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

     Form 10-Q

     INVESTORS CAPITAL HOLDINGS LTD - ICH
     Filed: August 13, 2004 (period: June 30, 2004)

     Quarterly report which provides a continuing view of a company's financial
     position

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


<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
          SIGNATURES
          CERTIFICATION




--------------------------------------------------------------------------------
<PAGE>


                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 June 30, 2004


                         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
                         Lynnfield, Massachusetts 01940
                    (Address of principal executive offices)

                                 (781) 593-8565
              (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 August 11,
2004:

                                  5,738,976


<PAGE>


PART I        FINANCIAL INFORMATION


ITEM 1.       FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
<S>                                                                  <C>             <C>
                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)

                                                                        June 30,        March 31,
                                                                          2004            2004
                                                                     --------------   -------------

Assets

Current Assets

     Cash and cash equivalents ....................................  $   8,273,392    $  8,112,567
     Deposit with clearing organization, restricted ...............        175,000         175,000
     Accounts receivable ..........................................      2,967,513       3,785,423
     Investments in available-for-sale securities .................         56,906          56,339
     Marketable securities, at market value .......................        114,126          17,422
     Prepaid expenses .............................................        278,150         310,270
                                                                     --------------   -------------
                                                                        11,865,087      12,457,021


Property and equipment, net .......................................        525,431         503,316


Long-Term Investments
     Equity investments, at cost ..................................         40,000          40,000
     Investment in unconsolidated affiliate .......................         87,311          85,820
                                                                     --------------   -------------
                                                                           127,311         125,820
Other Assets
     Other assets .................................................         71,980          99,295
     Deferred tax asset, net ......................................         68,004          69,721
     Receivables from officers ....................................         55,396          64,400
     Loans receivable from registered representatives .............         50,000          69,306
                                                                     --------------   -------------
                                                                           245,380         302,722

          TOTAL ASSETS ............................................  $  12,763,209    $ 13,388,879
                                                                     ==============   =============

Liabilities and Stockholders' Equity

Current Liabilities
     Accounts payable .............................................  $     704,396    $    570,236
     Accrued expenses .............................................        239,971         435,067
     Notes payable ................................................         45,482          78,999
     NASD settlement payable (current portion) ....................         50,572          54,375
     Commissions payable ..........................................      1,648,103       2,078,196
     Income taxes payable .........................................        191,598         582,721
     Securities sold, not yet purchased, at market value ..........        185,066          90,042
                                                                     --------------   -------------
                                                                         3,065,188       3,889,636

Long-Term Liabilities

     NASD settlement payable ......................................         84,867          94,304
                                                                     --------------   -------------
                                                                            84,867          94,304


          Total liabilities .......................................      3,150,055       3,983,940
                                                                     --------------   -------------
Commitments and contingencies

Stockholders' Equity:

     Common stock, $.01 par value, 10,000,000
      shares authorized;  5,732,450 issued and 5,728,565 outstanding
      in June 30, 2004;   5,731,598 issued and 5,727,713 outstanding
      in March 31, 2004.                                                    57,325          57,316
     Additional paid-in capital ...................................      8,524,552       8,520,931
     Retained earnings ............................................      1,048,686         844,670
       Less: Treasury stock, 3,885 shares at cost .................        (30,135)        (30,135)
     Accumulated other comprehensive income (loss) ................         12,726          12,157
                                                                     --------------   -------------

            Total stockholders' equity ............................      9,613,154       9,404,939
                                                                     --------------   -------------

           TOTAL LIABILITIES AND STOCKHOLDERS'
                EQUITY ............................................  $  12,763,209    $ 13,388,879
                                                                     ==============   =============

            See Notes to Condensed Consolidated Financial Statements.
</TABLE>

                                       1
<PAGE>


<TABLE>
<CAPTION>
<S>     <C>                                                         <C>              <C>
                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)

                                                                           Three Months Ended
                                                                                 June 30,
                                                                     ------------------------------
                                                                          2004             2003
Revenues:                                                            --------------   -------------
Commission, advisory & other fee income                              $  13,918,699    $  9,645,283
Marketing revenue, net                                                     304,779          (7,722)
Other income                                                                91,720          90,922
                                                                     --------------   -------------
Total Revenue                                                           14,315,198       9,728,483


Commission and advisory fees                                            11,572,118       8,094,941
                                                                     --------------   -------------
           Gross profit                                                  2,743,080       1,633,542
                                                                     --------------   -------------
Operating expenses:

   Advertising                                                             204,599         150,592
   Communications                                                          131,575          82,977
                                                                     --------------   -------------
Selling                                                                    336,174         233,569
                                                                     --------------   -------------

   Compensation and Benefits                                             1,324,607         969,768
   Regulatory, legal and professional                                      317,832         192,785
   Occupancy                                                               137,789         112,401
   Other administrative expenses                                           245,861         221,459
                                                                     --------------   -------------
Administrative                                                           2,026,089       1,496,413
                                                                     --------------   -------------
         Total Operating Expenses                                        2,362,263       1,729,982
                                                                     --------------   -------------
           Operating income(Loss)                                          380,817         (96,440)
                                                                     --------------   -------------
Other expense:

           Interest expense                                                 16,157           6,029
                                                                     --------------   -------------
           Total other expense                                              16,157           6,029
                                                                     --------------   -------------
Income (loss) before taxes                                                 364,660        (102,469)
Provision for income taxes(Benefit)                                        160,644         (19,027)
                                                                     --------------   -------------
           Net income (loss)                                         $     204,016    $    (83,442)
                                                                     ==============   =============

Earnings (loss) per common share
   Basic earnings per common share:                                  $         .04    $      ( .01)

  Diluted earnings (loss) per common share                           $         .03    $      ( .01)
                                                                     ==============   =============

Share data:

   Weighted average shares used in basic earnings per
     common share calculations                                           5,727,914       5,717,380
Plus:  Incremental shares from assumed exercise of stock options           196,993               -
                                                                     --------------   -------------
   Weighted average shares used in diluted earnings per
     common share calculations                                           5,924,907       5,717,380
                                                                     ==============   =============



            See Notes to Condensed Consolidated Financial Statements.

</TABLE>

                                       2
<PAGE>


<TABLE>
<CAPTION>
<S>                                               <C>         <C>        <C>         <C>        <C>       <C>            <C>
                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES

      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                    THREE MONTHS ENDED JUNE 30, 2004 AND 2003

                                   (UNAUDITED)

                                                                                                            Accumulated
                                                                         Additional  Retained                  Other
                                                    Common       Stock      Paid-In   Earnings  Treasury  Comprehensive
                                                  -----------  ---------   Capital   (Deficit)    Stock    Income (Loss)    Total
                                                    Shares       Amount
                                                  ----------------------------------------------------------------------------------


      Balance at April 1, 2003...................  5,721,265    $57,213  $8,169,292    $54,257  $(30,135)       ($1,987) $8,248,640

      Stock based compensation...................                            29,266                                          29,266

        Comprehensive loss:

             Net loss............................                                      (83,442)

             Net unrealized gain on securities...                                                                 5,345

                  Comprehensive loss.............                                                                           (78,097)

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

     Balance at June 30, 2003.................     5,721,265    $57,213  $8,198,558   $(29,185) $(30,135)        $3,358  $8,199,809
                                                  ==================================================================================

     Balance at April 1, 2004...................   5,731,598    $57,316  $8,520,931    844,670  $(30,135)       $12,157  $9,404,939

     Stock based compensation...................                              1,954                                           1,954

     Comprehensive gain:                                 852          9       1,667                                           1,676

             Net income............................                                    204,016

             Net unrealized gain on securities...                                                                   569

                  Comprehensive gain.............                                                                           204,585
                                                  ----------------------------------------------------------------------------------

    Balance at June 30, 2004.....................  5,732,450    $57,325  $8,524,552 $1,048,686  $(30,135)       $12,726  $9,613,154
                                                  ==================================================================================


            See Notes to Condensed Consolidated Financial Statements.
</TABLE>

                                       3
<PAGE>


<TABLE>
<CAPTION>
<S>  <C>                                                                              <C>            <C>
                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES

                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)



                                                                                         Three Months Ended
                                                                                               June 30,
                                                                                      --------------------------
                                                                                         2004           2003
                                                                                      -----------    -----------

Cash flows from operating activities:

     Net (loss) income...........................................................     $  204,016     $  (83,442)
     Adjustments to reconcile net income (loss) to net cash
      provided by operating activities:
         Depreciation and amortization...........................................         38,611         33,633
         Change in deferred taxes................................................          1,717          5,152
         Stock option compensation...............................................          1,954         29,266
         Change in marketable securities.........................................         (1,680)       (14,413)
         Unrealized (gain) loss on investment in unconsolidated affiliates.......         (1,491)       (11,706)

 Changes in operating assets and liabilities:
         Decrease in accounts receivable...............................                  817,910        114,126
         Decrease in receivables from officers, prepaid expenses and other assets         68,441         34,167
         Increase in income taxes receivable.....................................              -        (53,179)
         Increase in taxes payable...............................................       (391,123)             -
         (Decrease) increase in accounts payable and other liabilities...........        134,160         (7,938)
         (Decrease) increase in accrued expenses.................................       (195,096)       (23,793)
         Increase (decrease) in commissions payable..............................       (430,093)       104,797
                                                                                      -----------    -----------

             Net cash provided by operating activities.................                  247,326        126,670
                                                                                      -----------    -----------

Cash flows from investing activities:
     Purchases of property and equipment.........................................        (60,726)       (43,010)
     Decrease in loans receivable from registered representatives................         19,306         39,727
                                                                                      -----------    -----------

             Net cash used in investing activities..................                     (41,420)        (3,283)
                                                                                      -----------    -----------

Cash flows from financing activities:

     Exercise of stock options  ....................................                       1,676             --
     Payments on notes payable and NASD settlement..................                     (46,757)      (112,334)
                                                                                      -----------    -----------

             Net cash used in financing activities..................                     (45,081)      (112,334)
                                                                                      -----------    -----------

Net increase in cash and cash equivalents...........................                     160,825         11,053

Cash and cash equivalents, beginning of period......................                   8,112,567      7,090,643
                                                                                      -----------    -----------

Cash and cash equivalents, end of period............................                  $8,273,392     $7,101,696
                                                                                      ===========    ===========

Supplemental disclosures of cash flow information:
     Interest paid..................................................                  $   16,157     $    6,029
                                                                                      ===========    ===========
     Income taxes paid..................................................              $  550,000     $   29,050
                                                                                      ===========    ===========

            See Notes to Condensed Consolidated Financial Statements.
</TABLE>

                                       4
<PAGE>


                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                       FOR THE QUARTER ENDED JUNE 30, 2004

                                   (UNAUDITED)


1.   ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization

     Incorporated in July 1995, Investors Capital Holdings, Ltd. ("ICH") is a
financial services holding company that operates through its three subsidiaries,
Investors Capital Corporation, Eastern Point Advisors, Inc. and ICC Insurance
Agency, Inc. in two segments of the financial services industry. These two
segments provide for the offering of (1) services related to corporate equity
and debt securities, U.S. Government securities, municipal securities, mutual
funds, variable annuities, variable life insurance, market information, Internet
online trading and portfolio tracking, and records management and (2) financial
planning services, investment advisory and asset management services, and the
management of a retail mutual fund. These products and services are offered
primarily through our network of independent registered representatives
throughout the United States.


Basis of Presentation

          The accompanying unaudited condensed consolidated financial statements
     of Investors Capital Holdings, Ltd. (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
     period ending June 30, 2004 are not necessarily indicative of the results
     that may be expected for the year ended March 31, 2005. The balance sheet
     at March 31, 2004 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, 2004 filed with the
     Securities and Exchange Commission.

     Use of Estimates

          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.

                                       5
<PAGE>


2.   SEGMENT INFORMATION

          The Company's reportable segments include investment services offered
     through Investors Capital Corporation (ICC) and asset management services
     offered through Eastern Point Advisors, Inc. (EPA). This investment
     services segment includes 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 provides asset management and
     portfolio design services to a mutual fund and a variety of investors.

          The segment data presented includes the allocation of all corporate
     overhead to each segment. Intersegment revenue and expense, and receivables
     and payables, are eliminated between segments. Currently it is impractical
     to report segment information using geographical concentration.


          For the year ended March 31, 2004, management changed its approach in
     identifying reportable segments. Management concluded that its reportable
     segments are to be shown on a stand alone basis, in accordance with SFAS
     No. 131, "Disclosures about Segments of an Enterprise and Related
     Information", ("SFAS 131"). Specifically, as ICH does not generate
     operating revenue, other than interest income, and does not meet the
     quantitative tests under SFAS 131, management concludes that ICH does not
     meet the definition of a reportable segment. Previously reported segment
     information has been restated to reflect the new presentation and to
     preserve comparability.


     Segment reporting is as follows:

                                                          Three Months Ended
                                                               June 30,
                                                     ---------------------------
                                                         2004           2003
                                                     ------------   ------------

     Non-interest revenues:

       ICC, investment services .................... $13,736,735    $ 9,105,004
       EPA, asset management services...............     486,743        532,558
                                                     ------------   ------------

            Total........................            $14,223,478    $ 9,637,562
                                                     ============   ============

     Revenues from transactions with other operating
     segments:
       ICC...............................            $   336,605    $   164,810
       EPA...............................                 37,401         70,633
                                                     ------------   ------------

            Total........................            $   374,006    $   235,443
                                                     ============   ============

     Interest and dividend income:
       ICC...............................            $    52,295    $    42,013
       ICH...............................                 37,934         37,203
                                                     ------------   ------------

            Total........................            $    90,229    $    79,216
                                                     ============   ============

     Depreciation and amortization expense:
       ICC...............................            $    36,709    $    31,902
       EPA...............................                  1,901          1,731
                                                     ------------   ------------

            Total........................            $    38,610    $    33,633
                                                     ============   ============

                                       6
<PAGE>


                INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                       FOR THE QUARTER ENDED JUNE 30, 2004

                                   (UNAUDITED)


2.   SEGMENT INFORMATION (Continued)


                                                          Three Months Ended
                                                               June 30,
                                                     ---------------------------
                                                         2004           2003
                                                     ------------   ------------

     Income tax provision (benefit):

       ICC...............................            $   195,050    $    (4,114)
       EPA...............................                (58,003)       (50,317)
       ICH...............................                 23,597         35,404
                                                     ------------   ------------

            Total........................            $   160,644    $   (19,027)
                                                     ============   ============


     Income (loss):
       ICC...............................            $   274,359    $   (21,137)
       EPA...............................                (86,171)       (75,379)
       ICH...............................                 15,828         13,074
                                                     ------------   ------------

            Total........................            $   204,016    $   (83,442)
                                                     ============   ============

     Period end total assets:
       ICC...............................            $ 8,465,163    $ 5,128,081
       EPA...............................                460,290        583,478
       ICH...............................              5,616,141      5,617,143
       Corporate items and eliminations               (1,778,385)      (865,646)
                                                     ------------   ------------

            Total........................            $12,763,209    $10,463,056
                                                     ============   ============

3.   LITIGATION

     The Company is involved with various judicial, regulatory, and arbitration
proceedings concerning matters arising in connection with the conduct of its
business. At June 30, 2004, the Company was the co-defendant in several lawsuits
with claims of approximately $3.9 million. 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 $215,000 for the year ended June
30, 2004 related to legal fees and estimated probable settlement costs relating
to the Company's defense in various lawsuits


4.   STOCK BASED COMPENSATION

     The Company applies Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees, and related interpretations in accounting for its
stock option plans. During the first quarter of fiscal 2004, the Company adopted
the disclosure provisions of SFAS No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure. The following table illustrates the
effect on net earnings and earnings per share, had the Company adopted the fair
value-based method of accounting for stock-based employee compensation for all
periods presented.


                                       7
<PAGE>


                                                          Three Months Ended
                                                     ---------------------------
                                                         2004           2003
                                                     ------------   ------------


Net income (loss), as reported                       $   204,016    $   (83,442)

Deduct:  Total stock-based employee
compensation expense determined
under fair value-based method for
all awards, net of related tax
effects                                                       --          2,639
                                                     ------------   ------------
Pro forma net income(loss)                           $   204,016    $   (86,081)
                                                     ============   ============

Earnings per share:
    Basic- as reported                                    .04              (.01)
    Diluted-as reported                                   .03              (.01)

    Basic   - pro forma                                   .04              (.01)
    diluted - pro forma                                   .03              (.01)


ITEM 2. Management's Discussion and Analysis

     Management's discussion and analysis reviews our consolidated financial
condition as of June 30, 2004 and March 31, 2004, the consolidated results of
operations for the three months ended June 30, 2004 and 2003 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.

Overview

     We are a financial services holding company that, through our subsidiaries,
provides investment advisory, insurance, financial planning 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 of or by a multiple of these external factors.

     In addition, the passage of the Graham-Leach-Bliley Act in November of 1999
repealed depression-era laws that separated commercial, investment banking and
insurance activities. Such repeal may result in the intensification of the
environment in which we compete by increasing the number of companies doing
business in the financial services arena.

Critical Accounting Policies

     The condensed consolidated financial statements are prepared in accordance
with accounting principles generally accepted in the United States. The Company
believes that of its significant accounting policies, those described below
involve a high degree of judgment and complexity. These critical accounting
policies require estimates and assumptions that affect the amounts of assets,
liabilities, revenues and expenses reported in the consolidated financial
statements. Due to their nature, estimates involve judgment based upon available
information. Actual results or amounts could differ from estimates and the
difference could have a material effect on the condensed consolidated financial
statements. Therefore, understanding these policies is important in
understanding the reported results of operations and the financial position of
the Company.

Valuation of Securities and Other Assets

     Substantially all financial instruments are reflected in the consolidated
financial statements at fair value or amounts that approximate fair value, these
include: cash, cash equivalents, and securities purchased under agreements to
resell; deposits with clearing organizations; securities owned; and securities
sold but not yet purchased. Unrealized gains and losses related to these
financial instruments are reflected in net earnings or other comprehensive
income in accordance with FASB 115, depending on the underlying purpose of the
instrument. Where available, the Company uses prices from independent sources
such as listed market prices, or broker or dealer price quotations. Fair values
for certain derivative contracts are derived from pricing models that consider
current market and contractual prices for the underlying financial instruments
or commodities, as well as time value and yield curve or volatility factors
underlying the positions. In addition, even where the value of a security is
derived from an independent market price or broker or dealer quote, certain
assumptions may be required to determine the fair value. For instance, the
Company generally assumes that the size of positions in securities that the
Company holds would not be large enough to affect the quoted price of the
securities if the Company were to sell them, and that any such sale would happen
in an orderly manner. However, these assumptions may be incorrect and the actual
value realized upon disposition could be different from the current carrying
value.

                                       8
<PAGE>


The Company's private equity investments have been reported at cost pursuant to
Accounting Principles Board No.18 "The Equity Method of Accounting for
Investments in Common Stock ("APB 18") as the Company does not exercise
significant influence over these investments.



Reserves

     The Company records reserves related to legal proceedings in "accrued
expenses". The determination of these reserve amounts requires significant
judgment on the part of management. Management considers many factors including,
but not limited to: the amount of the claim; the amount of the loss in the
client's account; the basis and validity of the claim; the possibility of
wrongdoing on the part of an employee of the Company; previous results in
similar cases; and legal precedents and case law. Each legal proceeding is
reviewed with counsel in each accounting period and the reserve is adjusted as
deemed appropriate by management. Any change in the reserve amount is recorded
in the consolidated financial statements and is recognized as a charge/credit to
earnings in that period. The assumptions of management in determining the
estimates of reserves may be incorrect and the actual disposition of a legal
proceeding could be greater or less than the reserve amount.

Results of Operations

Three Months Ended June 30, 2004 compared with Three Months Ended June 30, 2003

Total revenue of $14.3 million increased by $4.6 million or 47.0% for the
quarter ended June 30, 2004, compared with total revenue of $9.7 million for the
quarter ended June 30, 2003. Consolidated commissions, advisory, and other fee
income of $13.9 million for the quarter ended June 30, 2004, increased by $4.3
million or 44.8%, compared with consolidated commissions, advisory, and other
fee income of $9.6 million for the quarter ended June 30, 2003. This increase
can be attributed primarily to a $4.3 million increase in revenues provided by
Investors Capital Corporation (ICC). Also, as a result of ICC obtaining dual
designation as an Investment Advisor (Investors Capital Advisors), Eastern Point
Advisors transferred approximately 73% of assets under management within the
Pershing Securities Managed Asset Plan Platform in March, 2004, which
contributed to ICC's increase in commission and advisory fee income for the
quarter ended June 30, 2004. Eastern Point Advisors (EPA) contribution was
relatively flat for the comparative periods. The overall increase was driven by
$2.4 million in commissions generated from the sale of mutual funds and variable
annuities during the quarter ended June 30, 2004. In addition, $1.9 million of
additional commissions was generated from the brokerage business and other fees.


     Net marketing revenues of approximately $305,000 increased by approximately
$313,000 for the quarter ended June 30,2004, compared to an approximate net
marketing loss of $8,000 for the quarter ended June 30,2003. This increase was
the result of Management's reporting the profitability of its preferred
marketing programs on an individual event basis as compared to a consolidated
event basis as reported during the same period ended June 30, 2003. Finally,
other income was relatively the same for quarter ended June 30,2004 when
compared to quarter ended June 30,2003.

     The significant increase in sales volume can be attributed to enhanced
marketing efforts in recruiting and business development. The marketing
department continues to focus its attention on attracting a sophisticated
representative who can provide a more diversified and broader product base to
clients. Additionally, the marketing team assisted the representatives in taking
advantage of current market conditions through various workshops, regional and
national meetings, and seminar training programs.

     Consolidated commissions and advisory fees of $11.6 million for the quarter
ended June 30,2004, increased by $3.5 million or 43.2% compared to $8.1 million
for the quarter ended June 30,2003. This change can be attributed to an increase
of $3.5 million in commission expenses incurred by ICC. Included in the $3.5
million increase was the net result of a trading error of approximately $363,000
that occurred on April 20, 2004. The increase in commission expense is the
direct result of an improvement in gross revenues as noted above. Cost of sales
increased proportionately with sales from commission, advisory and other fee
income on a percentage basis resulting in a comparative ratio of about
one-to-one, 83.1% in 2004 and to 83.9% in 2003.

     The Company realized consolidated operating income of approximately
$381,000 for the quarter ended June 30,2004, compared with an approximate
operating loss of $96,000 for the quarter ended June 30,2003. This 496.9%
increase in consolidated operating income is primarily the result of additional
business generated by the brokerage firm (ICC). This increase in operating
income came primarily from (ICC) as Eastern Point Advisors (EPA) had little or
no contribution to the increase.

     Operating income improved by about $477,000. Gross profit rose by over $1.1
million or 67.9% while selling and administrative expenses increased by a lesser
extent of approximately $632,000 or 36.6%. A breakdown of gross profit by
product type, depicting both the dollar and percentage contribution, is
presented in the following table:

                                       9
<PAGE>


<TABLE>
<CAPTION>
<S>                       <C>                     <C>              <C>              <C>             <C>
                                                     % of
                               Gross Profit         Gross Profit       2004-2003       June  2004      June  2004
  Product Type             $ increase (decrease)   increase change  % Margin Change  $ Gross Margin  % Gross Margin
------------------------------------------------------------------------------------------------------------------

Commissions-mutual               $315,268               28.4%             34.9%        $1,216,578            44.4%
funds &variable
annuities
------------------------------------------------------------------------------------------------------------------
Commissions-trading               142,985               12.9%             47.8%           442,774            16.1%
------------------------------------------------------------------------------------------------------------------
Commissions -Insurance             57,316                5.2%            457.2%            69,852             2.5%
Products
------------------------------------------------------------------------------------------------------------------
Commissions-
Underwriting                      (23,061)              (2.1)%           (97.5)%              600              --%
------------------------------------------------------------------------------------------------------------------
Advisory Services &               109,601                9.9%             43.9%           359,200             9.2%
Administration Fees
------------------------------------------------------------------------------------------------------------------
Licensing Revenue                 191,077               17.2%            307.0%           253,315            13.1%
------------------------------------------------------------------------------------------------------------------
Net Marketing Revenue             312,501               28.2%           4046.9%           304,779            11.1%
-----------------------------------------------------------------------------------------------------------------
Other Income &
Revenues                            3,851                 .3%            253.1%            95,982             3.6%
------------------------------------------------------------------------------------------------------------------
Total                          $1,109,538                100%              N/A         $2,743,080             100%
-------------------------------==========--------------======-----------======---------==========-------------====
</TABLE>


     As a percentage of the increase in gross profit, contributions from mutual
funds, variable products, and trading activities represented 41.3% of the total
increase while net marketing revenues comprised 28.2% of the increase. A margin
increase of $315,268 or 34.9% was realized from sales of mutual funds and
variable annuity products. Trading activities increased on a marginal basis by
$142,985 or 47.8% between quarters ended 2004 and 2003.

As a percentage of the June 30, 2004 gross profit, mutual funds and variable
annuity products constitute 44.4% of the overall profit margin while trading
activity represents 16.1%. The remainder of the profit margin is comprised of
advisory services, 9.2%; net marketing revenues, 11.1%; and licensing, insurance
products, underwriting and other income and revenues, 19.2%.

     Consolidated administrative expenses of approximately $2 million for the
quarter ended June 30, 2004 increased by approximately $530,000 or 35.3%,
compared with expenses of $1.5 million for quarter ended June 30, 2003. This
increase is a result of an approximate $355,000 increase in compensation and
benefits based on the acquisition of additional personnel to accommodate growth.
Regulatory, legal, and professional fees increased by approximately $125,000 or
about 65% due to added costs incurred for legal representation in litigation as
a result of increased volume in our business over the last couple of years.
Other administrative expenses increased by approximately $25,000 or 11.3% as a
result of the write off of bad debts.

     As another factor of growth, the ratio of administrative expenses to profit
margin has declined to 73.9% for the quarter ended June 30, 2004 from 91.6% for
the quarter ended June 30, 2003. The Company is benefiting from the use of fixed
costs applied to new business activity. Resources committed in technology and
web-based reporting has guided the automation process of the business. More
independent registered representatives are taking advantage of the technology.
Through trading technology, representatives can process their own trades. This
enables the brokerage firm to receive the benefits of "economies of scale" from
fixed trading costs. The Company is able to process more transactions while
maintaining stable administrative costs.

     Consolidated selling expenses were approximately $336,000 for the quarter
ended June 30, 2004, an amount that increased by over $100,000 or 43.6% from
$234,000 for the quarter ended June 30, 2003. This increase can be attributed to
a rise in advertising costs by over $54,000 and a rise in communication costs by
over $48,000.

     The increase in advertising related expenses were primarily the result of
an increase in travel related expenses of over $50,000. The increase in
communication expenses came from an approximate $20,000 increase in telephone
related expenses and an approximate $25,000 in printing costs to continue to
market our business in brokerage and advisory services and to promote our new
mutual fund, the Eastern Point Advisors Rising Dividend Growth Fund.

     ICC and EPA bear the administrative and selling expenses for ICH in the
form of management fees paid to ICH. These management fees, contained within the
following chart, have been eliminated during consolidation in the accompanying
financial statements. Based on a revised time study prepared by management, the
allocation of these expenses between subsidiaries has changed from a 30%
allocation to a 10% allocation, effective April 1,2004.

                               June 2004               June 2003
--------------------------------------------------------------------------------
ICC                            $336,605                 $164,810
--------------------------------------------------------------------------------
EPA                              37,401                   70,633
--------------------------------------------------------------------------------
Total                          $374,006                 $235,443
-------------------------------========-----------------========----------------

                                       10
<PAGE>


     The Company recorded consolidated income taxes of about $161,000 for the
quarter ended June 30, 2004, compared with an income tax benefit of about
$19,000 for the quarter ended June 30,2003. This increase of about $180,000 or
947.4% can be attributed to the Company's increased profitability during the
same period.

     The Company generated consolidated net income of over $204,000 for the
quarter ended June 30, 2004, compared with a net loss of about $83,000 for the
quarter ended June 30, 2003. This increase of over $287,000 or about 345% in net
income can be attributed to a rise in operating income over the same period
because of the growth of our various business lines. This fluctuation led to a
rise of income before taxes of over $467,000 or 457.8% percent for the quarter
ended June 30, 2004 when compared to quarter ended June 30,2003.

     The Company's improved profitability resulted primarily from ICC
operations. Total revenues increased considerably over the same period, which
led to a higher gross profit. In addition, operating expenses did not increase
proportionately with gross profit, resulting in improved net income. The
operational model the Company is investing resources in, makes substantial use
of technology which enables the Company to accommodate growth in revenue through
increased transaction processing without incurring incremental overhead.

Liquidity and Capital Resources

The Company believes that return on equity primarily is based on the use of
capital in an efficient manner. Historically, we have financed our operations
primarily through private equity and internally generated cash flow and not by
incurring debt.

     As of June 30, 2004, cash and cash equivalents totaled $8.3 million as
compared to $8.1 million as of March 31, 2004. Working capital as of June
30,2004 was $8.8 million as compared to $8.6 million as of March 31, 2004. Our
ratio of current assets to current liabilities was 3.84 to 1 as of June 30, 2004
as compared to 3.21 to 1 as of March 31, 2004.



     As of June 30, 2004, the net capital ratio for the broker-dealer was 2.63
to 1 as compared to a 2.38 to 1 for the fiscal year ended March 31, 2004. The
SEC Uniform Net Capital Rule (Rule 15c3-1) requires that we maintain a net
capital of $100,000 and a ratio of aggregate indebtedness to net capital not to
exceed 15 to 1. This SEC requirement is also referred to as the "net capital
ratio" or the "net capital 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 the subordinated loans from being withdrawn or cash
dividends from being paid if our net capital ratio would exceed 10 to 1 if we
would have less than our minimum required net capital. As of June 30, 2004, we
had net capital of $1.4 million as compared to net capital of $1.8 million as of
March 31,2004. This resulted in excess net capital of $1.2 million and $1.5
million, respectively, for the applicable periods.

     Net cash provided by operating activities was about $247,000 for the
quarter ended June 30, 2004 as compared to net cash provided in operating
activities of about $127,000 for the quarter ended June 30, 2003. The greater
than $120,000 increase in 2004 compared to 2003 resulted primarily from an
increase in net income and collections of accounts receivable offset by payments
to commissions payable and income taxes payable.

     Net cash used in investing activities increased by over $38,000 for period
ended June 30,2004 as compared to June 30,2003. The increase in cash used
resulted from the purchase of fixed assets and a decrease in cash collections
from the loans outstanding to registered representatives.

     Net cash used in financing activities decreased by over $67,000. The
decrease in cash used resulted from less financing of insurance policies on D&O,
employee liability, and fidelity bond.

Risk Management

     Risks are an inherent part of the Company's business and activities.
Management of these risks is critical to the Company's financial strength and
profitability and requires communication, 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 their 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 our product line
to offset any potential negative impact.

                                       11
<PAGE>


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 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 of and
safekeeping of customer funds, credit granting, collection activities,
money-laundering and record keeping.

Effects of Inflation

     The Company's assets are primarily 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

     Our Chief Executive Officer and Chief Financial Officer have concluded,
based on their evaluation within 90 days of the filing date of this report, that
our disclosure controls and procedures are effective for gathering, analyzing
and disclosing the information we are required to disclose in our reports filed
under the Securities Exchange Act of 1934. There have been no significant
changes in our internal controls or in other factors that could significantly
affect these controls subsequent to the date of the previously mentioned
evaluation.


PART II  OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

     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
uncertainties routine in these matters. Currently, there are various lawsuits
and/or arbitrations filed against the Company. For the majority of claims, the
Company's errors and omissions (E&O) policies limit the maximum exposure,
subject to policy limitations and exclusions, 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. As such, Management, in
consultation with counsel, believes that resolution of all such litigation is
not expected to have a material adverse effect on the consolidated financial
results of the Company.

                                       12
<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: August 13, 2004



                                       13
<PAGE>


                                  CERTIFICATION
                                  -------------

I, Theodore E. Charles, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Investors Capital
     Holdings, Ltd.;
2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;
3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;
4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          a)   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

          a)   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b)   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: August 13, 2004

By: /s/ THEODORE  E. CHARLES
----------------------------
Theodore E. Charles
Chief Executive Officer

                                       14
<PAGE>


                                  CERTIFICATION
                                  -------------

I, Timothy B. Murphy, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Investors Capital
     Holdings, Ltd.;
2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;
3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;
4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          a)   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

          a)   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b)   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: August 13, 2004

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


                                       15