulatory
requirements and supporting the firm's technological infrastructure.

Business  development  expenses  decreased  by 6% to $392,000  due to  decreased
promotional activities.

Investigations   and  settlements  were   eliminated,   as  the  SEC  and  NASDR
investigatory matters are settled and have been completed.

Other expenses  increased  $240,000,  or 25% primarily due to increased reserves
for potential litigation offset by decreased amortization of recruiting payments
to brokers.

Weighted average common shares outstanding

The average  number of common  shares and common stock  equivalents  outstanding
used in the  computation  of basic and  diluted  earnings  per common  share was
8,211,986  for the third  quarter of fiscal  1999,  compared  with  8,096,769 in
fiscal 1998. The change is primarily  attributable to the sale of treasury stock
to a Swiss  investor  which  occurred  at the  beginning  of October  during the
current quarter.

                                       11
<PAGE>

Nine Months Ended October 31, 1998 vs. Nine Months Ended October 31, 1997
-------------------------------------------------------------------------

Net loss for the nine months ended  October 31, 1998 was  $5,991,000 as compared
with a net loss of $2,506,000  for the nine months ended October 31, 1997.  Loss
per share of common stock for the nine months  ended  October 31, 1998 was $0.74
as compared to $0.31 for the nine months ended October 31, 1997. The decrease in
operating  results is  primarily  the result of trading and  investment  revenue
losses,  offset,  in  part,  by the  elimination  of  expenses  associated  with
investigations and settlements.

The results of operations for the nine months are not necessarily  indicative of
the results that may be expected for the entire fiscal year.

Revenues

Total revenues decreased $4,121,000 or 11% to $34,340,000, mainly as a result of
losses from principal  transactions  and decreased  commission  revenues.  These
decreases were partially offset by an increase in other income.

Commission  revenues  decreased  5%, or  $1,398,000,  for the nine months  ended
October 31, 1998. The Company  executed trades during the period with an average
commission 28% lower as compared to the same period in the prior year, offset by
an increase in trade volume of 33%.

Investment banking revenues decreased by $989,000 or 21%. During fiscal 1999 the
Company raised $24.1 million for corporate  clients through two public offerings
and two private placements. In the same period in fiscal 1998 the Company raised
$55.6  million for its clients  through four public  offerings and seven private
placements.

Principal  transactions  generated losses of $1,568,000 in the first nine months
of fiscal 1999, a 198% decrease from the  $1,605,000  gain in the same period in
fiscal 1998. The investment  account  generated losses of $55,000 for the fiscal
1999 period as opposed to a $3,294,000  gain in fiscal 1998.  As the majority of
the  Company's  investments  are in small- and  mid-capitalization  stocks,  the
market decline which began in September and reached its lowest point in October,
before  rallying  slightly,  negatively  impacted the Company's  revenues in the
current  quarter as compared with the previous year when market  conditions were
more  favorable.  Market making  activities  generated  losses of $1,513,000 and
$1,689,000 in the nine months ended October 31, 1998 and 1997, respectively.

Other revenues  increased  $1,508,000 to  $2,411,000,  mainly as a result of the
Company's revenue from merchant banking and asset management activities, as well
as a gain on the sale of one of the Company's Swiss subsidiaries.

Expenses

Total  expenses  for the first nine  months of fiscal 1999 were  $43,133,000,  a
$698,000  increase  over the same  period in fiscal  1998.  As a  percentage  of
revenues,  these  expenses  increased from 110% in fiscal 1998 to 126% in fiscal
1999.

Compensation  and benefits  expense  decreased  less than 1% from fiscal 1998 to
fiscal 1999. The decrease  attributable to the decrease in commission revenue is
offset by  increases  related to the  Company's  expansion  into day trading and
fixed income activities.

                                       12
<PAGE>

Occupancy and equipment expenses increased $1,791,000,  or 72% over fiscal 1998,
as a result of the  addition of new branch  offices,  the move of the  Company's
corporate  headquarters,  and the  investment  made  to  upgrade  the  Company's
technological infrastructure.

Communications  expense  increased  by  $249,000,  or  7%,  as a  result  of the
Company's new business ventures and expanded facilities.

Brokerage, clearing and exchange fees increased by $205,000 or 8%. This increase
was  attributable  to an increase  in trade  volume for the first nine months of
fiscal 1999, as compared with fiscal 1998.

Professional  fees  increased  by  $722,000  or 96%  mainly as a result of costs
associated  with  expanding  the  firm's  business,  complying  with  regulatory
requirements and supporting the firm's technological infrastructure.

Business  development  expenses  decreased by 2% to $1,580,000  due to decreased
promotional activities.

Investigations   and  settlements  were   eliminated,   as  the  SEC  and  NASDR
investigatory matters are settled and have been completed.

Other expenses increased $24,000,  or 1% primarily due to increased reserves for
potential litigation offset by decreased  amortization of recruiting payments to
brokers.

Weighted average common shares outstanding

The average  number of common  shares and common stock  equivalents  outstanding
used in the computation of basic and diluted loss per common share was 8,137,822
for the first nine  months of fiscal  1999 and  8,120,427  for the first half of
fiscal  1998.  The  majority of the change is  attributable  to the  issuance of
treasury stock for an employee award during the second quarter of fiscal 1999.

Liquidity and Capital Resources

Approximately 40% of the Company's assets at October 31, 1998 are highly liquid,
consisting primarily of cash and cash equivalents,  securities inventories,  and
receivables from other broker-dealers, all of which fluctuate depending upon the
levels  of  customer   business   and   trading   activity.   Receivables   from
broker-dealers,  which are primarily from the Company's  clearing  broker,  turn
over rapidly.  As a securities  dealer, the Company may carry significant levels
of trading  inventories  to meet  customer  needs.  The  Company's  inventory of
market-making securities is readily marketable; however, holding large blocks of
the same  security may limit  liquidity and prevent  realization  of full market
value  for  the  securities.  Securities  owned,  but  not  readily  marketable,
represent underwriter warrants and the securities underlying such warrants.  The
liquidity of these  securities is limited.  A relatively small percentage of the
Company's  total assets are fixed.  The Company's total assets or the individual
components of total assets may vary  significantly from period to period because
of changes  relating to customer  demand,  economic and market  conditions,  and
proprietary trading strategies.

GKN,  Southeast,  and Shochet,  the Company's domestic  operating  broker-dealer
subsidiaries,  are subject to the net capital rules of the National  Association
of Securities  Dealers,  Inc. (NASD) and the Securities and Exchange  Commission
(SEC). As such, they and the Company are subject to certain  restrictions on the
use of capital and its related  liquidity.  GKN's,  Southeast's,  and  Shochet's
respective  net  capital  positions  as of  October  31,  1998,  were  $798,000,
$657,000,   and   $435,000,   which  were   $548,000,   $556,000  and  $335,000,
respectively, in excess of their respective net capital requirements.


                                       13
<PAGE>

In conjunction with the Company's move of its corporate headquarters in New York
City the Company has significantly  upgraded its  technological  infrastructure.
The combined costs of the move and the  technological  investment  were financed
through a series of  operating  leases.  These  leases  total $4.8  million.  As
security for these leases,  the Company arranged for a standby letter of credit.
As  collateral  for the  standby  letter of credit,  the Company has placed $2.4
million in a  restricted  cash escrow  account  with the  provider.  The Company
intends to use debt and lease financing prudently in the future.

The  Company's  overall  capital and funding needs are  continually  reviewed to
ensure that its capital  base can support the  estimated  needs of its  business
units.  These  reviews take into account  business  needs as well as  regulatory
capital requirements of the subsidiaries.  Based upon these reviews,  management
believes that the Company's capital structure is adequate for current operations
and reasonably foreseeable future needs.

Other Matters

Year 2000 Computer Issue

The Company  initiated a  firm-wide  program to address the "Year 2000  Computer
Issue" in order to prepare its computer  systems and  applications  for properly
processing dates after December 31, 1999. The Company's program is proceeding on
schedule and it is the  Company's  expectation  that it will have its  firm-wide
Year 2000 solution substantially in place by June 30, 1999.

All of the Company's  computer  programs are provided by third party vendors and
service  providers.  Most of the  programs  were  purchased  after the Year 2000
Computer issue became widely recognized.  The Company has sought, and expects to
receive, written confirmation from its third-party program and service providers
that the Year 2000 Computer  Issue has been  appropriately  managed.  Schroder &
Co., the Company's  clearing  firm, is the largest and most  important  computer
services related vendor. Schroder & Co. has provided the Company with assurances
that it expects to appropriately manage the Year 2000 Computer Issue on a timely
basis.

The Year 2000  Computer  Issue  creates a risk for the Company  from  unforeseen
problems in its own computer systems, third-party vendors and service providers,
and from third  parties with whom the Company  deals  worldwide.  The Company is
continuing to communicate with its third-party  vendors and service providers to
determine   the  likely   extent  to  which  the  Company  may  be  affected  by
third-parties'  Year 2000  plans and target  dates.  In this  regard,  while the
Company does not now expect material  financial exposure as a result of the Year
2000 problem,  there can be no guarantee  that the systems of other  entities on
which the Company relies will be remediated on a timely basis, or that a failure
to remediate by another party,  would not have a material  adverse effect on the
Company.  Such failures could have a material impact on the Company's ability to
conduct business.

Based on information  currently available,  the Company does not expect its Year
2000  expenditures for 1998 and over the next two years to be a material cost to
the  Company.  The  expected  costs  of the  Year  2000  program  are  based  on
management's current estimates;  however, actual results could differ materially
from those plans.

New Accounting Pronouncements

In March 1997, the Financial  Accounting Standards Board (FASB) issued Statement
of  Financial  Accounting  Standards  No.  128,  Earnings  Per Share (SFAS 128),
effective  beginning in the fiscal year ending January 31, 1998.  This statement
changes the calculation and presentation of earnings per common share (EPS). The
new  presentation  consists of basic EPS,  which  includes  no  dilution  and is
computed by dividing net income by the weighted-average  number of common shares
outstanding  for the period,  and diluted EPS,  which is similar to the previous
fully diluted EPS. The financial  statements  reflect the implementation of SFAS
128.

                                       14
<PAGE>

In June 1997, the FASB issued  Statement of Financial  Accounting  Standards No.
130,  Reporting  Comprehensive  Income  (SFAS 130),  effective  beginning in the
fiscal year ending January 31, 1999.  This statement  establishes  standards for
the  reporting and display of  comprehensive  income and its  components.  Total
comprehensive income measures all changes in stockholders' equity resulting from
transactions  of the period,  other than  transactions  with  stockholders.  The
financial statements reflect the implementation of SFAS 130.

In  February  1998,  the FASB  issued SFAS 132,  "Employers'  Disclosures  about
Pensions and Other  Postretirement  Benefits,"  which  revises and  standardizes
pensions and other  postretirement  benefit plan  disclosures.  The Statement is
effective for fiscal years beginning after December 15, 1997. The effect of SFAS
132  is  not  expected  to be  material  to the  Company's  financial  statement
disclosures.

In June 1998, the FASB issued SFAS 133,  "Accounting for Derivative  Instruments
and Hedging  Activities."  SFAS 133  establishes  standards for  accounting  and
reporting of derivative  instruments,  including certain derivative  instruments
embedded in other contracts,  and hedging activities.  SFAS 133 is effective for
fiscal quarters beginning after June 15, 1999. The Company expects to adopt this
standard  when  required in fiscal  year 2000 and is  currently  evaluating  the
potential impact on the Company's accounting for such activities.  The effect of
SFAS 133 is not  expected to be material to the  Company's  financial  statement
disclosures.

Safe Harbor Cautionary Statement

The Company occasionally makes forward-looking  statements such as forecasts and
projections  of  expected  future  performance  or  statements  of its plans and
objectives.  When used in this report and in future  filings by the Company with
the SEC, in the Company's  press releases and in oral  statements  made with the
approval of an authorized executive officer of the Company, the words or phrases
"will likely result," "the Company  expects," "will continue," "is anticipated,"
"estimated,"   "project,"  or  "outlook"  or  similar   expressions   (including
confirmations  by an  authorized  executive  officer of the  Company of any such
expressions  made by a third party with  respect to the Company) are intended to
identify forward-looking statements within the meaning of the Private Securities
Litigation  Reform Act of 1995.  The  Company  wishes to caution  readers not to
place  undue  reliance  on any such  forward-looking  statements,  each of which
speaks only as of the date made.  Such  statements  are subject to certain risks
and  uncertainties  that could cause actual  results to differ  materially  from
historical earnings and those presently  anticipated or projected.  Factors that
could affect the Company's results of operations and cause its results to differ
from these  statements  include the volatility and price level of the securities
markets; the volume, size and timing of securities transactions;  the demand for
investment  banking  services;  the level and volatility of interest rates;  the
availability  of  credit;  legislation  affecting  the  business  and  financial
communities; and the economy in general. For a more complete discussion of these
and other factors, see the Company's  registration  statement filed on Form S-1,
as amended (No. 333-05273),  and the Company's periodic Form 10-K, 10-Q, and 8-K
filings  with the SEC.  The Company has no  obligation  to publicly  release the
result of any revisions  that may be made to any  forward-looking  statements to
reflect anticipated or unanticipated events or circumstances occurring after the
date of such statements.


                                       15
<PAGE>


Part II - OTHER INFORMATION


Item 2.   Changes in Securities and Use of Proceeds

          Effective  October 1, 1998, the Company sold to Dr. Ernst  Muller-Mohl
          all  of the  outstanding  stock  owned  by the  Company  in GKN  Asset
          Management AG (60 shares of common stock),  for Swiss francs 1 million
          (U.S. $728,000).

          Effective  October  1,  1998,  the  Company  also  sold  to Dr.  Ernst
          Muller-Mohl  300,000 shares of the Company's treasury Common Stock for
          $1,050,000.

          Each  of the  above-referenced  sales  was  made by the  Company,  not
          involving  any  public  offering,  pursuant  to  Section  4(2)  of the
          Securities Act of 1933, as amended.

Item 6.  Exhibits and Reports on Form 8-K

          (a) Exhibits:

          27 - Financial Data Schedule BD

          (b) Reports on Form 8-K:

          The  Company  filed a Current  Report on Form 8-K,  dated  November 4,
          1998,  reporting  under Item 2 (Acquisition or Disposition of Assets),
          the execution  and a  description  of the Agreement and Plan of Merger
          between the Company,  its wholly owned  subsidiary,  RPII  Acquisition
          Corporation, and Gaines, Berland Inc.


                                       16
<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.


                                         RESEARCH PARTNERS INTERNATIONAL, INC.


Date:  December 15, 1998                 /s/ David M. Nussbaum
                                         -------------------------------
                                         David M. Nussbaum
                                         Chairman of the Board and
                                         Chief Executive Officer



                                         /s/ Richard M. Feldman
                                         -------------------------------
                                         Richard M. Feldman, 
                                         Senior Vice President and
                                         Chief Financial Officer

                                       17
<PAGE>

             RESEARCH PARTNERS INTERNATIONAL, INC. AND SUBSIDIARIES
                                  Exhibit Index



Number       Description

27           Financial Data Schedule BD (10/31/98)



                                       18
<PAGE>