<PAGE> 1
                              UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.  20549


                              FORM 10-QSB


            Quarterly report under Section 13 or 15(d) of the
                     Securities Exchange Act of 1934


              For the quarterly period ended March 31, 1998


                     Commission file number: 0-22629


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


              Delaware                              35-1797759
   (State or other jurisdiction of               (I.R.S. Employer
   incorporation or organization)              Identification No.)


             431 North Pennsylvania Street
                 Indianapolis, Indiana             46204-1873
        (Address of principal executive offices)   (Zip code)

Issuer's telephone number, including area code:  (317) 634-3301

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.
Yes [ X ]  No [   ]

As of May 7, 1998, the registrant had outstanding 1,276,100 shares of Common
Stock, $.01 par value.



<PAGE> 2

<TABLE>
                              TABLE OF CONTENTS
<CAPTION>
                                                                          Page
                                                                          ----
<S>                                                                        <C>
PART I.     FINANCIAL INFORMATION                                           3

Item 1.     Financial Statements                                            3

            Consolidated Balance Sheets                                     3

            Consolidated Statements of Income                               5

            Consolidated Statements of Cash Flows                           7

            Notes to Consolidated Financial Statements                      9

Item 2.     Management's Discussion and Analysis of Financial
            Condition and Results of Operations                            15

            Overview                                                       15

            Comparison of Results for the Three Months Ended
            March 31, 1998 and 1997                                        16

            Liquidity and Capital Resources                                17

PART II.    OTHER INFORMATION                                              17

Item 3.     Changes in Securities and Use of Proceeds                      17

Item 4.     Submission of Matters to a Vote of Securityholders             17

Item 6.     Exhibits and Reports on Form 8-K                               17

SIGNATURE PAGE                                                             18

EXHIBIT INDEX                                                              19
</TABLE>


                                    - 2 -
<PAGE> 3

PART I.     FINANCIAL INFORMATION

Item 1.     FINANCIAL STATEMENTS:

<TABLE>
UNIFIED FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                                                                 March 31,             December 31,
                                                                                   1998                   1997
                                                                                -----------            ------------
                                                                                (unaudited)
<S>                                                                             <C>                     <C>
ASSETS:
CURRENT ASSETS:
   Cash and cash equivalents                                                    $1,142,926              $  605,654
   Investments in affiliated mutual funds                                          481,658                 520,334
   Investments in non-affiliated mutual funds                                      205,940                 187,603
   Note receivable - affiliated company                                                 --                  50,000
   Note receivable - non-affiliated company                                             --                   4,502

   Accounts receivable (net of allowance for
      doubtful accounts of $2,041)                                               1,322,052               1,505,600

   Prepaid and sundry assets                                                       173,195                 141,042
                                                                                ----------              ----------

Total current assets                                                             3,325,771               3,014,735
                                                                                ----------              ----------

NON-CURRENT ASSETS:
   Investment in debt securities                                                   888,525                 958,604
   Organization cost of net accumulated
      amortization of $192,995 and
      $6,900, respectively                                                         396,449                   2,100
   Equity in and advances to affiliate                                                  --                 284,994
   Notes receivable, net of current maturity                                            --                   8,090

FIXED ASSETS, at cost:
   Equipment and furniture (net of accumulated
      depreciation of $651,709 and $590,887,
      respectively)                                                                580,466                 590,059
   Capitalized leased equipment (net of accumulated
      depreciation of $61,976 and $55,465,
      respectively)                                                                 68,251                  74,762
                                                                                ----------              ----------

Total non-current and fixed assets                                              $1,933,691              $1,918,609

Total assets                                                                    $5,259,462              $4,933,344
                                                                                ==========              ==========

See notes to consolidated financial statements.


                                    - 3 -
<PAGE> 4

<CAPTION>
                                                                                 March 31,             December 31,
                                                                                   1998                    1997
                                                                                 ---------             ------------
<S>                                                                             <C>                     <C>
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
   Current portion of capitalized leases                                        $   22,200              $   30,090
   Current portion of bank, line-of-credit                                          86,154                  30,719
   Accounts payable and accrued liabilities                                        851,793                 617,637
   Accrued compensation and benefits                                               268,908                 162,273
   Payable to broker/dealers                                                       293,889                 274,046
   Income taxes payable                                                              5,548                  14,355
   Deferred income taxes                                                            59,918                  24,700
   Other liabilities                                                               724,449                 740,055
                                                                                ----------              ----------

Total current liabilities                                                        2,312,859               1,893,875
                                                                                ----------              ----------

LONG-TERM LIABILITIES:
   Long-term capitalized leases, net of current portion                             15,480                  21,374
   Bank line of credit, net of current portion                                     258,462                  92,158
   Deferred income taxes                                                               800                     800
                                                                                ----------              ----------

Total long-term liabilities                                                        274,742                 114,332
                                                                                ----------              ----------

Total liabilities                                                                2,587,601               2,008,207
                                                                                ----------              ----------

Commitments and contingencies

Stockholders' equity:
   Common Stock, par value $.01 per share, authorized
      10,000,000 shares; outstanding 1,046,976 and
      1,027,776 shares, respectively                                                14,970                  14,778
   Preferred Stock Series A, par value $.01 per share,
      authorized 10,000 shares; outstanding 8,486 shares                             8,486                   8,486
   Preferred Stock Series B, par value $.01 per share,
      authorized 10,000 shares; outstanding 8,583 shares                             8,583                   8,583
   Preferred Stock Series C, par value $.01 per share,
      authorized 2,100 shares; outstanding 0 shares                                     --                      --
   Additional paid-in capital                                                    2,157,716               1,977,788
   Retained earnings                                                               482,106                 915,502
                                                                                ----------              ----------
Total stockholders' equity                                                       2,671,861               2,925,137
                                                                                ----------              ----------

Total liabilities and stockholders' equity                                      $5,259,462              $4,933,344
                                                                                ==========              ==========

See notes to consolidated financial statements.
</TABLE>


                                    - 4 -
<PAGE> 5

<TABLE>
UNIFIED FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
<CAPTION>
                                                                                        Three Months Ended
                                                                                 ---------------------------------
                                                                                 March 31,               March 31,
                                                                                   1998                    1997
                                                                                 ---------               ---------
<S>                                                                             <C>                     <C>
REVENUE:
   Brokerage                                                                    $  747,824              $  659,966
   Fund services                                                                   237,482                 400,530
   Investment advisory                                                             678,169                 352,879
   Trust and administration services                                               306,791                  71,703
   Software and programming                                                          8,851                  47,198
   Other income                                                                     63,445                  40,039
                                                                                ----------              ----------

Total gross revenue                                                              2,042,562               1,572,315
                                                                                ----------              ----------

COST OF SALES:
   Brokerage revenue charges                                                       513,208                 435,895
   Investment fees                                                                  36,967                  17,828
   Administration fees                                                              17,986                  15,349
                                                                                ----------              ----------

Total cost of sales                                                                568,161                 469,072
                                                                                ----------              ----------

Gross profit                                                                     1,474,401               1,103,243
                                                                                ----------              ----------

EXPENSES:
   Employee compensation and benefits                                              666,283                 748,626
   Brokerage operating charges                                                      80,884                  69,957
   Fund services operating charges                                                  17,928                  56,999
   Mail and courier service                                                         21,714                  10,387
   Telephone                                                                        24,049                  32,286
   Equipment rental and maintenance                                                 32,373                  19,810
   Occupancy                                                                        70,019                  48,351
   Depreciation                                                                     72,755                  48,298
   Other operating expenses                                                        222,141                 119,786
                                                                                ----------              ----------

Total expenses                                                                   1,208,146               1,154,500
                                                                                ----------              ----------

Income from operations                                                             266,255                 (51,257)
                                                                                ----------              ----------

OTHER INCOME (LOSS):
   Unrealized gain or (loss) on securities                                          36,397                  (5,192)
   Realized gain on securities                                                       5,336                      --
   Results of loss of affiliate                                                    (39,945)                (14,414)
   Gain on sale/disposal or fixed assets                                             5,283                      --
                                                                                ----------              ----------

Total other income (loss)                                                            7,071                 (19,606)
                                                                                ----------              ----------

INCOME BEFORE INCOME TAXES                                                         273,326                 (70,863)


                                    - 5 -
<PAGE> 6

<S>                                                                             <C>                     <C>
INCOME TAXES:
   Current                                                                      $      600              $      600
   Deferred                                                                         (5,886)                  3,675
                                                                                ----------              ----------

NET INCOME                                                                      $  278,612              $  (75,138)
                                                                                ==========              ==========

Preferred dividends                                                             $   34,418              $   34,325
Income available to common stockholders                                            244,194                (109,463)
                                                                                ==========              ==========

Per share data:
Weighted average common shares outstanding:
   Basic                                                                         1,040,416                 455,008
   Diluted                                                                       1,046,976               1,027,776
Earnings per share of common stock:
   Basic                                                                        $     0.23              $    (0.24)
                                                                                ==========              ==========
   Diluted                                                                            0.23                   (0.11)
                                                                                ==========              ==========

See notes to consolidated financial statements.
</TABLE>


                                    - 6 -
<PAGE> 7

<TABLE>
UNIFIED FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
<CAPTION>
                                                                                        Three Months Ended
                                                                                             March 31,
                                                                                ----------------------------------
                                                                                   1998                    1997
                                                                                ----------               ---------
<S>                                                                             <C>                      <C>
OPERATING ACTIVITIES:
--------------------
   Net income                                                                   $  278,552               $ (75,138)
   Adjustments to reconcile net income to
      Net cash provided by operating activities:
        Deferred income taxes                                                       (6,080)                 (1,154)
        Depreciation and amortization                                               72,755                  48,298
        Amortization of bond discount                                                 (222)                     --
        Unrealized gain (loss) on investments                                      (36,397)                  5,192
        Results from affiliates                                                     39,945                  14,414
          Gain (loss) on sale/disposal of fixed assets                              (5,283)                     --
        Excess of net assets of Unified Investment
          Advisors, Inc.                                                          (814,347)                     --
        Changes in assets and liabilities:
          Receivables                                                              409,608                  96,149
          Prepaid and sundry assets                                                (32,153)                  6,501
          Accounts payable and accrued expenses                                    152,305                (132,462)
          Accrued compensation and benefits                                         94,686                 (30,078)
          Payable to broker/dealers                                                 19,843                  46,392
          Accrued income taxes                                                      (8,807)                 (6,735)
          Other liabilities                                                        (97,753)                109,742
                                                                                ----------               ---------

Net cash from operating activities                                                  66,652                  81,121
                                                                                ----------               ---------

INVESTING ACTIVITIES:
--------------------
   Purchase of equipment                                                           (18,336)                (34,873)
   Proceeds from sale of fixed assets                                                9,968                      --
   Proceeds from notes receivable                                                       --                   1,262
   Investments in mutual funds                                                      56,736                      --
   Investments in debt securities                                                   70,301                      --
                                                                                ----------               ---------

Net cash from investing activities                                                 118,669                 (33,611)
                                                                                ----------               ---------

FINANCING ACTIVITIES:
--------------------
   Dividends to preferred stockholders                                             (34,418)                (34,873)
   Proceeds from issuance of common stock                                          180,000                   2,553
   Repayment of borrowing                                                           (7,680)                     --
   Borrowings bank line-of-credit                                                  229,419                      --
   Repayment of capitalized lease obligations                                      (13,784)                 10,787
                                                                                ----------               ---------

Net cash from financing activities                                                 353,537                 (42,559)
                                                                                ----------               ---------

Net increase in cash and cash equivalents                                          538,858                   4,951


                                    - 7 -
<PAGE> 8

<S>                                                                             <C>                      <C>
Cash and cash equivalents, beginning of period                                     604,068                 538,030
                                                                                ----------               ---------

Cash and cash equivalents, end of period                                        $1,142,926               $ 542,981
                                                                                ==========               =========

Supplementary information
   Interest paid                                                                $    8,923               $   1,317
                                                                                ==========               =========
   Income taxes paid                                                            $    8,807               $   4,500
                                                                                ==========               =========

See notes to consolidated financial statements.
</TABLE>


                                    - 8 -
<PAGE> 9

UNIFIED FINANCIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)

1.    BASIS OF PRESENTATION

            The accompanying consolidated financial statements include the
      accounts of Unified Financial Services, Inc., a Delaware corporation
      ("Unified" or the "Company"), and its subsidiaries:  Unified Management
      Corporation, Unified Funds Services, Inc., Health Financial, Inc.,
      First Lexington Trust Company, Resource Benefit Planners, Inc., Unified
      Investment Advisers, Inc. and Unified Internet Services, Inc.  Unless
      the context otherwise indicates, references to "Unified" or  the
      "Company" include Unified and its subsidiaries.

            Unified Management Corporation ("Management"), an Indiana
      corporation, is a registered broker dealer under the Securities
      Exchange Act of 1934, as amended, and is a member of the National
      Association of Securities Dealers, Inc.

            Unified Funds Services, Inc. ("Services"), an Indiana
      corporation, is a registered investment adviser under the Investment
      Advisers Act of 1940, as amended, and provides investment advisory,
      transfer agent, dividend disbursing, transfer agency system software
      licensing and fund accounting services to investment companies.

            Health Financial, Inc. ("Health"), a Kentucky corporation, is an
      investment advisory business providing services to trusts, retirement
      plans, business and individuals located primarily in Kentucky.

            First Lexington Trust Company ("Lexington"), a Kentucky
      corporation, is a non-bank affiliated trust company that is regulated
      by the Department of Financial Institutions, Commonwealth of Kentucky.
      Lexington received its trust charter in March of 1994.

            On March 10, 1998, the Company acquired Resource Benefit
      Planners, Inc. ("Resource Benefit Planners").  Resource Benefit
      Planners, a Kentucky corporation, is a professional services firm that
      provides consulting, recordkeeping and trust accounting services for
      qualified retirement and cafeteria plans.  The Company issued 12,000
      shares of common stock, $0.01 par value, of the Company ("Common
      Stock") in exchange for all the outstanding common stock of Resource
      Benefit Planners.  As of March 10, 1998, Resource Benefit Planners
      reported total assets of $282,724 and shareholder's equity of $37,543.

            On March 31, 1998, Unified Investment Advisers, Inc. ("Advisers")
      became a wholly owned subsidiary of the Company upon surrender to
      Advisers by all stockholders of Advisers (other than the Company) of
      their capital stock of Advisers.  The stock surrender occurred upon
      approval by the stockholders of the Unified family of mutual funds and
      upon receipt of the required regulatory approval.  As of March 31,
      1998, Advisers reported total assets of $617,773 and shareholders'
      equity of $(469,548).

            In March 1998, the Company formed Unified Internet Services, Inc.
      ("Unified Internet Services"), an Indiana corporation, to develop the
      Company's website, website television programming and its proprietary
      search engine for the financial services industry.  It currently is
      anticipated that Unified Internet Services will develop the Company's
      other industry-related


                                    - 9 -
<PAGE> 10

      internet products, including an interactive "switch" that will allow
      consumers access to the Company's products via their television, cable
      and satellite stations.  The anticipated development is expected to be
      completed by the end of 1999.

            The unaudited interim financial statements of the Company have
      been prepared in accordance with generally accepted accounting
      principles and with the instructions to Form 10-QSB and Article 10 of
      Regulation S-X.  Accordingly, they do not include all of the
      information and footnotes required by generally accepted accounting
      principles for complete financial statements.  In the opinion of
      management, all adjustments considered necessary for a fair
      presentation of the unaudited interim consolidated financial statements
      have been included herein and are of a normal recurring nature.  The
      1998 consolidated financial statements of the Company give effect to
      the acquisition by the Company of Resource Benefit Planners on March
      10, 1998, which transaction was accounted for under the pooling-of-
      interest method of accounting.  Due to the immateriality of the
      financial condition and results of operations of Resource Benefit
      Planners to the Company, the consolidated financial statements of the
      Company as of and for the three years ended December 31, 1997 have not
      been restated to give effect to the acquisition of Resource Benefit
      Planners.  The results of operations of Resource Benefit Planners have
      been included in the Company's consolidated financial statements since
      January 1, 1998.  The results of operations for the three months ended
      March 31, 1998 are not necessarily indicative of the results that may
      be obtained for the full year ending December 31, 1998.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Basis of Presentation

            The consolidated financial statements include the accounts of the
      Company, Management, Services, Health, Lexington, Resource Benefit
      Planners, Advisers and Unified Internet Services.  All intercompany
      transactions and balances between the Company and its subsidiaries have
      been eliminated.

            Effective March 10, 1998, the Company acquired Resource Benefit
      Planners in a transaction accounted for under the pooling-of-interests
      method of accounting. Due to the immateriality of the financial
      condition and results of operations of Resource Benefit Planners to the
      Company, the consolidated financial statements of the Company as of and
      for the three years ended December 31, 1997 have not been restated to
      give effect to the acquisition of Resource Benefit Planners. The
      results of operations of Resource Benefit Planners have been included
      in the Company's consolidated financial statements since January 1,
      1998.  In connection with such acquisition, the Company issued 12,000
      shares of Common Stock.

            Effective March 31, 1998, Advisers became a wholly owned
      subsidiary of the Company upon surrender to Advisers of all the capital
      stock of Advisers by all stockholders of Advisers (other than the
      Company).  Prior to the surrender of capital stock to Advisers, the
      Company accounted for its 33.3% ownership in Advisers on the equity
      method of accounting.  Advisers reported gross revenue for the four
      months (Advisers' fiscal year end is November 30) ended March 31, 1998
      of $146,519 and loss for the period of $195,967.  Advisers reported
      total assets as of March 31, 1998 of $617,773 and shareholders' equity
      of $(469,548).


                                    - 10 -
<PAGE> 11

      Fees and Commissions

            The Company records revenue on the accrual basis of accounting.
      For the brokerage operations, commissions and clearing revenue are
      recorded on the settlement date of the related security transactions.
      This does not materially differ from recording commissions based upon
      the trade date.  The investment advisory business revenue, as well as
      the investment adviser fees earned by third party advisors, is recorded
      on the accrual basis.  The fees earned by the operation and paid to the
      sub-advisors are based on established fee schedules and contracts.
      Generally, fees may be collected from the invested assets.  Thus,
      collection of the fees is reasonably certain.  The fund services
      operation provides administrative and investment services to investment
      companies and separate accounts.  Revenue is recorded as it is earned
      per month based upon accounts and account balances.  In connection with
      this, the Company earns income on the accounts established to transfer
      these funds for customers.

      Property and Equipment

            The property and equipment is stated at cost.  Depreciation,
      including the depreciation of capital leased equipment, is computed on
      the straight-line or using accelerated methods over the estimated
      useful lives of the assets for financial statement purposes.

      Investments and Investment in Debt Securities

            Investments, which consists primarily of an investment in a
      mutual fund (affiliated or non-affiliated), are recorded and adjusted
      to the fair market value as of the date of the financial statements and
      reported on the statement of operations as unrealized gain or loss on
      securities.  Investment in debt securities are recorded at cost and
      amortized over the period to maturity for the premium or discount from
      par value under generally accepted accounting principles.  Lexington is
      required by the Kentucky Department of Financial Institutions to
      maintain a minimum of $800,000 capital as long as trust assets under
      management do not exceed $100,000,000.  When trust assets under
      management exceed $100,000,000, the capital requirement will be
      increased by $350,000.  Currently, Lexington has approximately
      $55,000,000 of trust assets under management.

      Income Taxes

            The Company files consolidated federal and state income tax
      returns with its subsidiaries.  Resource Benefit Planners, prior to its
      acquisition by the Company, filed as an S-corporation.  Therefore,
      federal and state taxable income and losses were passed through to its
      stockholders.  Subsequent to its acquisition by the Company, Resource
      Benefit Planners will be included in the consolidated tax returns of
      the Company, which uses the accrual method of tax and accounting
      reporting.

            The Company has adopted Statement of Financial Accounting
      Standards No. 109, Accounting for Income Taxes ("SFAS 109").  SFAS 109
      requires use of the liability method of accounting for deferred income
      taxes.


                                    - 11 -
<PAGE> 12

      Use of Estimates

            The presentation of financial statements in conformity with
      generally accepted accounting principles requires management to make
      estimates and assumptions that affect the reported amounts of assets
      and liabilities and disclosure of contingent assets and liabilities at
      the date of the financial statements and the reported amounts of
      revenues and expenses during the reporting period.  Actual results
      could differ from those estimates.

      Statements of Cash Flows

            For purposes of the statements of cash flows, the Company
      considers all liquid investments with an original maturity of three
      months or less to be cash equivalents.  The Company maintains money
      market investments that are not insured by the Federal Deposit
      Insurance Corporation (the "FDIC") and bank accounts that periodically
      exceed the FDIC insurance limit during the year.

      Financial Statement Presentation

            Certain amounts in the 1997 financial statements have been
      reclassified to conform to the 1998 presentation.

3.    OPTIONS

            On February 25, 1998, the Company adopted, subject to approval by
      the stockholders of the Company, the Unified Financial Services, Inc.
      1998 Stock Incentive Plan (the "Plan") which provides for the granting
      of stock options and other stock-based awards.  The total number of
      shares of Common Stock issuable under the Plan is not to exceed
      1,500,000 shares, subject to adjustment in the event of any change in
      the outstanding shares of such stock by reason of a stock dividend,
      stock split, capitalization, merger, consolidation or other similar
      change generally affecting stockholders of the Company.  Of these
      1,500,000 shares of stock, no more than 250,000 shares may be issued to
      participants in the Plan in any plan year.

            Under the terms of the Plan, employees, directors, advisors and
      consultants of the Company and its subsidiaries will be eligible to
      receive: (a) Incentive Stock Options; (b) Nonqualified Stock Options;
      (c) Stock appreciation Rights ("SAR");  (d) Restricted Stock; (e)
      Restricted Stock Units; and/or (f) Performance Awards.  As of March 31,
      1998, no awards had been made pursuant to the Plan.

4.    FINANCING

            The Company obtained a line of credit financing totaling a
      maximum borrowing capacity of five hundred thousand dollars ($500,000)
      for the purpose of purchasing various communication and computer
      hardware and software to support future operating needs.  As of March
      31, 1998, the amount outstanding under this credit financing was
      $344,616.  The financing converts to a four-year term loan payable in
      equal monthly principal payments plus interest at 0.5% above bank prime
      rate.  Property, supplies, inventory and intangible assets of the
      Company are security for this financing.


                                    - 12 -
<PAGE> 13

5.    COMMITMENTS AND CONTINGENCY

            The Company, through its subsidiary, Management, leases its
      corporate headquarters and administrative office facilities located at
      431 North Pennsylvania Street, Indianapolis, Indiana, which facility
      has approximately 10,820 square feet, and is leased pursuant to an
      operating lease expiring in 2007.  The lease includes provisions for
      adjustment of operating costs and real estate taxes.  Such obligations
      are allocated between the Company and Management based on estimated
      usage.  The Company also maintains administrative offices at the
      corporate offices of Lexington, Health and Resource Benefit Planners,
      each of which is located at 2353 Alexandria Drive, Suite 100,
      Lexington, Kentucky.

            The aggregate minimum rental commitments required under operating
      leases for office space and equipment at March 31, 1998 were as
      follows:

<TABLE>
<CAPTION>
        For the Twelve Months Ended
                  March 31                    Amount
        ---------------------------         ----------
<C>                                         <C>
                  1999                      $  297,270
                  2000                         254,551
                  2001                         254,551
                  2002                         216,322
                  Thereafter                 1,281,629
                                            ----------
                     Total                  $2,304,323
                                            ==========
</TABLE>

            Total rental expense was $70,019 and $49,358 for the three months
      ended March 31, 1998 and 1997, respectively.

6.    CAPITALIZED LEASE OBLIGATIONS

            The Company's capitalized lease obligations are payable over a
      36-month period.  The following is a summary of future minimum lease
      payments under capitalized lease obligations as of March 31, 1998:

<TABLE>
<CAPTION>
        For the Twelve Months Ended
                  March 31                                    Amount
        ---------------------------                           -------
<C>                                                           <C>
                  1999                                        $25,618
                  2000                                         16,559
                                                              -------
                     Total                                     42,177

                     Less amount representing interest          4,497
                                                              -------

                  Net present value                           $37,680
                                                              =======
</TABLE>

            The Company did not acquire any capital lease obligations during
      the three months ended March 31, 1998 and 1997.


                                    - 13 -
<PAGE> 14

7.    CASH SEGREGATED UNDER FEDERAL REGULATION AND NET CAPITAL REQUIREMENTS
      FOR UNIFIED MANAGEMENT CORPORATION

            Pursuant to Rule 15c3-3 as promulgated by the Securities and
      Exchange Commission (the "SEC"), the Company calculates its reserve
      requirement and segregates cash and/or securities for the exclusive
      benefit of its customers on a periodic basis.  The reserve requirement
      calculated by the Company was $0 at March 31, 1998.  Balances
      segregated in excess of reserve requirements are not restricted.

            The Company is subject to the SEC's Uniform Net Capital Rule
      ("Rule 15c3-1"), which requires the maintenance of minimum net capital,
      as defined, of 6-2/3% of aggregate indebtedness or $50,000, whichever
      is greater, and a ratio of aggregate indebtedness to net capital of not
      more than 15 to 1.  At March 31, 1998, the Company had net capital of
      $304,585, which was in excess of its required net capital of $50,000,
      and a net capital ratio of 1.09 to 1 at March 31, 1998.

8.    COMMON AND PREFERRED STOCK

      Common Stock:

      Acquisition of Resource Benefit Planners, Inc.

            The Company has 10,000,000 authorized shares of Common Stock.  In
      connection with the acquisition of Resource Benefit Planners on March
      10, 1998, the Company issued 12,000 shares of Common Stock as reflected
      in Note 1 of the notes to the financial statements.

      Private Placement Offering

            Effective January 22, 1998, the Company commenced a private
      placement offering to sell a maximum of 600,000 shares of Common Stock.
      The first 400,000 shares offered are offered at a price of $25.00 per
      share and, upon acceptance by the Company of subscriptions for such
      400,000 shares, the remaining 200,000 shares will be offered at a price
      of $27.50 per share.  All of the shares of Common Stock offered in the
      private placement are being sold by the Company on a best efforts
      basis.  There is no public market for any securities of the Company.
      There can be no assurance that a market will develop in the future.
      The offering will terminate on the earlier occurrence of: (i)
      subscriptions of 600,000 shares of Common Stock having been accepted;
      or (ii) June 30, 1998.

            As of March 31, 1998, the Company had accepted subscriptions for
      7,200 shares of Common Stock pursuant to the private placement.


                                    - 14 -
<PAGE> 15

      Preferred Stock:

            As of March 31, 1998, the total preferred shares authorized for
      the Company was 1,000,000 with a par value of $0.01 per share of which
      22,100 shares were designated as follows:

<TABLE>
<CAPTION>
                                                               Shares
                                                Shares       issued and        Stated          Par
                                              Designated     outstanding       value          value
                                              ----------     -----------       -----          -----
<S>                                             <C>             <C>             <C>           <C>
      Preferred Stock Series A                  10,000          8,486           $100          $0.01
      Preferred Stock Series B                  10,000          8,583            100           0.01
      Preferred Stock Series C                   2,100             --            100           0.01
</TABLE>

            On August 1, 1997, the Board designated 2,100 shares of the
      Preferred Stock of the Company as Series C 6.75% Cumulative Convertible
      Preferred Stock.

9.    SUBSEQUENT EVENT

      Series A and Series B Preferred Stock Redemption:

            On February 20, 1998, the Board of Directors approved the
      redemption of the outstanding Series A and Series B Preferred Stock of
      the Company, effective as of April 25, 1998.  Total consideration of
      $1,738,326, consisting of principal and accrued interest, was paid to
      the holders of the Series A and Series B Preferred Stock in connection
      with the redemption of such shares.

      Series C Preferred Stock Issuance:

            In May 1998, the Company issued 2,100 shares of Series C 6.75%
      Cumulative Preferred Stock to certain directors, executive officers and
      agents of the Company for total consideration of $210,000.  Each share
      of Series C Preferred Stock is convertible, at any time at the option
      of the holder thereof and without the payment of any additional
      consideration with respect thereto, into 135 shares of Common Stock.

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

Overview

      The Company was organized December 7, 1989.  As of March 31, 1998,
Unified owned all of the capital stock of Management, Indianapolis, Indiana,
a licensed National Association of Securities Dealers, Inc. and registered
broker-dealer, Services, Indianapolis, Indiana, a registered investment
adviser and transfer agent, Health, Lexington, Kentucky, a registered
investment adviser, Lexington, Lexington, Kentucky, a non-bank affiliated
trust company that is regulated by the Department of Financial Institutions,
Commonwealth of Kentucky,  Unified Internet Services, Indianapolis, Indiana,
an internet services company, Resource Benefit Planners, Lexington, Kentucky,
a professional services firm, Advisers, a mutual fund advisory firm, HFI
Acquisition Corporation, a Kentucky corporation ("HFAC"), and VAI Acquisition
Corporation, a Delaware corporation ("VAC").  Each of HFAC and VAC currently
does not conduct any operations.  Reference in this filing to the "Company"
or "Unified" includes Unified and its wholly owned subsidiaries.


                                    - 15 -
<PAGE> 16

      The Company provides management services, working capital and equipment
for its wholly owned financial services subsidiaries.  The Company's
principal business is providing for its subsidiaries a platform for attaining
and maintaining vertical integration in the financial services industry by
means of an aggressive merger and acquisition program featuring stock-for-stock
pooling of interests transactions and providing management services and
equipment for its wholly owned subsidiaries, which, in turn, concentrate
their services over the following lines of business in the financial services
industry: mutual fund services, including transfer agency, shareholder and
administrative services, fund accounting, compliance and distribution;
brokerage and securities services, including third-party introduced clearing
services; investment advisory and asset management services for various asset
management categories and objectives; tax-free reorganizations, consolidations
and start-ups of small mutual funds; certain non-bank custodial services; trust
and retirement services; qualified plan services, including plan participant
education; internal and external proprietary product and systems development for
the mutual fund industry; asset allocation services; and financial services
institutions, predominately mutual funds, including the Unified Funds, a family
of four no-loan mutual funds sponsored by Advisers.

      The following presents management's discussion and analysis of the
Company's consolidated financial condition and results of operations as of
the dates and for the periods indicated. This discussion should be read in
conjunction with the other information set forth in this quarterly report on
Form 10-QSB, including the Company's unaudited, consolidated financial
statements and accompanying notes thereto.

Comparison of Results for the Three Months Ended March 31, 1998 and 1997

      Total revenue for the three months ended March 31, 1998 increased
$470,247, or 29.9%, as compared to the same period of 1997.  For such
periods, revenue from investment advisory and trust and administration
services increased 132% from $424,582 to $984,960.  The increase in these
revenues was due to the growth in assets under management.  Software and
programming and fund services revenue were partially offset by the increase
in brokerage revenue.

      Gross profit of $1,474,401 for the three months ended March 31, 1998
increased $371,158, or 33.6%, as compared to the same period of 1997.  For
such periods, gross profit as a percentage of revenue increased to 72.2% from
70.2%.  Investment advisory and trust and administration gross profit
percentage improvements more than offset the slightly higher increase in
brokerage revenue charges.

      Expenses for the three months ended March 31, 1998 as compared to the
same period of 1997 increased 4.6% from $1,154,500 to $1,208,146, respectively.
For such periods, as a percentage of total revenue, expenses decreased from
73.4% to 59.1%, primarily due to the increase in revenue coupled with lower
employee compensation expense and fund services operating charges, which were
partially offset by an increase in other expenses.

      The increase in the securities market is reflected in the improvement
of other income from the gain on unrealized and realized security transactions
more than offsetting Unified's portion of the loss at Advisers through March 31,
1998.

      Net income for the first quarter of 1998 was $278,612, which compares
favorably to the loss of $75,138 during the first quarter of 1997.  Such
improvement was a result of the increased assets under management which
resulted in higher revenue, lower cost of sales, expenses, which are relatively
fixed, and the growth in the stock market during the first quarter of 1998.


                                    - 16 -
<PAGE> 17

Liquidity and Capital Resources

      The Company's primary sources of liquidity historically has been and
continues to be cash flow from operating activities, available borrowing
capacity from capitalized leases and a loan from a regional bank to finance
capital equipment.  The net increase in cash and cash equivalents during the
first quarter of 1998 from year end 1997 was $538,858.  The principal
increase reflects bank borrowing for equipment of $229,419 and private
placement proceeds received as of March 31, 1998 of $180,000.

      The Company is attempting to raise approximately $15.5 million of
additional capital through a private placement offering.  On April 25, 1998,
the Company utilized approximately $1.7 million of such proceeds from the
private placement to redeem the outstanding shares of Series A and Series B
Preferred Stock.  Pending usage, the Company may invest the net proceeds in
its own no-load mutual fund portfolios.  As of May 7, 1998, the Company had
accepted subscriptions for 236,324 shares of Common Stock, for total
consideration of $5,908,100.

                                   *   *   *

      The forward-looking statements contained in this report are inherently
subject to risks and uncertainties.  The Company's actual results could
differ materially from those in the forward-looking statements.  Potential
risks and uncertainties include a number of factors, including the Company's
ability to manage rapid growth, economic conditions generally and in
particular those affecting bond and securities markets.  An increase in
federal and state regulation of the mutual fund industry or the imposition of
regulatory penalties also could have an effect on operating results of the
Company.

PART II.    OTHER INFORMATION

Item 3.     Changes in Securities and Use of Proceeds

      For the three months ended March 31, 1998, the only sales of the
Company's securities were: (i) 12,000 shares of Common Stock issued in
connection with the acquisition of Resource Benefit Planners (such shares
were issued in exchange for all the outstanding capital stock of Resource
Benefit Planners); and (ii) 7,200 shares of Common Stock issued by the
Company in connection with a private offering of up to 600,000 shares of
Common Stock, at an offering price of $25.00 per share.  All shares of stock
issued by the Company during such period were issued pursuant to the
exemption provided by Rule 506, as promulgated by the Commission.

Item 4.     Submission of Matters to a Vote of Securityholders

      Not applicable.

Item 6.     Exhibits and Reports on Form 8-K

(a)   Exhibits:  See Exhibit Index on page 19 hereof.
      --------

(b)   Reports on Form 8-K:  On January 14, 1998 and January 29, 1998, the
      -------------------
Company filed Current Reports on Form 8-K to report the acquisition by
the Company of Lexington and the name change of the Company to "Unified
Financial Services, Inc." from "Unified Holdings, Inc.," respectively.
In connection with the acquisition of Lexington on December 31, 1998, the
Company issued 80,008 shares of Common Stock in exchange for all
the outstanding capital stock of First Lexington.  The name change of
the Company was effective January 23, 1998.


                                    - 17 -
<PAGE> 18

                                SIGNATURE

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



                                    UNIFIED FINANCIAL SERVICES, INC
                                        (Registrant)



Dated: May 11, 1998                 By: /s/  Timothy L. Ashburn
                                        ----------------------------------------
                                        Timothy L. Ashburn
                                        Chairman, President and Chief Executive
                                        Officer





                                    - 18 -
<PAGE> 19

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

Exhibit No.             Description
-----------             -----------

11.1                    Computation of Net Income Per Common Share.

27.1                    Financial Data Schedule (March 31, 1998).

27.2                    Restated Financial Data Schedule (March 31, 1997).


                                    - 19 -