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 September 30, 2006

                         Commission File Number: 1-16349

                        INVESTORS CAPITAL HOLDINGS, LTD.
             (Exact name of registrant as specified in its charter)

                MASSACHUSETTS                              04-3284631
        (State or other jurisdiction of                 (I.R.S. Employer
         incorporation or organization)                 Identification No.)


                                 230 Broadway E.
                         Lynnfield, Massachusetts 01940
                    (Address of principal executive offices)

                                 781-477-4700
              (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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).     Yes [ ]         No [X]

Number of shares outstanding of our only class of common stock as of November
13, 2006:

6,151,512

<PAGE>

                                Table of Contents


PART I

--------------------------------------------------------------------------------
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 4. CONTROLS AND PROCEDURES

PART II

--------------------------------------------------------------------------------
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ITEM 6. EXHIBITS
SIGNATURES


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

<PAGE>

                          PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

               INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)

                                              Sept 30,       March 31,
                                                 2006            2006
                                       --------------- ---------------
Assets

Current Assets

Cash and cash equivalents              $    4,787,037  $    7,718,682
Deposit with clearing organization,
 restricted                                   175,000         175,000
Accounts receivable                         3,482,037       4,163,658
Note receivable-sale of asset (current)         8,618           8,561
Loans receivable from registered
 representatives(current)                     466,349         379,222
Prepaid income taxes                          168,045               -
Marketable securities, at market value         88,580          73,702
Investments(short term)                     1,234,486
Prepaid expenses                              225,298         261,888

                                       --------------- ---------------
                                           10,635,450      12,780,713

Property and equipment, net                 1,036,043         772,498

Long Term Investments
Loans receivable from registered
 representatives                              198,891         223,019
Note Receivable-sale of asset                 747,617         747,617
Equity Investments,at cost                    190,000         190,000
Investments(long term)                        911,391         159,150
Cash surrender value life insurance
 policies                                     233,246         181,872
                                       --------------- ---------------
                                            2,281,145       1,501,658
Other Assets
Other assets                                   41,291          22,644
Deferred tax asset, net                       603,934         248,314
                                       --------------- ---------------
                                              645,225         270,958

TOTAL ASSETS                           $   14,597,863  $   15,325,827
                                       =============== ===============

Liabilities and Stockholders' Equity

Current Liabilities

Accounts payable                       $    1,292,771  $    1,210,086
Accrued expenses                              690,013         648,298
Notes payable                                  12,064          94,573
Unearned revenues                             103,551         104,779
Commissions payable                         2,162,821       2,432,596
Income taxes payable                                -         198,026
Securities sold, not yet purchased,
at market value                                   643          51,386

                                       --------------- ---------------
                                            4,261,863       4,739,744
Long-Term Liabilities

Total Liabilities                           4,261,863       4,739,744
                                       --------------- ---------------

Stockholders' Equity:

Common stock, $.01 par value,
 10,000,000 shares authorized;
 6,139,685 issued and 6,135,800
 outstanding at September 30, 2006;
 5,794,246 issued and 5,790,361
 outstanding at March 31, 2006.                61,397          57,942
Additional paid-in capital                  9,497,156       8,740,780
Retained earnings                             785,114       1,797,789
less: Treasury stock, 3,885
 shares at cost                               (30,135)        (30,135)
Accumulated other comprehensive income         22,468          19,707

                                       --------------- ---------------
Total stockholders' equity                 10,336,000      10,586,083

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY                                 $   14,597,863  $   15,325,827
                                       =============== ===============

            See Notes to Condensed Consolidated Financial Statements.
<PAGE>

                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
                                   (UNAUDITED)

                                                 2006            2005

Revenue:

   Commissions                         $   15,289,438  $   14,359,466
   Advisory Fees                            1,444,068       1,299,799
   Other Fee Income                           129,635          98,440
   Interest, dividend and investment          188,245         178,230
   Marketing revenue                          204,533         234,310
                                       --------------- ---------------
Total Revenue                              17,255,919      16,170,245

Commission and Advisory Fee Expenses       14,140,325      13,308,430
                                       --------------- ---------------
Gross Profit                                3,115,594       2,861,815

Operating Expenses:

   Advertising                                231,797         182,056
   Communications                             134,633         145,926
   Compensation and benefits                1,710,572       1,383,911
   Regulatory, legal and professional         730,702         875,714
   Occupancy                                  231,503         169,891
   Other administrative                       156,296         185,331
                                       --------------- ---------------
Total Operating Expenses                    3,195,503       2,942,829

Operating Loss                                (79,909)        (81,014)

Interest Expense                                7,570          15,517
                                       --------------- ---------------
Net Loss Before Taxes                         (87,479)        (96,531)

(Provision) Benefit for Income Taxes          (82,356)         53,695
                                       --------------- ---------------
Net Loss                               $     (169,835) $      (42,836)
                                       =============== ===============

Earnings per common share:

Basic earnings per common share        $        (0.03) $        (0.01)

Diluted earnings per common share      $        (0.03) $        (0.01)

Share data:

Weighted average shares used in basic
 earnings per common share calculations     6,116,869       5,755,140

Incremental shares from assumed
 exercise of stock options                    162,814         159,947

Weighted average shares used in diluted
 earnings per common share calculations     6,279,683       5,915,087

            See Notes to Condensed Consolidated Financial Statements.
<PAGE>

                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  SIX MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

                                            2006            2005

Revenue:

   Commissions                         $   32,748,340  $   27,727,533
   Advisory Fees                            3,012,497       2,455,781
   Other Fee Income                           196,032         201,878
   Interest, dividend and investment          372,275         308,754
   Marketing revenue                          528,947         669,534
                                       --------------- ---------------
Total Revenue                              36,858,091      31,363,480

Commission and Advisory Fee Expenses       29,955,545      25,290,712
                                       --------------- ---------------
Gross Profit                                6,902,546       6,072,768

Operating Expenses:

   Advertising                                501,424         424,663
   Communications                             200,401         301,434
   Compensation and benefits                4,426,597       3,119,039
   Regulatory, legal and professional       1,933,042       1,348,858
   Occupancy                                  465,509         323,982
   Other administrative                       488,899         428,839
                                       --------------- ---------------
Total Operating Expenses                    8,015,872       5,946,815

Operating (Loss) Income                    (1,113,326)        125,953

   Interest Expense                            15,602          18,851
                                       --------------- ---------------
Net (Loss) Income Before Taxes             (1,128,928)        107,103

Benefit (Provision) for Income Taxes          361,471         (42,713)
                                       --------------- ---------------
Net(Loss) income                       $     (767,457) $       64,390
                                       =============== ===============
Earnings per common share:

Basic Earnings per common share        $        (0.13) $         0.01

Diluted Earnings Per Share             $        (0.13) $         0.01
Share data:
Weighted average shares used in basic
 earnings per common share calculations     5,874,301       5,754,581

Incremental shares from assumed
 exercise of stock options                    153,177         166,846

Weighted average shares used in diluted     6,027,478       5,921,427
 earnings per common share calculations

            See Notes to Condensed Consolidated Financial Statements.
<PAGE>

               INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  SIX MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
                                   (UNAUDITED)
<TABLE>
<CAPTION>
<S>              <C> <C>  <C>         <C>      <C>                      <C>         <C>                     <C>
                           Common     Amount   Additional Comprehensive  Retained   Treasury   Accumulated
                            Stock               Paid-In      Income      Earnings    Stock        Other
                           Shares               Capital                 (Deficit)             Comprehensive    Total
                                                                                              Income (Loss)
                         -----------------------------------------------------------------------------------------------
Balance at April 01, 2005 5,757,348   $57,573  $8,691,566            -  $1,463,779  $(30,135)             - $10,182,783

Stock based compensation      1,833        19      15,261                                                        15,280

Comprehensive income:
 Net income                                                     64,390      64,390
Other Comprehensive
 Income:
 Unrealized gain on
  securities:
   Unrealized holding
    gains arising during
    period no tax effect                                             -
                                                          -------------

No reclassification
 adjustment required                                                 -
                                                          -------------                      ---------------

                                                          -------------
Other Comprehensive
 Income                                                              -                                    -
                                                          -------------                      ---------------

                                                          -------------
   Comprehensive Income                                         64,390                                           64,390
                                                          =============
   Dividend payment to
    shareholders                                                          (115,629)                            (115,629)
                                                          -------------                      ---------------
Balance at
 September 30, 2005       5,759,181   $57,592  $8,706,827            -  $1,412,540  $(30,135)             - $10,146,824
                         ===============================================================================================

Balance at April 01, 2006 5,794,246   $57,942  $8,740,780            -  $1,797,789  $(30,135)       $19,707 $10,586,083

Stock based compensation    345,439     3,455     756,376                                                       759,831

Comprehensive income:
   Net (loss)                                                 (767,457)   (767,457)

Other Comprehensive
 Income:
 Unrealized gain on
  securities:
   Unrealized holding                                            2,761
    gains arising during
    period no tax effect

No reclassification
 adjustment required                                                 -
                                                          -------------
                                                                                             ---------------
Other Comprehensive
 Income                                                          2,761                                2,761
                                                          =============                      ---------------

                                                          -------------
   Comprehensive Income                                       (764,696)                                        (764,696)
                                                          =============
   Dividend payment to
    shareholders                                                          (245,218)                            (245,218)

                         -----------------------------------------------------------------------------------------------
Balance at
 September 30, 2006       6,139,685   $61,397  $9,497,156            -    $785,114  $(30,135)       $22,468 $10,336,000
                         ===============================================================================================
</TABLE>

           See Notes to Condensed Consolidated Financial Statements.
<PAGE>

               INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                  SIX MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
                                  (UNAUDITED)

                                            2006            2005
                                       --------------- ---------------
Cash flows from operating activities:

Net (loss) income                      $     (767,457) $       64,390
Adjustments to reconcile net (loss)
 income to net cash
provided by (used in) operating
 activities:
  Depreciation and amortization               135,050         104,096
  Change in deferred taxes                   (355,620)         (1,271)
  Stock Based Compensation                    662,144               0
  Cash surrender value life insurance
   policy                                     (51,374)        (33,752)
  Stock option compensation                    75,033          11,614
  Change in marketable securities             (65,621)       (329,145)
  Loss on investment                             (199)         (3,468)
   Increase in accounts receivable-
   asset held for sale                              0        (389,567)
  Change in operating assets and
   liabilities:
      Decrease in accounts receivable         681,621         516,252
      Decrease in prepaid expenses and
       other assets                            17,943          15,417
      Increase in prepaid income taxes
       and payable                           (366,071)       (176,816)
      Increase (decrease) in accounts
       payable                                 82,685        (265,647)
      Increase (decrease) in accrued
       expenses                                41,715        (188,718)
      (Decrease) increase in
       commissions payable                   (269,775)        367,329
      (Decrease)in unearned revenues           (1,228)        (22,823)
                                       --------------- ---------------

         Net cash used in operating
          activities                         (181,154)       (332,109)
                                       --------------- ---------------

Cash flows from investing activities:

Purchases of property and equipment          (398,595)       (222,073)
Changes in Note Receivable                        (57)              0
Loans receivable from registered
 representatives                              (62,999)       (253,658)
Investments in US Treasury Notes,
 Bills; etc.                               (1,983,767)              0
                                       --------------- ---------------

          Net cash used in investing
           activities                      (2,445,418)       (475,731)
                                       --------------- ---------------

           See Notes to Condensed Consolidated Financial Statements.
<PAGE>

               INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
            SIX MONTHS ENDED SEPTEMBER 30, 2006 AND 2005 (CONTINUED)

                                       Six Months Ended September 30,
                                            2006            2005
                                       --------------- ---------------
Cash flows from financing activities:

Payment of Note Payable                $      (82,509) $       (9,433)
Payment of dividends                         (245,218)       (115,629)
Exercise of stock options                      22,654           3,667
                                       --------------- ---------------

              Net cash used in
               financing activities          (305,073)       (121,395)
                                       --------------- ---------------
Net Decrease in cash and cash
 equivalents                               (2,931,645)       (929,236)

Cash and cash equivalents, beginning of
 period                                     7,718,682       8,618,261
                                       --------------- ---------------
Cash and cash equivalents, end of
 period                                $    4,787,037  $    7,689,025
                                       =============== ===============

Supplemental disclosures of cash flow
 information:

Interest paid                          $       15,602  $       18,851
Income taxes paid                      $      360,700  $      220,800

           See Notes to Condensed Consolidated Financial Statements.
<PAGE>

               INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    FOR THE QUARTER ENDED SEPTEMBER 30, 2006
                                   (UNAUDITED)


NOTE 1. ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION:

Incorporated in July 1995, Investors Capital Holdings, Ltd. ("ICH") is a holding
company whose subsidiaries assist a nationwide network of independent registered
representatives ("Representatives") in providing a diversified line of financial
services to the public including securities brokerage, investment advice, asset
management, financial planning and insurance. Our subsidiaries include the
following:

     o    Investors Capital Corporation ("ICC") provides broker-dealer services
          and investment advisory/asset management services, the latter as a
          registered investment advisor doing business as Investors Capital
          Advisors ("ICA"). As a registered broker-dealer in all 50 states, ICC
          provides services in support of the purchase and sale by
          Representatives' customers of corporate, U.S. Government and municipal
          securities and mutual funds, variable annuities and variable life
          insurance, including market information, an internet-based on-line
          trading platform, portfolio tracking and records management.

     o    Eastern Point Advisors, Inc. ("EPA") in the past was the primary
          provider of investment advisory/asset management services now being
          rendered by ICA. In addition, until October 2005 EPA served as advisor
          to two mutual funds.

          ICC Insurance Agency, Inc. was established primarily because, in
          certain states, a separately licensed insurance entity is required in
          order for ICC broker-dealer representatives to sell life insurance and
          annuity products to their clients. Accordingly, the Company
          established ICC Insurance Agency, Inc., a wholly-owned subsidiary of
          ICH that is duly licensed for such purposes in all states in which
          such licensing is required. One hundred percent of all revenue
          realized by this entity flow through as revenue to ICC.

          Investors Capital Holdings Securities Corporation ("ICH Securities")
          holds cash, cash equivalents, interest income and dividend income for
          ICH.

BASIS OF PRESENTATION:

The accompanying unaudited condensed consolidated financial statements of
Investors Capital Holdings, Ltd. and its subsidiaries (the "Company") have been
prepared in accordance with accounting principles generally accepted in the
United States of America (GAAP) for interim financial information and with the
instructions to Form 10-Q. In the opinion of management, these financial
statements contain all of the adjustments necessary for a fair presentation of
the results of these interim periods. Certain footnote disclosures normally
included in financial statements prepared in accordance with GAAP have been
condensed or omitted, although the Company believes the disclosures in these
financial statements are adequate to make the information presented not
misleading. Operating results for the three-month and six-month period ending
September 30, 2006 are not necessarily indicative of the results that may be
expected for the year ending March 31, 2007. The balance sheet at March 31, 2006
has been derived from the audited financial statements at that date, but does
not include all of the information and footnotes required by GAAP for complete
financial statements. These unaudited condensed consolidated financial
statements should be read in conjunction with the Company's annual audited
financial statements included in the Company's Form 10-K for the fiscal year
ended March 31, 2006 filed with the Securities and Exchange Commission.

USE OF ESTIMATES AND ASSUMPTIONS:

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of 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.

RECLASSIFICATIONS:

Certain amounts in the prior periods have been reclassified to remain consistent
with the current fiscal year financial statement presentation.

<PAGE>

               INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    FOR THE QUARTER ENDED SEPTEMBER 30, 2006
                                   (UNAUDITED)


SIGNIFICANT ACCOUNTING POLICIES:

Revenue Recognition

Summarized below are the Company's revenue recognition policies for the
following income item areas: Mutual Funds/Variable Annuities, Marketing Revenue
on production and for regional and national events, Administration fees on
Errors and Omissions ("E&O") and Renewals, Advisory Fees and Trading Revenue.

Mutual Funds/Variable Annuities. Mutual Funds/Variable Annuity revenue is
recognized upon receipt of commissions related to each sale, which is generally
date of settlement. The earnings process is substantially complete at the point
that the fund company distributes payment to the Company.

Trading. The Company earns commissions through stock purchase and sale
transactions, mutual fund purchases, government and corporate bond transactions,
fee-based management of investment accounts and ticket charges. The Company also
earns revenue in the form of 12b-1 fees and interest on account balances. The
earnings process is substantially complete at trade date in accordance with the
rules of the National Association of Securities Dealers ("NASD") and the
Securities and Exchange Commissions ("SEC").

The Company also receives credit for clearing charge adjustments that are netted
against any clearing charges the Company may incur for the period. These
adjustments are recognized as income in the period received, unless otherwise
noted by the clearing firm.

Unrealized gains and losses are recorded at the time that the Company reconciles
its trading positions with the market value. The unrealized gains or losses are
adjusted to market until the position is settled or the trade is cancelled.

Advisory Fees. Our managed accounts advisory fees are based on the amount of
assets managed per agreement between the Advisor and the Advisor's Client. These
revenues are recorded as and when billed, and any portion remaining uncollected
at the end of the subsequent quarter is charged against earnings at that time.

The Company ceased providing mutual funds with advisory services effective
October 18, 2005. Prior thereto, advisory fees relating to the management of
mutual funds were based on average daily net fund assets as specified in the
Company's advisory agreement and disclosed in the funds' prospectuses. These
fees were recognized monthly based on the fund Trustee's administrative fee
report detailing the amounts that were earned for the month. The Company had
elected to waive certain of these fees to allow for one of the funds to maintain
its ceiling on administrative expenses. Per agreement with the trustee of the
funds, the waived fees were subject to a three-year recovery period, at the end
of which any uncollected fees were permanently waived and, consequently, charged
against earnings. The Company's successor, as fund advisor, has agreed to pay to
the Company all such waived amounts with interest.

Administration Fees. Administration fees for services rendered to its
Representatives respecting annual NASD license renewals and E&O insurance are
recognized as revenue upon registration of the Representative with NASD and
listing of the Registered Representative with the E&O insurance carrier. The
funds received from the Registered Representative are initially recorded as
unearned revenue. The amounts, if any, collected in excess of the E & O
insurance premium and/or fees due NASD are recognized as revenue.

Marketing Revenue. Revenue from marketing associated with product sales is
recognized quarterly based on production levels. Marketing event revenues are
recognized at the commencement of the event offset by its costs.

Accounts Receivable - Allowance for Doubtful Accounts

Our policies for determining whether a receivable is considered uncollectible
are as follows;

Loans to Representatives. In accordance with SFAS No. 5, we perform periodic
credit evaluations and provide allowance based on our assessment of specifically
identified unsecured receivables and other factors, including the
Representative's payment history. Once it is determined that it is both probable
that a loan has been impaired and the amount of loss can reasonably be
estimated, the portion of the loan balance estimated to be uncollectible is so
classified and written off.

<PAGE>

                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE QUARTER ENDED SEPTEMBER 30, 2006 (UNAUDITED)

Advisory Fees from Mutual Funds. Effective October 18, 2005, the Company no
longer provides advisory services to mutual funds. Prior thereto, as disclosed
in the respective mutual funds' prospectuses, the Company attempted to recoup
waived advisory service fees within a three-year period. See "Note 1 -
Significant Accounting Policies - Revenue Recognition - Advisory Fees," above,
for an explanation of such fee waivers. If management believed that the
likelihood of collecting a waived receivable within the three-year period was
doubtful, the Company provided for an allowance in accordance with SFAS No. 5.
Determinations whether to write off such fees were made annually. By agreement,
the Company is entitled to payment of all uncollected waived advisory fees by
its successor as fund advisor.

Advisory Fees on Asset Managed Accounts. Uncollected balances are written off
before the subsequent quarter billing.

Trade Receivables. As prescribed by the SEC, trade receivables usually settle
within three days. If a trade error results, the Company will pursue remedies to
collect on the trade error. The Company does not record a receivable resulting
from a trade error that is in litigation or whose outcome is otherwise not
reasonably determinable. In such a case, the Company applies any proceeds from
settlements or insurance against any trade losses incurred.

Income Taxes

The Company provides for income taxes at the end of each interim period based on
the estimated effective tax rate for the full fiscal year. Cumulative
adjustments to the tax provision are recorded in the interim period in which a
change in the estimated annual effective rate is determined.

RECENTLY ISSUED ACCOUNTING STANDARDS:

In June 2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty
in Income Taxes" (FIN 48), which clarifies the accounting for uncertainty in
income taxes recognized in an enterprise's financial statements in accordance
with SFAS No. 109, "Accounting for Income Taxes." FIN 48 establishes a
recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a
tax return. This interpretation also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods,
disclosure, and transition. FIN 48 is effective for fiscal years beginning after
December 15, 2006. The Company is currently evaluating the impact the adoption
of this interpretation will have on its consolidated financial statements.

In June 2006, the Emerging Issues Task Force issued EITF 06-5, "Accounting for
Purchases of Life Insurance - Determining the Amount That Could Be Realized in
Accordance with FASB Technical Bulletin No. 85-4, Accounting for Purchases of
Life Insurance". This EITF discusses whether a policyholder should consider any
additional amounts included in the contractual terms of the insurance policy
other than the cash surrender value in determining the amount that could be
realized under the insurance contract in accordance with Technical Bulletin 85-4
and whether a policyholder should consider the contractual ability to surrender
all of the individual-life policies (or certificates in a group policy) at the
same time in determining the amount that could be realized under the insurance
contract in accordance with Technical Bulletin 85-4. The Task Force reached a
tentative conclusion that EITF 06-5 should be effective for fiscal years
beginning after December 15, 2006 The Company is currently evaluating the
impact, if any, of EITF 06-5 on its consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." This
new standard provides guidance for using fair value to measure assets and
liabilities. The FASB believes SFAS No. 157 also responds to investors' requests
for expanded information about the extent to which companies measure assets and
liabilities at fair value, the information used to measure fair value, and the
effect of fair value measurements on earnings. SFAS No. 157 applies whenever
other standards require (or permit) assets or liabilities to be measured at fair
value but does not expand the use of fair value in any new circumstances. SFAS
No. 157 will become effective for the Company as of January 1, 2008. The Company
is continuing to evaluate the provisions of this standard and is not certain of
the potential impact at this time.

NOTE 2. SEGMENT INFORMATION

The accounting policies of the segments are described in the summary of
significant accounting policies. The Company evaluates performance based on
profit and loss from operations after income taxes.

The Company accounts for inter-segment services and transfers as if the services
or transfers were to third parties, that is, at current market prices. The
Company's reportable segments are strategic business units that offer different
services. They are managed separately because each business requires different
technology and marketing strategies.

The Company's reportable segments include investment services offered through
ICC and asset management services offered through ICA, including securities,
insurance, financial planning and related services. ICC earns commissions as a
broker for its customers in the purchase and sale of securities on major
exchanges. Asset management services generate recurring annual revenue from fees
received on the management of customer accounts.

EPA had provided money management services to a variety of investors (See Part
1. Item 1 of March 31, 2006 10-K "Investment Advisory Services") and until
October 18, 2005, provided asset management and portfolio design services to two
mutual funds. ICA's primary mission is to offer clients investment advisory and
asset management procedures grounded on sound investment principles of asset
allocation, performance monitoring, and portfolio rebalancing.

Under the guidelines of FAS 131, "Disclosures about Segments of an Enterprise
and Related Information", commencing with the quarter ended December 31, 2005,
management reports its segments on a management approach whereby our business is
presented in segments reflecting the way we make operating decisions and assess
performance. Accordingly, ICA is now reported as part of the asset management
services segment. Segments are currently reported based upon the services
provided, whereas they were previously segmented according to legal entity.

In presenting segment data, all corporate overhead items are allocated to the
segments, and inter-segment revenue, expense, receivables and payables are
eliminated. Currently it is impractical to report segment information using
geographical concentration.

Assets are allocated among ICH and its subsidiaries based upon legal ownership
and the services provided. Total period-end assets are presented in this Note 2
on a stand-alone basis, i.e., without inter-company eliminations. Corporate
items and eliminations are presented in the following table for the purpose of
reconciling the stand-alone asset amounts to total consolidated assets.

<PAGE>

                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE QUARTER ENDED SEPTEMBER 30, 2006 (UNAUDITED)

                                                September 30,
                                            2006            2005
                                       --------------- ---------------
Inter-company eliminations             $    1,136,748  $    2,436,927
Deferred income taxes                          24,013          31,629
Income Taxes                                      353        (277,704)
                                       --------------- ---------------
Total Corporate items and eliminations $    1,161,114  $    2,190,852
                                       =============== ===============

Segment reporting is as follows:

                                         Quarter Ended September 30,
                                            2006            2005
                                       --------------- ---------------
Non-interest revenues:
ICC brokerage services                 $   15,604,117  $   14,648,587
EPA, ICA asset management services.         1,463,557       1,343,427
ICH investments (loss) gain                         -           3,004
                                       --------------- ---------------

         Total                         $   17,067,674  $   15,995,018
                                       =============== ===============

Revenues from transaction with other
 operating segments:
ICC brokerage services                 $      369,814  $      360,889
EPA, ICA asset management services.                 -          40,099
                                       --------------- ---------------

         Total                         $      369,814  $      400,988
                                       =============== ===============

Interest and dividend income,net:
ICC brokerage services                 $      141,382  $       92,191
EPA, ICA asset management services.            14,522             482
ICH                                               229           3,817
ICH Securities                                 32,112          38,737
                                       --------------- ---------------

        Total                          $      188,245  $      135,227
                                       =============== ===============

Depreciation and amortization expenses:
ICC brokerage services                 $       74,017  $       52,327
EPA, ICA asset management services.               690           2,559
                                       --------------- ---------------

        Total                          $       74,707  $       54,886
                                       =============== ===============

Income tax provision (benefit):
ICC brokerage services                 $     (145,241) $     (108,614)
EPA, ICA asset management services.            70,903          31,672
ICH                                            (8,018)         23,247
                                       --------------- ---------------

        Total                          $      (82,356) $      (53,695)
                                       =============== ===============

Income (loss):
ICC brokerage services                 $     (350,072) $     (243,815)
EPA, ICA asset management services.           174,593         178,668
ICH                                           (26,468)        (16,427)
ICH Securities                                 32,112          38,738
                                       --------------- ---------------

        Total                          $     (169,835) $      (42,836)
                                       =============== ===============

Period end total assets:
ICC brokerage services                 $    9,278,448  $    9,285,883
EPA, ICA asset management services.         1,401,080       1,090,463
ICH                                         1,934,821         619,910
ICH Securities                              3,144,628       4,828,480
Corporate items and eliminations           (1,161,114)     (2,190,852)
                                       --------------- ---------------

        Total                          $   14,597,863  $   13,633,884
                                       =============== ===============
<PAGE>

                                       Six Months Ended September 30,
                                            2006            2005
                                       --------------- ---------------
Non-interest revenues:
ICC brokerage services                 $   33,438,474  $   28,508,090
EPA, ICA asset management services.         3,055,779       2,546,636
ICH investments (loss) gain                         -           2,863
                                       --------------- ---------------

         Total                         $   36,494,253  $   31,057,589
                                       =============== ===============

Revenues from transaction with other
 operating segments:
ICC brokerage services                 $    1,509,375  $      769,327
EPA, ICA asset management services.                 -          85,481
                                       --------------- ---------------

         Total                         $    1,509,375  $      854,808
                                       =============== ===============

Interest and dividend income,net:
ICC brokerage services                 $      271,985  $      171,198
EPA, ICA asset management services.            32,524             693
ICH                                               455           9,152
ICH Securities                                 58,874          74,848
                                       --------------- ---------------

        Total                          $      363,838  $      255,891
                                       =============== ===============

Depreciation and amortization expenses:
ICC brokerage services                 $      133,669  $       98,977
EPA, ICA asset management services.             1,381           5,118
                                       --------------- ---------------

        Total                          $      135,050  $      104,095
                                       =============== ===============

Income tax provision (benefit):
ICC brokerage services                 $     (617,995) $      (32,990)
EPA, ICA asset management services.           237,207          32,907
ICH                                            19,317          42,796
                                       --------------- ---------------

        Total                          $     (361,471) $       42,713
                                       =============== ===============

Income (loss) :
ICC brokerage services                 $   (1,177,302) $     (159,709)
EPA, ICA asset management services.           388,986         180,042
ICH                                           (37,995)        (30,781)
ICH Securities                                 58,854          74,838
                                       --------------- ---------------

        Total                          $     (767,457) $       64,390
                                       =============== ===============

Period end total assets:
ICC brokerage services                 $    9,278,448  $    9,285,883
EPA, ICA asset management services.         1,401,080       1,090,463
ICH                                         1,934,821         619,910
ICH Securities                              3,144,628       4,828,480
Corporate items and eliminations           (1,161,114)     (2,190,852)
                                       --------------- ---------------

        Total                          $   14,597,863  $   13,633,884
                                       =============== ===============

<PAGE>

                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    FOR THE QUARTER ENDED SEPTEMBER 30, 2006
                                   (UNAUDITED)

NOTE 3. LITIGATION

The Company typically is involved with various judicial, regulatory and
arbitration proceedings concerning matters arising in connection with the
conduct of its business.

                            Massachusetts Proceedings

By administrative complaint dated November 16, 2005, the Securities Division
(the "Division") of the Secretary of the Commonwealth of Massachusetts (the
"State") brought an adjudicatory proceeding against (the "Massachusetts
Proceedings") ICC alleging violation of its supervisory obligations under State
securities laws in connection with sales of equity-indexed annuities by a few of
ICC's independent registered representatives. The complaint alleges, among other
things, that ICC failed to properly supervise these representatives, thereby
allowing allegedly unsuitable sales of these insurance products, and that ICC's
actions constituted unethical or dishonest conduct. The complaint, which seeks
an order instructing ICC to cease such violations and to pay an unspecified
administrative fine, also requests that ICC's registration as a Securities
Broker-Dealer in Massachusetts be suspended or revoked, that the firm be
censured, and that it be ordered to fairly compensate purchasers of the
insurance products for any losses attributable to wrongdoing by ICC.

We are unable to reasonably estimate any possible range of loss related to these
proceedings due to their uncertain resolution. However, any conclusion of these
matters favorable to the Division could have a material adverse effect on our
financial position and results of operations.

                                Other Proceedings

At September 30, 2006, the Company was the co-defendant in various other
lawsuits other than the Massachusetts Proceedings. Management believes, based on
currently available information, that the results of such proceedings, in the
aggregate, will not have a material adverse effect on the firm's financial
condition. The Company has Errors and Omissions ("E&O") insurance to protect
itself from potential damages and/or legal costs associated with the
aforementioned lawsuits and, as a result, in the majority of cases the Company's
exposure is limited to between $75,000 and $100,000 per case, subject to policy
limitations and exclusions. In accordance with Financial Accounting Standards
Board ("FASB") Statement No. 5, "Accounting for Contingencies", the Company had
accrued expenses of approximately $0.89 million for the quarter ended September
30, 2006 related to legal fees and estimated probable settlement costs relating
to the Company's defense in various lawsuits.

Included in this accrual was $0.17 million for legal fees pertaining to the
Massachusetts Proceedings mentioned above. At year end March 31,2006 this
accrual was $0.43 million.


NOTE 4. STOCK BASED COMPENSATION

The Company adopted Statement of Financial Accounting Standard ("SFAS") No.
123(R), Share-Based Payment on April 1, 2006. The adoption of this statement did
not have a material impact on the Company's consolidated financial statements
given that it adopted the fair value recognition provisions of SFAS No. 123
effective September 28, 2002 using the modified prospective application
transition method within the provisions of SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure".

A summary of the status of the Company's employee and Directors' fixed stock
options as of September 30 ,2006 and September 30,2005 ]


<TABLE>
<CAPTION>

Employee                                                    2006                              2005
                                               -----------------------------     ----------------------------
Fixed Options                                               Weighted-Average                  Weighted-Average
                                                  Shares    Exercise Price          Shares    Exercise Price

<S>                                                 <C>          <C>                  <C>         <C>
Outstanding at beginning of year                    153,332      $1.02                198,934     $2.46

Granted                                                   -                                 -
Forfeited                                                 -      $0.00                (40,256)    $8.00
Exercised                                                 -                                 -
Reclassified(non-employee)                                -      $0.00                 (4,012)    $1.91
                                               --------------------------------------------------------------

Outstanding at period ended                         153,332      $1.02                154,666     $1.03

Options exercisable at period ended                 151,999                           151,999
</TABLE>


The fair value of options granted to employees in 2006 and 2005 is estimated on
the date of the grants using the Black-Scholes option-pricing model based on the
following assumptions:

                                        2006                     2005

Dividend                               0.19%                    0.13%
Volatility                            48.00%                   50.63%
Risk-free interest rate                4.84%                    4.17%
Expected Life in years                 1.25                     2.25




The following table summarizes information about employee and Directors' fixed
stock options outstanding as of September 30, 2006:

<TABLE>
<CAPTION>
             Options Outstanding                                                Options Exercisable
-----------------------------------------    ---------------------------------------------------------------------------------

                                                Weighted-Average
       Range Of              Number                 Remaining                              Number         Weighted-Average
    Exercise Prices       Outstanding           Contractual Life      Exercise Price     Exercisable       Exercise Price


<S>                             <C>            <C>                       <C>              <C>                <C>
         $1.00                150,000.00       No Stated Maturity          $1.00            150,000.00         $1.00

         $1.91                  3,332.00              1.75                 $1.91              1,999.00         $1.91

                              153,332.00             1.75(1)               $1.02            151,999.00         $1.01

</TABLE>

(1) Includes only stock options with stated maturity

Stock Option Plan

The Company had granted options prior to the adoption of SFAS 123(R) and had
previously reported in a footnote disclosure the proforma effect as if we had
reported an expense under the guidelines of SFAS No. 123. There was $0.00
expense reported as a proforma for quarter ended September 30, 2005.

In adopting the SFAS No. 123(R) there was no expense to be reported for the
fiscal quarter ended September 30, 2006.

Restricted Stock Plan

Under the 2005 Equity Incentive Plan, the Company is authorized to issue
restricted shares of common stock to employees. Awards under this plan may be
granted by the Company in connection with initial employment or under various
retention plans for individuals who are responsible for a contribution to the
management growth, and/or profitability of the Company. These shares are
forfeitable in the event of termination other than for death, disability or
retirement. The compensation cost is recognized over the vesting period of the
shares and is calculated as the market value of the shares on the date of grant.
The following activity occurred during the six months ended September 30, 2006:

<PAGE>

                                      Weighted
                                      Average
                                     Grant Date
                                     Fair Value
                        Shares           ($)
                    ---------------------------
    Non-vested at
    4/1/2006             26,785        $ 3.08

    Granted             336,200          3.65
    Vested             (182,511)         3.63
    Canceled               (441)         3.08
                    ---------------------------
    Non-vested at
    9/30/2006           180,033        $ 3.58


The Company's net loss for the three months ended September 30, 2006 includes
$30,797 of compensation costs related to the Company's Equity Incentive Plan
grants of restricted stock to employees, and $7,322 for grants to Independent
Representatives. The Company's net income for the three months ended September
30, 2005 includes $0.00 of compensation costs related to this plan.

For the six months ended September 30, 2006 the compensation costs related to
this plan includes $587,993 to employees and $74,122 for grant to directors,
consultants and independent representatives. There was no cost associated with
this plan for the six months ended September 30, 2005.

As of September 30, 2006, there was $644,921 of unrecognized compensation cost
related to grants under the Company's Equity Incentive Plan. These costs are
expected to be recognized over a weighted average period of approximately 4.40
years. The total fair value of shares vested under this plan during the three
months ended September 30, 2006 was $662,515.

NOTE 5 - NOTE RECEIVABLE

On October 24, 2005, the Company entered into a definitive agreement (the
"Transition Agreement") with Dividend Growth Advisors, LLC ("DGA"). Pursuant to
the Transition Agreement, the Company agreed to terminate its Investment
Advisory Agreement with Eastern Point Advisors Funds Trust (the "Trust")
effective October 18, 2005 to permit the appointment by the Trust of DGA to
supersede the Company as the Trust's Investment Advisor. The Company had served
since 1999 as Investment Advisor for the Funds, which are sponsored by the
Trust, and DGA had provided Investment Advisory Services to the Trust since 2004
pursuant to a subcontract with the Company. DGA entered into a new advisory
agreement directly with the Trust.

Under the terms of the Transition Agreement and an associated promissory note,
the receivable owed by the Funds to the Company was assigned to DGA and DGA
agreed to pay the Company an amount equal to the total of all fees that the
Company had waived or remitted to a fund in the Trust through October 18, 2005.
In addition, DGA has agreed to pay the Company 10 basis points on the assets
raised by the Company's Broker Dealer, ICC at the effective time of transition,
October 18, 2005 subject to "market to market" adjustments. These fees are to be
paid to the Company on a quarterly basis. Although these payments are part of
the agreement between DGA and the Trust, they are not part of the terms of the
note and are deemed totally separate.

The note provides for a principle amount of $747,617 quarterly payments of
interest accruing thereon at a 5.5% annual rate, and a full payment on or before
October 31, 2010. Prepayments are permitted without penalty.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Management's discussion and analysis reviews our consolidated financial
condition as of September 30, 2006 and March 31, 2006, the consolidated results
of operations for the three and six months ended September 30, 2006 and 2005
and, where appropriate, factors that may affect future financial performance.
The discussion should be read in conjunction with the consolidated financial
statements and related notes included elsewhere in the Form 10-Q. Unless context
requires otherwise, as used in this Management's Discussion and Analysis (i) the
"current period" means the fiscal quarter ended September 30, 2006, (ii) the
"prior period" means the fiscal quarter ended September 30, 2005, (iii) an
increase and decrease compares the current period to the prior period, and (iv)
all non-comparative amounts refer to the current period.

The statements, analyses and other information contained herein relating to
trends in our operations and financial results, the markets for our products,
the future development of our business, and the contingencies and uncertainties
to which we may be subject, as well as other statements including words such as
"anticipate," "believe," "plan," "estimate," "expect," "intend," "will,"
"should," "may," and other similar expressions, are "forward-looking statements"
under the Private Securities Litigation Reform Act of 1995. Such statements are
made based upon management's current expectations and beliefs concerning future
events and their effects on the Company and are subject to many risks and
uncertainties. Our actual results may differ materially from the results
anticipated in these forward-looking statements. Readers are directed to
discussions of risks and uncertainties that may be found in this report and
other documents filed by the Company with the United States Securities and
Exchange Commission. We specifically disclaim any obligation to update or revise
any forward-looking information, whether as a result of new information, future
developments or otherwise.

<PAGE>

OVERVIEW

We are a financial services holding company that, through our subsidiaries,
provides brokerage, investment advisory, asset management, financial planning,
insurance and related services. We operate in a highly regulated and competitive
industry that is influenced by numerous external factors such as economic
conditions, marketplace liquidity and volatility, monetary policy, global and
national political events, regulatory developments, competition and investor
preferences. Our revenues and net earnings may be either enhanced or diminished
from period to period by any one or more external factors.

OUR BUSINESS

The Company operates primarily through its subsidiary, ICC/ICA, in the
broker-dealer and investment advisory services segments of the financial
services industry.

Broker-Dealer Services

The Company provides broker-dealer services in support of trading and investment
by its Representatives' customers in corporate equity and debt securities, U.S.
Government securities, municipal securities, mutual funds, variable annuities
and variable life insurance, including provision of market information, internet
trading and portfolio tracking facilities and records management.

Investment Advisory Services

The Company provides investment advisory services including asset allocation and
portfolio rebalancing for its Representative's customers. In the past,
investment advisory services were performed by both ICC and EPA. To avoid the
duplication of efforts involved in supporting two advisory services entities,
the Company has consolidated its investment advisor services in ICC d/b/a ICA.

Recruitment and Support of Representatives

A key component of our business strategy is to recruit and provide productive
support to independent Representatives who generate comparatively large sales
volumes and are motivated to continually grow their business by offering a wide
variety of services and a diversified range of investment products to their
clients. The Company focuses on providing substantial added value to our
Representatives that enables them to be more productive, particularly in high
margin lines such as advisory services. Support provided to assist
Representatives in pursuing consistent and profitable sales growth takes many
forms. These forms include hi-tech trading systems, targeted financial
assistance and a network of communication links with investment product
companies including regional and national conventions that provide forums for
interaction to improve products, sales and client satisfaction.

OUR PROCESS

Check and Application

The majority of transactions are conducted through a check and application
process whereby a check and an investment company's particular product
application is delivered to us for processing. This includes principal review
and submission to the investment company or clearing firm.

Online Trading

Registered Representatives can efficiently submit a wide range of security
investments online through the use of our remote electronic entry trading
platform.

Bond Trading

The Company's fixed-income trading desk uses a network of regional and primary
dealers to execute trades across all fixed-income asset classes. The desk also
utilizes several dealer-only electronic services that allow the desk to offer
inventory and to execute trades.

Asset Allocation

Asset Allocation services are made available through ICA, the Company's
registered investment advisor subsidiary. These services, for the most part, are
conducted through our online trading platform. Other allocation services are
performed directly by the fund company.

KEY INDICATORS OF FINANCIAL PERFORMANCE

Management periodically reviews and analyzes our financial performance across a
number of measurable factors considered to be particularly useful in
understanding and managing our business. Key metrics in this process include
recruiting statistics for quality Representatives, top line commission and
advisory services revenues, gross margins, operating expenses, legal costs,
earnings per share, and average revenue per Representative.

<PAGE>

Three Months Ended September 30, 2006 Compared with Three Months Ended September
30, 2005:

RECRUITING

The Company experienced a 9.5% decrease in the number of Representatives who
were recruited during the current period as well as a $0.10 million decrease in
revenue from new recruits. This is directly related to the loss of two
experienced recruiters that have since been replaced.
<TABLE>
<CAPTION>
<S>                                    <C>              <C>                       <C>             <C>               <C>
Recruiting Statistics              Quarter Ended
                                   September 30                    Percent
                                                        Change      Change
                              -----------------------
                                                       2006 vs.   2006 vs.
                                    2006        2005      2005       2005
                              ----------- ----------- ----------------------

Revenues from New Producing
 Recruits:
---------------------------

 Mutual Funds, Variable
  Annuities, Direct
  Participation Programs,
  Other                       $  105,280  $   90,787  $   14,493       16.0%
 Trading Services (brokerage)     53,483     164,698    (111,215)     -67.5%
 Advisory Services                 1,298       7,643      (6,345)     -83.0%
                              ----------- ----------- ----------- ----------

Total                         $  160,061  $  263,128  $ (103,067)     -39.2%
                              =========== =========== =========== ==========

Representatives Recruited             19          21          -2       -9.5%
---------------------------


RESULTS OF OPERATIONS

                                                                                Percent of Revenue
                                          Quarter Ended September 30,      Quarter Ended September 30,       Percent
                                       --------------------------------- -------------------------------
                                                                                                             Change
                                                  2006             2005            2006       2005        2006 vs. 2005
                                       ---------------- ---------------- --------------- --------------- ---------------

Revenues:

     Commission                        $    15,289,438  $    14,359,466           88.60%          88.80%            6.5%
     Advisory                                1,444,068        1,299,799            8.37%           8.04%           11.1%
     Other fee income                          129,635           98,440            0.75%           0.61%           31.7%
     Marketing revenue                         204,533          234,310            1.19%           1.45%          -12.7%
     Other income                              188,245          178,230            1.09%           1.10%            5.6%
                                       ---------------- ----------------

               Total Revenue                17,255,919       16,170,245          100.00%         100.00%            6.7%
                                       ================ ================

Commission and advisory expenses            14,140,325       13,308,430           81.94%          82.30%            6.3%

          Gross Profit                       3,115,594        2,861,815           18.06%          17.70%            8.9%

Operating Expenses:

     Advertising                               231,797          182,056            1.34%           1.13%           27.3%
     Communications                            134,633          145,926            0.78%           0.90%           -7.7%
                                       ---------------- ----------------

          Total Selling Expenses               366,430          327,982            2.12%           2.03%           11.7%

     Compensation and benefits               1,710,572        1,383,911            9.91%           8.56%           23.6%
     Regulatory, legal and professional        730,702          875,714            4.23%           5.42%          -16.6%
     Occupancy                                 231,503          169,891            1.34%           1.05%           36.3%
     Other administrative expenses             156,296          185,331            0.91%           1.15%          -15.7%
                                       ---------------- ----------------

          Total Administrative Expenses      2,829,073        2,614,847           16.39%          16.17%            8.2%

               Total Operating Expenses      3,195,503        2,942,829           18.52%          18.20%            8.6%
                                       ================ ================

Operating Loss                                 (79,909)         (81,014)          -0.46%          -0.50%           -1.4%

Other Expense:

     Interest expense                            7,570           15,517            0.04%           0.10%          -51.2%

          Total Other Expense                    7,570           15,517            0.04%           0.10%          -51.2%

Loss before taxes                              (87,479)         (96,531)          -0.51%          -0.60%           -9.4%

(Provision) Benefit for income taxes           (82,356)          53,695            0.48%          -0.33%          253.4%

Net Loss                               $      (169,835) $       (42,836)          -0.98%          -0.26%          296.5%
                                       ================ ================
</TABLE>

<PAGE>

Revenues

The Company continues to grow revenues in the diversified investment sector of
the financial services industry. Revenues rose $1.1 million, or 6.7%, to $17.3
million as we continue our efforts to increase top line revenues in commissions
and advisory services. Leading this performance was a $0.93 million or 6.5%
increase in commissions and a $0.14 million or 11.1% increase in advisory
services revenue between the comparative periods.

Average Revenue Per Representative
<TABLE>
<CAPTION>
<S>                  <C>                   <C>
                        Quarter Ended        Quarter Ended    Incease/decrease      Percentage
                      September 30, 2006   September 30, 2005                    Increase/decrease
                    --------------------------------------------------------------------------------
Revenue:
   Commission        $       15,289,439    $       14,359,465
   Advisory                   1,444,068             1,299,799
   Other fee income             129,635                98,440
                    --------------------  --------------------
                     $       16,863,142    $       15,757,703  $  1,105,438                  7.0%


Number of
 Representatives                    753                   637           116                 18.2%

Average Revenue Per
 Rep                 $           22,395    $           24,737       $(2,342)                 -9.5%
</TABLE>

Average revenue per Representative decreased by 9.5%, reflecting a greater
growth in the number of representatives than in revenue. Although average
revenue per Representative was down, the Company will continue recruiting
qualified, sophisticated Representatives who are capable of providing a more
diversified range of products to their clients. As we continue our aggressive
recruiting process, we strive to also achieve growth in average revenue per
representative.

Commissions. Commissions from variable annuities comprised $0.61 million, or
65.4%, of the $0.93 million increase in commission revenue compared to the prior
period. Commissions from direct participation programs, which predominantly
include REITs (Real Estate Investment Trusts) and oil and gas programs,
increased by $0.44 million or 47.1%.
<TABLE>
<CAPTION>
<S>                           <C>             <C>            <C>                               <C>                 <C>
                               Quarter Ended                                         Percentage          Percentage
                               September 30,                 Increase/decrease        of Total       Increase/decrease
                                   2006            2005        2006 vs. 2005     Increase/decrease     2006 vs. 2005
                              ------------------------------------------------------------------------------------------

Commission Revenue:
------------------------------
   Variable Annuities         $    5,982,629  $   5,374,850  $          607,779                65.3%               11.3%
   Trading (brokerage)(1)          4,582,422      4,623,758             (41,336)               -4.4%               -0.9%
   Mutual Funds                    2,358,286      2,499,624            (141,338)              -15.2%               -5.7%
   Direct Participation
    Programs                       2,217,661      1,780,055             437,606                47.1%               24.6%
   Other                             148,440         81,179              67,261                 7.2%               82.9%
                              ------------------------------------------------------------------------------------------

Total Commission Revenue      $   15,289,438  $  14,359,466  $          929,972               100.0%                6.5%
                              ==========================================================================================
</TABLE>

Commissions from variable annuities historically continue to comprise the
largest component of commission revenue. Commissions in direct participation
programs grew primarily as a result of increased sales volume in the oil and gas
programs. The Company's commission revenue from trading decreased marginally for
the current period. Although trading commissions decreased slightly this current
period, it continued to constitute the second largest component of commission
revenue.

Over recent periods, trading revenue generally has maintained its share of the
revenue due to success in utilizing our clearing firm's trading platform to
enable Representatives to conduct more brokerage business in an efficient
fashion. The recent trend of higher growth in fee-based advisory services
compared to commission-based services reflects concerted efforts by management
to grow revenues in the higher margin advisory services area.

Advisory Fees. Advisory services typically provide significantly higher margins
than traditional broker-dealer products such as variable annuities and mutual
funds. See " - Gross Margins". Accordingly, we have been encouraging our
Representatives to convert more of their business to advisory services. Although
we do not control which advisory services our Representatives provide for their
clients, we continue to make concerted efforts to attract them to our
proprietary advisory services programs through seminars, trade shows and direct
telemarketing.

<PAGE>

Fees from our Rep-directed asset-managed program, A-MAP, where asset allocation
and other investment advisory services are provided directly by our independent
Representatives, continue to be the leading source of revenue in this category.
Revenues from this program grew by $0.28 million or 40.3% to $0.96 million
compared to $0.68 million the prior period. Supported by our Net Exchange Pro
and Pershing direct mainframe trading platforms, this program is becoming
increasingly popular with our Representatives because of the opportunities it
provides to deliver to their clients superior asset management services at a
potentially lower cost, and the potential for increased overall investment
performance.

Revenues from our fund-managed F-MAP or separately managed S-MAP accounts, where
investment advisory services are provided by ICA instead of our independent
Representatives, increased slightly. Over recent quarters revenues from the
fund-managed category have slightly declined due to the termination of accounts
where asset values have fallen below a minimum level. Also, management has not
been aggressively marketing this program compared to the Rep-directed
asset-managed program and S-MAP program.

A slight decrease of $0.03 million was experienced in revenues from
asset-managed programs where investment services are provided by outside
advisors. ICA has been continuing to direct their marketing efforts away from
these third-party management programs and toward their internal, proprietary
asset-managed models. ICA has been providing sales, marketing, trading platform
and other technical support to our Representatives to enable them to deliver
improved investment advisory services.

Revenues from advisory services provided to mutual funds decreased by $0.11
million when compared to the prior period, reflecting the termination during the
prior year of the Company's management agreement pursuant to which it had been
providing advisory services to mutual funds.

Revenues from our Rep-directed asset managed program, A-MAP, have been
contributing an increasing proportion of our overall advisory services revenue
growth. Our current success in promoting our A-MAP advisory services program in
large part is due to providing an enhanced online platform to our
Representatives that enables them to perform their asset allocation services in
a more cost effective manner. Resulting transactional cost savings have been
passed on to our Representatives' clients in the form of lower fees for improved
service.

Other Fee Income. Other fee income increased by $0.03 million or 31.7%,
including (i) a $0.04 million increase in administrative fees for providing
regulatory services to our Representatives in connection with renewals of their
NASD licenses and errors and omissions (E&O) policy enrollment (ii) a $0.01
million increase in fees in portfolio consolidation reporting services, and
(iii) a $0.02 million decrease in administration fees on asset-managed accounts
resulting from the termination of several of these accounts when asset balances
fall below minimum levels.

Marketing Revenue. Net marketing revenues decreased by $0.03 million or 12.7%,
reflecting a $0.04 million increase in marketing support to assemble events. We
also saw a combined $0.07 million decrease in marketing support revenues from
product companies and in sales of ancillary items such as apparel, bags, and
hats with Company logo and blast email services.

Other Income. Other income, consisting primarily of interest and dividends and
gains or losses on investments, increased by $0.01 million. The majority of the
increase came from interest earned on account balances due to an increase in the
average daily balance in our trading accounts.

Gross Margins
<TABLE>
<CAPTION>
<S>                           <C>         <C>              <C>         <C>         <C>         <C>                 <C>
                                                       Gross Margin Retention          Percent of Gross Margin
                                   Gross Margin           Quarter Ended           Quarter Ended          Gross Margin
                              Quarter Ended Sept 30,         Sept 30,                Sept 30,           Percent Change
                              ----------------------- ----------------------  ----------------------  ------------------
                                 2006        2005       2006        2005        2006        2005        2006 vs. 2005
                              ----------- ----------- ----------  ----------  ----------  ----------  ------------------

Commission - Mutual Funds and
 Variable Annuities           $1,372,615  $1,123,787       13.0%       11.5%       44.1%       39.3%               22.1%
(Check and Application
 distribution)

Commission - Trading             882,103     652,528       19.3%       14.1%       28.3%       22.8%               35.2%

Commission - Insurance
 Products                         61,079      78,017      100.0%       99.9%        2.0%        2.7%              -21.7%

Commission - Underwriting          8,736         307       10.0%       10.0%        0.2%        0.0%             2745.6%

Advisory Services                336,137     570,443       23.0%       42.5%       10.8%       19.9%              -41.1%

Licensing                         98,796      54,612      100.0%      100.0%        3.5%        1.9%              101.7%

Marketing                        204,533     234,310        n/a         n/a         6.6%        8.2%              -12.7%

Other income                     151,595     147,810        n/a         n/a         4.5%        5.2%               -5.1%
                              ----------- -----------

Total Gross Margin            $3,115,594  $2,861,814       18.1%       17.7%      100.0%      100.0%                8.9%
                              =========== ===========
</TABLE>

Gross margin rose by $0.25 million or 8.9% to $3.1 million for the current
period primarily due to a $0.23 million or 35.2% increase in gross margin
derived from trading and a $0.25 million or 22.1% increase from our check and
application programs. Offsetting this increase was an $0.23 million dollar
decease in gross margins from advisory services.

<PAGE>

The increase in gross margin from trading reflects an increase in brokerage
commissions and a reduction in clearing charges due to increased sales volume,
increased commission retention rates, and more fee income within corporate
accounts. Contributing to this improvement in gross margins from trading was a
combined increase of $0.08 million in the margin from our trails and from money
market income on account balances. Another contributing factor was $0.15 million
from net trading commissions.

The combined effect of these factors was an increase in our average payout
retention in brokerage services from 22.4% in the prior period to 30.2% in the
current period that, in turn, contributing to an increase in our gross trading
margin from 14.1% to 19.3%. Please refer to the Gross Margin Table, above.

We are continuing our efforts to recruit capable and experienced Representatives
who can offer a broader range of brokerage products that have a greater profit
margin compared to the normal mutual fund and variable annuity products (see
"--Commissions", above).

Advisory Services. Advisory services profit margin decreased by $0.23 million or
41.1%. The majority of the decrease stems from a $0.11 million decrease in
margins in asset managed services of our mutual funds resulting from termination
of EPA's investment advisory agreement with Eastern Point Advisors Funds Trust.
See Footnote 1 - "Advisory Fees from Mutual Funds" to our Condensed Consolidated
Financial Statements.

Furthermore, there was a combined $0.08 million decrease in profit margins from
ICA and third party directed advisory services reflecting management's focus on
marketing our rep-directed asset-managed program, A-MAP; however margins from
our A-MAP program were relatively flat for the comparative periods as a result
of lower platform fees in order to increase assets under management.

Other decreases in profit margins included a $0.06 million decrease as a result
of increased payouts for sub-advisor fees, advisory reporting fees, employee
commissions, and financial planning fees. These payouts vary depending upon the
number and market value of asset managed accounts.

Positive movement in the Company's profit margin from advisory services has come
mainly from our rep-directed asset-managed programs. These programs make it
possible for Representatives to manage client accounts by trading directly
online using our automated trading platform. Resulting increases in the
Representative's trading volume effectively increase the Company's commission
revenues and gross margin. Additionally, by processing more transactions at a
stable fixed cost, our enhanced trading technology fosters economies of scale
that control operating expenses required to process the increased trade volume.
Refer to "-- Our Process" above.

In addition to experiencing a decrease in profit margin from advisory services
during the comparative period, several factors contributed to a decrease in our
retention rate from 42.5% to 23.0%. Advisory fee rates derived from Rep-directed
business declined slightly, reflecting decreases in the commission retention
rate for client accounts whose balances reached levels that trigger automatic
retention rate reductions. Also, as a result of terminating the management
agreement associated with the mutual funds, we no longer receive any advisory
fees from that revenue component which had directly contributed to our margin.

Although our retention rate from advisory services decreased compared to the
prior period, this category on a percentage-retention basis still retains a
higher profit margin than most of the other products or services we and our
Representatives provide. (See -"Gross Margin Table", above).

Mutual Funds, Variable Annuities, Etc. Profit margins from mutual fund sales,
variable annuity sales, direct participation programs and other check and
application distribution programs generated $1.37 million or 44.1% of the total
gross margin compared to $1.1 million or 39.3% during the prior period. As
presented in the previous gross margin table, margin from our check and
application distribution programs comprised the greatest portion of our overall
profit margin; however, trading achieved the largest percentage increase in
gross margin in our principal categories.

Commission Retention

Commission payouts to our independent Representatives, as a percentage of
commissioned revenues, decreased to 81.9% compared to 82.3% for the prior
period. As a result, our retention rates increased from 17.7% to 18.1%.
Management is continuing their efforts to improve commission retention rates by
refining our business model to emphasize the recruitment and retention of
sophisticated Representatives.

Sophisticated Representatives can offer a variety of brokerage and advisory
products and services that provided for a higher commission retention rate than
those obtained from mutual funds and variable annuities. We experienced higher
margins from trading as a result of ticket charges and fees pertaining to
increases in account balances that flow entirely to the profit margin. From
advisory services we receive fees on the asset balance in the account that go
directly to the firm. Refer to Note 1 --"Revenue Recognition - Advisory Fees" to
our Condensed Consolidated Financial Statements.

<PAGE>

Operating Expenses

Operating expenses, which experienced a $0.25 million or 8.6% increase, are
discussed in detail below:

Compensation and Benefits. The largest component of operating expenses is
compensation and benefits, which increased by $0.33 million or 23.6%. General
salaries made up the majority of the increase accounting for a $0.19 million
increase or 19.02%. In addition, we had a $0.09 million dollar increase in stock
compensation resulting from the granting of restricted stock and stock options.
The $0.19 million increase in general salaries resulted primarily from the
hiring and retention of 19 additional personnel in such functions as:

     o    trading and operations -- to continue providing quality customer
          service to our Sophisticated Representative force in the face of
          increasing transactional volume,

     o    compliance -- to meet the  growing  needs  within  the  industry  for
          internal control, quality supervision and continuing education to our
          independent Representatives,

     o    Representative recruitment -- to enhance our ability to recruit
          quality Representatives,

     o    Legal Department -- to help reduce the need for expensive outside
          counsel and

     o    other general administrative areas.

Regulatory, Legal and Professional. Regulatory, Legal and Professional expenses
decreased by $0.15 million or 16.6%. The largest component of this decrease was
a $0.48 million decrease in legal settlements from dealings unrelated to our
business during the prior period. Offsetting this decrease was an increase of
$0.23 million in legal fees pertaining to the Massachusetts Proceedings
described in footnote 3 to the Condensed Consolidated Financial Statements.

We increased our accruals for legal expenses from $0.20 million to $0.66
million. Please refer to Footnote 3 to the Condensed Consolidated Financial
Statements. In addition, since we operate in an industry embedded with
regulation, we will continue to invest significant resources to reduce the
likelihood of future litigation by promoting accuracy, ensuring sound
operational techniques and providing appropriate compliance measures.

Finally, we experienced a $0.06 million increase in professional fees for
outside consulting services in connection with the installation and integration
of our new accounting software and data entry and scanning support for the
operations departments.

Advertising. Advertising, including related marketing expenses, increased by
$0.05 million or 27.32%, reflecting increased spending on trade magazine ads and
officer travel in the continuing drive to recruit quality Representatives.

Communications. Communications expenses decreased by $0.01 million or 7.7%,
primarily due to a decrease in printing costs offset by an increase in telephone
expenses. The costs savings in printing were incurred by communicating to our
perspective Representatives by emailing our product literature instead of direct
mailing. The Company's website is currently used to target new revenue streams
by providing access to information through the website and other Internet
publications. Communication efforts and related expenses, which also include
investor/public relations, conference, and telephone, have historically been
positively correlated with the overall growth of our business. Our website and
newsletter, "The Capitalist" have become effective medium to communicate to
potential qualified Representatives for recruitment purposes.

Occupancy. Occupancy expenses increased by $0.06 million or 36.3% primarily as a
result of opening Investment Centers in Braintree, MA and Manhattan, NY and a
new business center in Miami, FL. Furthermore, we added additional space for
senior management and our marketing department into a separate Lynnfield, MA
location.

The Company also experienced an increase in depreciation and acquired additional
fixed assets in the form of new computers for the additional staff, leasehold
improvements and additional furniture and fixtures to the home office in
Lynnfield, MA to accommodate the increase in number of employees.

Other Administrative. Other administrative expenses, which include various
insurance, postage, office and computer-related expenses, decreased by $0.03
million or 15.67%. Management has been making a concerted effort to reduce
general office and postage expenses through several cost saving methods.

Operating and Net Losses

The Company's operating and net losses, which were down slightly compared to the
prior period, can be attributed primarily to not generating enough revenue and
profit margin to offset increases in overhead. The losses during both of these
comparative periods also represent the continuance of a cyclical trend in our
business wherein our Representatives typically write less business during the
summer months.

<PAGE>

The company is committing resources, as mentioned above, to improve their
overall marketing efforts, and at the same time invest in technology to help our
representatives process their business more efficiently. Through an automated
process there would be less reliance on personnel to process business .This
could result in cost savings on the administrative side and at the same time
improve our bond with our representatives who warrant `state of the art'
technology.

  We will continue to make substantial investments in our selling and
administrative services capabilities, including additions to management,
personnel and service infrastructure, as part of a concerted strategy to
increase revenues and profitability. Management firmly believes that a sustained
focus on enhancing our clearing firm's state-of-the-art business platform will
facilitate accelerated recruitment of independent Representatives that are
focused on growing revenues, particularly in high margin lines such as advisory
and trading services. As part of this effort, the Company continues to invest in
an automated trading system that enables sophisticated Representatives to
enhance client base and activity.

The continued focus and implementation of this business plan should help turn
the Company's profitability around as long as we can reduce the legal fallout
that has recently impacted our operating income and net profit.


Management believes that continued focus on and implementation of this business
plan should help turn the company's profitability around provided that there is
a significant reduction in the extraordinary costs of the Massachusetts
Litigation that has been negatively impacting our operating income and net
profit.

<PAGE>

Six Months Ended September 30, 2006 Compared with Six Months Ended September
30, 2005:

Results reported for the current six month period compared to the prior six
month period are discussed below to the extent that explanations for comparative
variances in year to date results differ from the explanations for comparative
quarterly results discussed above. Please refer to the quarterly results
analysis for a general explanation of variances concerning the current six month
period that are not discussed below.

RECRUITING

New producing recruits generated an increase in revenue of $0.22 million in our
check and application business in mutual funds, variable annuities, and direct
participation programs versus the prior period. Overall revenue from new
recruits was down 5.8% in the current period compared to the prior period. This
is directly related to the loss of two experienced recruiters that have since
been replaced. Although operating with a smaller recruiting staff, average
revenue per recruit continues to rise.
<TABLE>
<CAPTION>
<S>                           <C>           <C>           <C>                             <C>
Recruiting Statistics             Six Months Ended
                                    September 30              Change          Percent Change
                                 2006          2005       2006 vs. 2005       2006 vs. 2005
                              -----------   -----------   --------------   --------------------

Revenues from New Producing
 Recruits:
------------------------------
   Mutual Funds, Variable
    Annuities, Direct
    Participation Programs,
    Other                     $  568,471    $  346,759    $     221,712                   63.9%
   Trading Services
    (brokerage)                  209,041       397,898         (188,857)                 -47.5%
   Advisory Services               8,385        89,275          (80,890)                 -90.6%
                              -----------   -----------   --------------   --------------------

Total                         $  785,897    $  833,932    $     (48,035)                  -5.8%
                              ===========   ===========   ==============   ====================

Representatives Recruited             48            54               -6                  -11.1%
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S>                       <C>             <C>                <C>        <C>              <C>
RESULTS OF OPERATIONS
                                                          Percent of Revenue
                                                           Six Months Ended
                         Six Months Ended September 30,      September 30,         Percent
                         ------------------------------- ---------------------
                                                                                    Change
                               2006            2005        2006       2005      2006 vs. 2005
                         --------------- --------------- ---------- ----------  --------------

Revenues:

  Commission              $  32,748,340   $  27,727,533      88.85%     88.41%           18.1%
  Advisory                    3,012,497       2,455,781       8.17%      7.83%           22.7%
  Other fee income              196,032         201,878       0.53%      0.64%           -2.9%
  Marketing revenue             528,947         669,534       1.44%      2.13%          -21.0%
  Other income                  372,275         308,754       1.01%      0.99%           20.6%
                         --------------- ---------------

Total Revenue                36,858,091      31,363,480     100.00%    100.00%           17.5%
                         =============== ===============

Commission and advisory
 expenses                    29,955,545      25,290,712      81.27%     80.64%           18.4%

Gross Profit                  6,902,546       6,072,768      18.73%     19.36%           13.7%

Operating Expenses:

  Advertising                   501,424         424,663       1.36%      1.35%           18.1%
  Communications                200,401         301,434       0.54%      0.96%          -33.5%
                         --------------- ---------------

   Total Selling Expenses       701,825         726,097       1.90%      2.32%           -3.3%

  Compensation and
   benefits                   4,426,597       3,119,039      12.01%      9.94%           41.9%
  Regulatory, legal and
   professional               1,933,042       1,348,858       5.24%      4.30%           43.3%
  Occupancy                     465,509         323,982       1.26%      1.03%           43.7%
  Other administrative
   expenses                     488,899         428,839       1.33%      1.37%           14.0%
                         --------------- ---------------

    Total Administrative
     Expenses                 7,314,047       5,220,718      19.84%     16.65%           40.1%

Total Operating Expenses      8,015,872       5,946,815      21.75%     18.96%           34.8%
                         =============== ===============

Operating (Loss) Income      (1,113,326)        125,953      -3.02%      0.40%         -983.9%

Other Expense:

  Interest expense               15,602          18,851       0.04%      0.06%          -17.2%

    Total Other Expense          15,602          18,851       0.04%      0.06%          -17.2%

(Loss) Income before
 taxes                       (1,128,928)        107,103      -3.06%      0.34%        -1154.1%

(Benefit) Provision for
 income taxes                  (361,471)         42,713      -0.98%      0.14%         -946.3%

Net (Loss) Income         $    (767,457)  $      64,390      -2.08%      0.21%        -1291.9%
                         =============== ===============
</TABLE>

Revenues

The Company continues to grow revenues in the diversified investment sector of
the financial services industry. Our revenues rose $5.49 million, or 17.5%, to
$36.85 million as we continue our efforts to increase top line revenues in
commissions and advisory services. Leading this performance was a $5.02 million
or 18.1% increase in commissions and a $0.56 million or 22.7% increase in
advisory services revenue between the comparative periods.

Average Revenue Per Representative
<TABLE>
<CAPTION>
<S>                          <C>                   <C>

                             Six Months Ended      Six Months Ended     Percentage
                             September 30, 2006    September 30, 2005    Increase
                           -------------------------------------------------------
Commission                   $       32,748,340    $      27,727,533
Advisory                              3,012,497            2,455,781
Other fee income                        196,032              201,878
                           --------------------- --------------------
                             $       35,956,869    $      30,385,192        18.3%


Number of Representatives                   753                  637        18.2%

Average Revenue Per Rep      $           47,751    $          47,700         0.1%
</TABLE>

Our average revenue per Representative was relatively flat for the comparative
periods of September 30, 2006 versus September 30, 2005.

Commissions. Commissions from variable annuities and trading provided $3.91
million, or 77.9%, of a $5.02 million increase in commission revenue compared to
the prior period. Commissions from direct participation programs, which
predominantly include REITs (Real Estate Investment Trusts) and oil and gas
programs, increased by $1.1 million or 32.9%.
<TABLE>
<CAPTION>
<S>                          <C>              <C>              <C>                         <C>              <C>
                                    Six Months Ended                              Percentage       Percentage
                                      September 30                                 of Total     Increase/decrease
                                   2006             2005        2006 vs. 2005  Increase/decrease  2006 vs. 2005
                           --------------------------------------------------------------------------------------
Commission Revenue:
---------------------------
   Variable Annuities        $    13,146,136  $    10,836,054  $     2,310,082             46.0%            21.3%
   Trading (brokerage)(1)          9,828,921        8,227,877        1,601,044             31.9%            19.5%
   Mutual Funds                    4,851,186        4,985,496         (134,310)            -2.6%            -2.7%
   Direct Participation
    Programs                       4,609,637        3,468,226        1,141,411             22.7%            32.9%
   Other                             312,460          209,880          102,580              2.0%            48.9%

Total Commission Revenue     $    32,748,340  $    27,727,533  $     5,020,807            100.0%            18.1%
                           ======================================================================================
1. Revenue designated as Trading (brokerage) includes revenue from mutual funds
   sold through our trading platform.
</TABLE>

The growth in commissions historically has been dominated by variable annuities;
however, management has continued their efforts to recruit sophisticated
representatives who are licensed to sell equities in addition to variable
annuities. This strategy is demonstrated in the table above. Revenue from our
brokerage business continues to maintain its share of the revenue base as the
second largest revenue component generated from commissions.

Advisory Fees. Fees from our Rep-directed asset-managed program, A-MAP, grew by
$0.72 million or 57.6% to $1.97 million compared to $1.25 million the prior
period. Revenues from our fund-managed F-MAP or separately managed S-MAP
accounts, where investment advisory services are provided by ICA instead of our
independent Representatives, increased by only $0.04 million or 5.3% between the
comparative periods. A slight decrease of $0.06 million was experienced in
revenues for the comparative periods from asset-managed programs where
investment services are provided by outside advisors. Revenues from Advisory
Services provided to mutual funds decreased by $0.18 million when compared to
the prior period.

Other Fee Income. Other fee income decreased slightly by $0.01 million or 2.9%.

Marketing Revenue. Net marketing revenues decreased by $0.14 million or 21.0%
primarily as a result of a decrease in marketing support revenues from product
companies and revenues to assemble events .

<PAGE>

Other Income. Other income, consisting primarily of interest and dividends and
gains or losses on investments, increased by $0.06 million for the comparative
current period to the prior period. The majority of the increase came from
interest earned on account balances due to an increase in the average daily
balance in our trading accounts.

Gross Margins
<TABLE>
<CAPTION>
<S>                           <C>           <C>            <C>      <C>       <C>       <C>         <C>
                                                            Gross Margin         Percent of Gross Margin
                                                              Retention
                                     Gross Margin         Six Months Ended   Six Months Ended    Gross Margin
                              Six Months Ended Sept 30,       Sept 30,           Sept 30,       Percent Change
                              -------------------------- ------------------ ------------------- --------------
                                                                                                    2006
                                  2006          2005       2006     2005      2006      2005       vs. 2005
                              ------------- ------------ --------- -------- --------- --------- --------------

Commission - Mutual Funds and
 Variable Annuities           $  2,889,507  $ 2,232,804    12.8%    11.6%     41.8%     36.8%       29.4%
(Check and Application
 distribution)

Commission - Trading             2,064,156    1,510,748    21.0%    18.4%     29.9%     24.9%       36.6%

Commission - Insurance
 Products                          129,753      193,604    99.8%    99.4%     1.9%      3.2%        -33.0%

Commission - Underwriting           18,238        1,507    10.0%    10.0%     0.3%      0.0%       1110.2%

Advisory Services                  819,357    1,094,315    26.8%    42.9%     11.9%     18.0%       -25.1%

Licensing                          136,624       88,427   100.0%    100.0%    2.1%      1.5%        67.3%

Marketing                          528,947      669,534    n/a       n/a      7.7%      11.0%       -21.0%

Other income                       315,964      281,829    n/a       n/a      4.4%      4.6%         8.1%
                              ------------- ------------

Total Gross Margin            $  6,902,546  $ 6,072,768    18.7%    19.4%    100.0%    100.0%       13.7%
                              ============= ============
</TABLE>

Gross margin rose by $0.83 million or 13.7% to $6.90 million for the current
period primarily due to a $0.55 million or 36.6% increase in gross margin
derived from trading over the prior period.

Trading. The increase in gross margin from trading reflects an increase in
brokerage commissions and a reduction in clearing charges due to increased sales
volume, increased commission retention rates, and more fee income within
corporate accounts.

Contributing to this improvement in gross margins from trading was a combined
increase of $0.19 million in the margin from our trails and from money market
income on account balances. Another contributing factor was a $0.36 million
contribution from net trading commissions as a result of lower payouts to
Representatives.

The combined effect of these factors was an increase in our average payout
retention in brokerage services from 28.20% in the prior period to 31.98% in the
current period that, in turn, contributing to an increase in our gross trading
margin from 18.4% to 21%. Please refer to the Gross Margin Table, above.

We are continuing our efforts to recruit capable and experienced Representatives
who can offer a broader range of brokerage products that have a greater profit
margin compared to the normal mutual fund and variable annuity products (see
"--Commissions", above).

Advisory Services. Advisory services profit margin decreased by $0.28 million or
25.1% for the current period compared to the prior period. The majority of the
profit margin in advisory services stems from our Rep-directed asset-managed
programs which contributed a $0.16 million increase to our profit margin.
Offsetting this increase was a $0.18 million decrease in margins in
asset-managed services of our mutual funds resulting from termination of our
investment advisory agreement with Eastern Point Advisors Funds Trust. See
Footnote 1 - "Advisory Fees from Mutual Funds" to our Condensed Consolidated
Financial Statements.

Other decreases in profit margins included a $0.12 million decrease as a result
of increased payouts for sub-advisor fees, advisory reporting fees, employee
commissions, and financial planning fees. These payouts vary depending upon the
number and market value of asset managed accounts.

Finally, there was a combined $0.13 million decrease in profit margins from ICA
and third party directed advisory services reflecting management's focus on
marketing our Rep-directed asset-managed program, A-MAP.

<PAGE>

In addition to experiencing a decrease in profit margin from advisory services
during the comparative period, a couple of factors contributed to a decrease in
our retention rate from 42.9% to 26.2%. Advisory fee rates derived from
Rep-directed business declined slightly, reflecting decreases in the commission
retention rate for client accounts whose balances reached levels that trigger
automatic retention rate reductions. Also, as a result of terminating the
management agreement associated with the mutual funds, we no longer receive any
advisory fees from that revenue component which had directly contributed to our
margin.

Mutual Funds, Variable Annuities, Etc. Profit margins from mutual fund sales,
variable annuity sales, direct participation programs and other check and
application distribution programs generated $2.89 million or 41.8% of the total
gross margin compared to $2.23 million or 36.8% during the prior period. As
presented in the previous gross margin table, margin from our check and
application distribution programs comprised the greatest portion of our overall
profit margin; however, trading achieved the largest percentage increase in
gross margin in our principal categories.

Commission Retention

Commission payouts to our independent Representatives, as a percentage of
commissioned revenues, was relatively the same for the comparative periods ended
September 30, 2006 versus September 30, 2005. Management is continuing their
efforts to improve commission retention rates by refining our business model to
emphasize the recruitment and retention of sophisticated Representatives.

Sophisticated Representatives can offer a variety of brokerage and advisory
products and services that provided for a higher commission retention rate than
those obtained from mutual funds and variable annuities. We experienced higher
margins from trading as a result of ticket charges and fees pertaining to
increases in account balances that flow entirely to the profit margin. From
advisory services we receive fees on the asset balance in the account that go
directly to the firm. Refer to Note 1 --"Revenue Recognition - Advisory Fees" to
our Condensed Consolidated Financial Statements.

Operating Expenses

Operating expenses, which experienced a $2.07 million or 34.8% increase for the
six months ended September 30, 2006 compared to September 30, 2005, are
discussed in detail below:

Compensation and Benefits. The largest component of operating expenses is
compensation and benefits, which increased by $1.30 million or 41.9% during the
current period. This change was due primarily to (i) a $0.66 million increase in
stock-based compensation resulting from the issuance of restricted common stock
to Employee and Directors on June 12, 2006 under our 2005 Equity Incentive Plan,
(ii) a $0.50 million increase in general salaries and (iii) a $0.13 million
increase in compensation expenses from 401(k) contributions and payroll taxes.
Partially offsetting these increases was a $0.05 million decrease in officer's
salaries primarily as a result of the resignation of the President of Eastern
Point Advisor in the previous fiscal year.

The $0.50 million increase in general salaries resulted primarily from the
hiring of 19 additional personnel to support continued growth, as generally
described in our comparative analysis of the current quarter, above.

Regulatory, Legal and Professional. Regulatory, Legal and Professional expenses
increased by $0.58 million or 43.3%. The largest component of this increase was
a $0.49 million or 1.09% increase in non-in-house legal fees, $0.58 million of
which was incurred in connection with the Massachusetts Proceedings described in
Footnote 3 to the Condensed Consolidated Financial Statements. Offsetting this
increase resulting from the Massachusetts Proceedings was a $0.09 million dollar
decrease in legal fees pertaining to other legal matters.

There was a $0.11 million decrease in legal settlements primarily resulting from
a case we settled in the prior period that was not related to our general
business activities. We did not have any cases of that nature during the current
period.

We increased our accruals for legal expenses to $0.89 million for the current
period from $0.20 million for the prior period. Please refer to Footnote 3 to
the Condensed Consolidated Financial Statements.

Finally, we experienced a $0.14 million increase in professional fees for
outside consulting services in connection with the installation and integration
of our new accounting software and data entry and scanning support for the
operations departments and a $0.07 million dollar increase for compliance
purposes related to record-keeping and NASD assessment fees.

Advertising and Marketing. Advertising, including related marketing expenses,
increased by $0.08 million or 18.1% for reason described in our
quarter-to-quarter analysis.

Communications. Communications expenses decreased by $0.10 million or 33.5%,
primarily due to decreases in printing and website expenses.

Occupancy. Occupancy expenses increased by $0.14 million or 43.7% primarily as a
result of a $0.10 million in added costs for rent in our new locations. The
Company added Investment Centers in Braintree, MA and Manhattan, NY and a
business center in Miami, FL. The Company also experienced an increase of $0.03
million in depreciation and acquired additional fixed assets in the form of new
computers for the additional staff, leasehold improvements and additional
furniture and fixtures to the home office in Lynnfield, MA to accommodate the
increase in number of employees.

<PAGE>

Other Administrative. Other administrative expenses, which include various
insurance, postage, office and computer-related expenses, increased by $0.06
million or 14.0%.

Operating Income

Operating income decreased by $1.24 million or 983.92% due to an increase in
operating expenses of $2.07 million or 34.8%. The most significant contributors
to the increase in operating expenses were a $0.66 million increase in stock
based compensation, a $0.50 million increase in general salary compensation from
the hiring of new personnel, and $0.58 million increase in legal costs primarily
in connection with the Massachusetts Proceedings. Partially offsetting these
increases in operating overhead was a $0.83 million increase in our gross
margin, primarily in brokerage business.

Net Income

Net income decreased by $0.83 million or 1291.9%, or $0.14 per basic and diluted
share, as the Company reported a $0.77 million dollar loss this current period
to a net profit of $0.06 million in the prior period. This was the result of a
decrease in operating income offset by an income tax benefit of $0.36 million.
The decrease in operating income is a result of incurring more operating
expenses, primarily in compensation expenses, proportionate to the increase in
revenues and profit margins when comparing the Six Months Ended September 30,
2006 to the Six Months Ended September 30, 2005.

                         Liquidity and Capital Resources

The Company believes that achieving its return on equity goals requires the
efficient use of capital. We have financed our operations primarily with
internally generated cash flow.

Cash inflows historically come mainly from the profitability of the Company's
core services and investment products. For the last several years, profitability
has typically followed an annual cycle of relatively average profitability
during the first and third fiscal quarters, relatively low profitability during
the second fiscal quarter (when many Representatives and their clients are on
summer vacation), and relatively high profitability during the fourth fiscal
quarter (when many Representatives and their clients start a new business and
investment year).

Uncertainty in the financial markets can have a negative impact on cash flow.
The Company works to minimize this impact by aggressively recruiting
Sophisticated Representatives who can offer diversified products that continue
to meet the needs of their clients, despite changing market conditions.

The Company takes a proactive approach to minimizing, if not preventing, the
occurrence of other events that may lead to unexpected cash outflows, including
lawsuits, trade errors and fines from regulatory agencies such as the NASD or
the SEC. A key to this approach is ensuring that adequate controls over our
operations and those of our Representatives are implemented and periodically
updated. As part of this effort, substantial resources have been committed to
enhancing the capabilities of our compliance team members, whose tasks include
assuring that our Representatives give proper weight to the circumstances and
interests of their clients when recommending investment options. The Company
also allocates resources to stay current with the many rules and regulations
applicable to our business by assisting in the education and training of our
Representatives and staff.

As of September 30, 2006, cash and cash equivalents totaled $4.79 million as
compared to $7.72 million as of March 31, 2006. Working capital as of September
30, 2006 was $6.37 million as compared to $8.04 million as of March 31, 2006.
The ratio of current assets to current liabilities was 2.49 to 1 as of September
30, 2006 as compared to 2.70 to 1 as of March 31, 2006.

Operations used $0.18 million in cash for the six months ended September 30,
2006 as compared to $0.33 million in cash used for the six months ended
September 30, 2005. Cash flow from operations, in comparing the current period
to the prior period was relatively the same for the comparative periods.

In comparing cash flow from operating activities for September 30, 2006 to
September 30, 2005, we can see that operations decreased cash
flow by $0.83 million as a result of the net loss of $0.77 million for the
current period versus net income $0.06 million in the prior period. In addition,
we issued stock based compensation in the form of restricted stock which
resulted in a non-cash expense of $0.72 million.

Cash outflows from investing activities for the current period comprised of
$2.34 million of which $0.40 million was for purchasing equipment as well as
technology and leasehold improvements. Also we had cash outflows of $0.06
million used to grant loans to registered Representatives to help grow their
businesses. In conclusion we had a cash outflow of $1.98 million as a result of
investments in US Treasury Bills and Notes.

Finally, from financing activities we paid a $0.25 million cash dividend on June
29, 2006 to shareholders of record as of June 15, 2006.

By comparison, for the six months ended September 30, 2005, cash used in
investment activities comprised of cash outflows of $0.22 million for purchasing
equipment, technology, and leasehold improvements and $0.26 million used for
granting loans to registered Representatives.

Finally, in financing activities we paid a dividend of $0.12 million on May 16,
2005 to shareholders of record as of May 2, 2005.

<PAGE>

Cash Disbursements contributing significantly to decreases in our cash position
for the six months ended September 30, 2005 were as follows: a $0.68 million for
legal related matters, $0.20 million for loans to registered representatives,
and $0.21 million for prepayment of taxes.

Cash disbursements contributing significantly to cash outflows during our most
recent quarter included $0.58 million for legal related matters of which $0.41
million was for legal fees pertaining to the Massachusetts Proceedings.

Management anticipates that the current period net cash outflows are not
indicative of a future cash outflow trend but, rather, reflected payment on
legal defense for a complaint that is atypical of other legal proceedings made
towards the Company. However, those disbursements during the current quarter and
the year to date did have a significant impact on our brokerage firm's net
capital ratio.

The SEC Uniform Net Capital Rule (Rule 15c3-1) requires that ICC, our
Broker-Dealer subsidiary, maintain net capital of $100,000 and a ratio of
aggregate indebtedness to net capital (a "net capital ratio") not to exceed 15
to 1. Under the rule, indebtedness generally includes all money owed by a
company, and net capital includes cash and assets that are easily converted into
cash. SEC rules also prohibit "equity capital" (which, under the net capital
rule, includes subordinated loans) from being withdrawn, cash dividends from
being paid and other specified actions of similar effect from being taken, if,
among other specified contingencies, the Company's net capital ratio would
exceed 10 to 1 or if we would have less than 120% of our minimum required net
capital.

As of September 30, 2006 ICC had net capital of $.77 million (i.e., an excess of
$0.40 million) and a 7.09 to 1 net capital ratio as compared to net capital of
$.96 million (i.e., an excess of $0.53 million) and a 6.63 to 1 net capital
ratio as of March 31, 2006.

The Company's legal accrual increased to $0.66 million from $0.20 million as a
result of the Massachusetts Proceedings and various arbitrations filed against
the Company. During the current period the increase in our legal accrual
impacted ICC's net capital ratio and excess net capital. The Company does not
consider this to be a trend and does not currently anticipate that similar
accrual increases will be a recurring necessity. See Footnote 3 to our Condensed
Consolidated Financial Statements.

The Company currently has ample cash to cover additional accruals and
disbursements resulting from these other arbitrations and proceedings. Despite
these arbitrations and legal proceedings that increased our legal accrual, the
Company remains focused on committing their resources necessary for continued
growth.

In its role as Investment Advisor to the Eastern Point Advisors Funds Trust
family of mutual funds, Company disbursements to pay fund expenses that exceed
their respective ceiling caps averaged $0.18 a quarter during the duration of
the previous fiscal year. As previously noted, the Company agreed to terminate
its management contract with the Trust and, accordingly, the Company received a
relative cash flow infusion of $0.01 million for the six months ended September
30, 2006 versus a $0.39 million cash outflow for the six months ended September
30, 2005. See condensed Footnote 5 to our Condensed Consolidated Financial
Statements.

CONTRACTUAL OBLIGATIONS
<TABLE>
<CAPTION>
<S>                       <C>           <C>                 <C>                  <C>                <C>
Contractual Obligations                                      Payments Due by Period
---------------------------------------------------------------------------------------------------------------------------
Period                               April 1, 2006-March   April 1, 2007-March    April 1, 2010-March    April 1, 2012 and
                                          31, 2007             31, 2010                 31, 2012           thereafter
                            Total     less than 1 year         1-3 years                4-5 years          After 5 years
Fiscal Years Ended                          2007               2008-2010               2011-2012       2013 and thereafter
March 31,
---------------------------------------------------------------------------------------------------------------------------

short- term loans and
 notes payable:
  Lines of credit and
   other short- term
   borrowings             $ 12,064      $  12,064           $        0              $       0           $     0
Operating leases:          742,848        228,655              514,193                      0                 0

                         ------------------------------------------------
Total Contractual
 Obligations              $754,912      $ 240,719           $  514,193              $       0           $     0
                         ------------------------------------------------
</TABLE>

NOTES PAYABLE

At September 30, 2006 and 2005 notes payable consisted of debt to finance
insurance premiums. The annual rate of interest on the outstanding loan, which
matures on November 08, 2006, was 6.95% and 6.00%, respectively for September
30, 2006 and 2005.

COMMITMENTS AND CONTINGENCIES

The Company is obligated under various lease agreements covering offices and
equipment. These agreements are considered to be operating leases in accordance
with the requirements under FASB 13 "Accounting for Leases". The terms of the
leases expire between fiscal year 2007 and 2009. Options to renew for additional
terms are included under the lease agreements. The total minimum rental due in
future periods under these existing agreements is as follows as of September 30,
2006:

<PAGE>

                Year ending March 31, 2007                      $ 228,655
                Year ending March 31, 2008                        364,681
                Year ending March 31, 2009                        131,945
                Year ending March 31, 2010                         17,567
                                                                ---------
                Total minimum lease payments                     $742,848
                                                                =========

Certain leases contain provisions for minimum lease payments that are contingent
upon increases in real estate taxes. The total lease expenses amounted to $0.15
million for quarter ended September 30 2006 and $0.10 million for quarter ended
September 30 2005. The related party leases to Investors Realty, LLC amounted to
$0.09 million and $0.06 million, respectively for the quarters ended September
30 2006 and 2005.

The Company had total lease expenses of $0.30 million and $0.20 million for the
six months ended September 30, 2006 and 2005, respectively. The related party
leases to Investors Realty, LLC amounted to $0.18 million and $0.12 million,
respectively for the six months ended September 30 2006 and 2005.

RISK MANAGEMENT

Risk is an inherent part of the Company's business and activities. Risk
management is critical to the Company's financial strength and profitability and
requires robust auditing, constant communications, judgment and knowledge of
financial trends and the economy as a whole. Senior management takes an active
role in the risk management process. The principal risks involved in the
Company's business activities are market, operational, regulatory and legal.

MARKET RISK

Market risk is the risk attributable to common macroeconomic factors such as
gross domestic product, employment, inflation, interest rates, budget deficits
and sentiment. Consumer and producer sentiment is critical to our business. The
level of consumer confidence determines an investor's willingness to spend,
especially in the financial markets. It is this willingness to spend in the
financial markets that is key to our business. A shift in spending in this area
could negatively impact the Company. However, senior management is constantly
monitoring these economic trends in order to enhance the product line to offset
any potential negative impact.

OPERATIONAL RISK

Operational risk refers to the risk of loss resulting from the Company's
operations, including, but not limited to, improper or unauthorized execution,
processing of transactions, deficiencies in the Company's technology or
financial operating systems, and inadequacies or breaches in the Company's
control processes. Managing these risks is critical, especially in a rapidly
changing environment with increasing transaction volume. Failure to manage these
risks could result in financial loss to the Company. To mitigate these risks,
the Company has developed specific policies and procedures designed to identify
and manage operational risk. These policies and procedures are reviewed and
updated on a continuing basis to ensure that this risk is minimized.

REGULATORY AND LEGAL RISK

Regulatory and legal risk includes non-compliance with applicable legal and
regulatory requirements and the risk of a large number of customer claims that
could result in adverse judgments against the Company. The Company is subject to
extensive regulation in all jurisdictions in which it operates. In this regard,
the Company has instituted comprehensive procedures to address issues such as
regulatory capital requirements, sales and trading practices, use and
safekeeping of customer funds, credit granting, collection activities,
money-laundering, and record-keeping.

EFFECTS OF INFLATION

The Company's assets primarily are liquid in nature and are not significantly
affected by inflation. Management believes that the replacement cost of property
and equipment will not materially affect operating results. However, the rate of
inflation affects our expenses, including employee compensation and benefits,
communications, and occupancy, which may not be readily recoverable through
charges for services provided.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required by this item is contained in "Management's Discussion
and Analysis of Financial Condition and Results of Operations" under the caption
"Market Risk" of this Form 10-Q.

ITEM 4. CONTROLS AND PROCEDURES

<PAGE>

Based on an evaluation by our management in which they or persons performing
similar functions participated, our principal executive and financial officers
have concluded that reasonably effective controls and procedures were in place
as of the end of the period covered by this report to ensure that information
required to be disclosed in our reports filed under the Securities Exchange Act
of 1934 is recorded, processed, summarized and reported within the time periods
specified in the rules and forms of the Securities and Exchange Commission. No
changes in our internal control over financial reporting occurred during the
fiscal quarter covered by this report that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

ICC is required per the rules and regulations of the SEC and NASD (17A-5) AND
(17A-5G) to have adequate controls as a registered broker dealer and investment
advisor. These regulating bodies audit ICC on a regular basis and ensure that it
is in compliance with the rules for a broker dealer and investment advisor. In
ICC's annual financial statements presented to the states we supplementally
report on the adequacy of our internal controls.

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

By subpoena dated September 11, 2006 directed to the Chairman and CEO of ICH,
the Company became aware that the Massachusetts Securities Division (the
"Division") of the Secretary of the Commonwealth of Massachusetts (the "State")
has opened an investigation under the Massachusetts securities statutes
concerning the Company and its CEO. The Company believes that the investigation
concerns related transactions between the Company and/or its subsidiaries and a
company owned in part by the CEO of ICH. No complaint has been filed or any
relief sought by the Division to date. Accordingly, the Company cannot form an
opinion as to any likely outcome of the investigation or the materiality thereof
to the Company, its business, operations and financial results.

The Company operates in a highly litigious and regulated business and, as such,
is a defendant or codefendant in various lawsuits and arbitrations incidental to
its securities business. The Company is vigorously contesting the allegations of
the complaints in these cases and believes that there are meritorious defenses
in each. Counsel is unable to respond concerning the likelihood of an outcome,
whether favorable or unfavorable, because of inherent uncertainty routine in
these matters. For the majority of pending claims, the Company's errors and
omissions (E&O) policy limits the maximum exposure in any one case to between
$75,000 and $100,000 and, in certain of these cases, the Company has the
contractual right to seek indemnity from related parties. Management, in
consultation with counsel, believes that resolution of pending litigation will
not have a material adverse effect on the consolidated financial results of the
Company.

ITEMS 1A - 5. Not applicable.

ITEM 6.  EXHIBITS

Exhibit
Number          Description                                     Location
-------         -----------                                     --------

3.1             Articles of Organization, as amended               (2)(Exh. 3.1)

3.2             By-Laws                                            (2)(Exh. 3.2)

4.1             Form of Stock Certificate                          (2)(Exh. 4.1)

10.1            Employment Agreement with Theodore E. Charles     (2)(Exh. 10.1)

10.2            Employment Agreement with Timothy B. Murphy       (2)(Exh. 10.2)

10.3            The 1994 Stock Option Plan                        (3)(Exh. 10.3)

10.4            The 2005 Equity Incentive Plan                     (4)(Exh. 4.5)

31.1            Certification of Theodore E. Charles pursuant
                to Rule 13a-14(a)                                            (1)

31.2            Certification of Timothy B. Murphy pursuant
                to Rule 13a-14(a)                                            (1)

32.1            Certification of Theodore E. Charles pursuant
                to 18 U.S.C. Section 1350                                    (1)

32.2            Certification of Timothy B. Murphy pursuant
                to 18 U.S.C. Section 1350                                    (1)

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

(1)      Filed herewith.

(2)      Incorporated by reference to the indicated exhibit to the Registrant's
         Registration Statement on Form SB-2 (File No. 333-05327) filed August
         14, 2000.

(3)      Incorporated by reference to the indicated exhibit to the Registrant's
         Annual Report on Form 10-K for the year ended March 31, 2005.

(4)      Incorporated by reference to the indicated exhibit to the Registrant's
         Registration Statement on Form S-8 (File No. 333-43664) filed June 9,
         2006

Any exhibit not included with this Form 10-Q will be furnished to any
shareholder of record upon written request and payment of up to $.25 per page
plus postage. Such requests should be directed to Investors Capital Holdings,
LTD., 230 Broadway East, Lynnfield, MA 01940-2320.

<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.


                                        INVESTORS CAPITAL HOLDINGS, LTD.

                                        By:/s/ Timothy B. Murphy
                                           ---------------------
                                        Chief Financial Officer


                                        Date: November 14, 2006