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 March 31, 1997

               TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
               SECURITIES EXCHANGE ACT OF 1934

                        For the transition period from ______  to  ________

                            Commission file number 0-14772

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


                Florida                          58-1545984
     -------------------------------   ------------------------------------
     (State or other jurisdiction of   (I.R.S. Employer Identification No.)
     incorporation or organization)

       980 North Federal Highway - Suite 210
                Boca Raton, Florida                   33432
     ----------------------------------------       ----------
     (Address of principal executive offices)       (Zip Code)

       Registrant's telephone number, including area code  (407) 338-2600

     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 last 90 days.  Yes x  No 
                                       ---    ---
     Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date.

              Class                          Outstanding at May 8, 1997
---------------------------------------      ---------------------------
Common stock, $.001 par value per share             3,319,021<PAGE>
               JW CHARLES FINANCIAL SERVICES, INC.

                              INDEX
                                                                           Page
                                                                           ----
Part I. Financial Information

Item 1.  Financial Statements.

     Consolidated Condensed Statements of Financial Condition
        at March 31, 1997 and December  31, 1996                             3

     Consolidated Condensed Statements of Income for the Three
        Months Ended March 31, 1997 and 1996                                 4

     Consolidated Condensed Statements of Cash Flows for the
     Three Months Ended March 31, 1997 and 1996                              5

     Notes to Consolidated Condensed Financial Statements                    6

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                 8

Part II. Other Information

Item 1.  Legal Proceedings                                                  12

Item 6.  Exhibits and Reports on Form 8-K                                   12<PAGE>
<PAGE>
<TABLE>
<CAPTION>
                                      PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
----------------------------

                     JW CHARLES FINANCIAL SERVICES, INC. AND SUBSIDIARIES
                  CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION

                                                                              March 31,        December 31,
ASSETS                                                                          1997              1995 <F1>
                                                                             (Unaudited)
------                                                                      --------------------------------

<S>                                                                         <C>                <C>
Cash and cash equivalents                                                   $  9,471,000       $ 11,836,000
Commissions and other receivables from clearing brokers                        2,733,000          2,203,000
Receivable from customers, net                                                95,458,000         98,610,000
Receivable from brokers and dealers                                            2,493,000          3,689,000
Securities owned, at market value                                              6,398,000          5,308,000
Furniture, equipment and leasehold improvements, net of
     accumulated depreciation and amortization of $1,237,000 and
     $1,162,000                                                                1,442,000          1,194,000
Deferred tax asset                                                             1,735,000          1,719,000
Other, net                                                                     2,831,000          2,772,000
                                                                            -------------------------------
                                                                            $122,561,000       $127,331,000
                                                                            ===============================
LIABILITIES, MANDATORILY REDEEMABLE COMMON STOCK AND
----------------------------------------------------
STOCKHOLDERS' EQUITY
---------------------
Liabilities:
Short-term borrowings from banks                                            $ 31,870,000        $ 17,375,000
Accounts payable, accrued expenses and other liabilities                       8,764,000          10,441,000
Payable to customers                                                          25,809,000          50,898,000
Payable to brokers and dealers                                                29,767,000          24,136,000
Securities sold, not yet purchased, at market value                            1,018,000             450,000
Notes payable to affiliates                                                    8,375,000           8,625,000
Income taxes payable                                                             574,000              34,000
                                                                            --------------------------------
                                                                             106,177,000         111,959,000
                                                                            --------------------------------

Commitments and  contingencies

Stockholders' equity:
Preferred stock, $.001 par value - authorized 5,000,000 shares
   no shares issued or outstanding                                                -                        -
Common stock, $.001 par value - authorized 9,056,000 shares
    issued and outstanding 3,319,021 and 3,230,436                                 3,000               3,000
Additional paid-in capital                                                       821,000             821,000
Retained earnings                                                             15,560,000          14,548,000
                                                                            --------------------------------
Total stockholders' equity                                                    16,384,000          15,372,000
                                                                            --------------------------------
                                                                            $122,561,000        $127,331,000
                                                                            ================================
<FN>
<F1> - Derived from audited financial statements contained in Registrant's
       Annual Report on Form 10-K for the fiscal year ended December 31, 1996.
</FN>
</TABLE>
      (The accompanying Notes to Consolidated Condensed Financial Statements
           are an integral part of these financial statements.)

                                     Page 3<PAGE>
<PAGE> 
                          JW CHARLES FINANCIAL SERVICES, INC. AND SUBSIDIARIES
                             CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                          ----------------------------------------------------
                                               (Unaudited)

<TABLE>
<CAPTION>
                                                                                    Three Months Ended March 31,
                                                                                 ------------------------------
                                                                                    1997                1996
                                                                                 -------------------------------
<S>                                                                              <C>                 <C>
REVENUES:
Commissions                                                                      $11,538,000         $10,168,000
Market making and principal transactions, net                                      4,646,000           5,436,000
Interest                                                                           2,334,000           2,160,000
Clearing fees                                                                      1,808,000           1,631,000
Other                                                                              1,806,000           1,616,000
                                                                                 -------------------------------
                                                                                  22,132,000          21,011,000
                                                                                 -------------------------------
EXPENSES:
Commissions and clearing costs                                                    11,558,000          11,308,000
Employee compensation and benefits                                                 4,155,000           3,573,000
Selling, general and administrative                                                3,849,000           3,846,000
Interest                                                                             985,000             878,000
                                                                                 -------------------------------
                                                                                  20,547,000          19,605,000
                                                                                 -------------------------------
Income before income taxes                                                         1,585,000           1,406,000
Provision for income taxes                                                           573,000             544,000
                                                                                 -------------------------------
Net income                                                                        $1,012,000            $862,000
                                                                                 ===============================
EARNINGS PER COMMON SHARE:
Net income                                                                             $0.29               $.14
                                                                                 ===============================

Weighted average number of common shares outstanding                               3,505,000           6,079,500
                                                                                 ===============================
</TABLE>

(The accompanying Notes to Consolidated Condensed Financial Statements
        are an integral part of these financial statements.)

                               Page 4<PAGE>
<PAGE>

                          JW CHARLES FINANCIAL SERVICES, INC. AND SUBSIDIARIES
                             CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                          ----------------------------------------------------
                                               (Unaudited)

<TABLE>
<CAPTION>
                                                                                  Three Months Ended March 31,
                                                                                  ----------------------------
                                                                                      1997             1996
                                                                                  ----------------------------
<S>                                                                                <C>              <C>
OPERATING ACTIVITIES
  Net income                                                                       $1,012,000          $862,000
  Adjustments to reconcile net income to net
    cash provided (used) by operating activities:
   Depreciation and amortization                                                       75,000            66,000
  Change in operating assets and liabilities:
   Commissions and other receivables from clearing brokers                           (530,000)       (1,697,000)
   Receivable from customers                                                        3,152,000        (4,952,000)
   Receivable from brokers and  dealers                                             1,196,000         1,611,000
   Securities owned                                                                (1,090,000)          460,000
   Deferred tax asset                                                                 (16,000)          130,000
   Other assets                                                                       (59,000)         (736,000)
   Accounts payable, accrued expenses and other liabilities                        (1,677,000)          636,000
   Payable to customers                                                           (25,089,000)        5,779,000
   Payable to brokers and dealers                                                   5,631,000         3,973,000
   Securities sold, not yet purchased                                                 568,000        (2,318,000)
   Income taxes payable                                                               540,000           393,000
                                                                                  -----------------------------
   Net cash provided (used) by operating activities                               (16,287,000)        4,207,000
                                                                                  -----------------------------
INVESTING ACTIVITIES
Purchases of furniture, equipment and leasehold improvements                         (323,000)          (65,000)
                                                                                  -----------------------------
FINANCING ACTIVITIES
Change in short-term borrowings from banks                                         14,495,000        (3,132,000)
Change in notes payable to affiliate                                                 (250,000)         (250,000)
                                                                                  -----------------------------
Net cash provided (used) by financing activities                                                     (3,382,000)
                                                                                  -----------------------------
Net (decrease) increase in cash and cash equivalents                               (2,365,000)          760,000

Cash and cash equivalents at beginning of period                                   11,836,000         8,597,000
                                                                                  -----------------------------
Cash and cash equivalents at end of period                                         $9,471,000        $9,357,000
                                                                                  =============================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for income taxes                                               $0                $0
                                                                                  =============================
Cash paid during the period for interest                                             $985,000          $878,000
                                                                                  =============================

</TABLE>
(The accompanying Notes to Consolidated Condensed Financial Statements
      are an integral part of these financial statements.)

                                Page 5<PAGE>
<PAGE>
           JW CHARLES FINANCIAL SERVICES, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
           ----------------------------------------------------
                               (Unaudited)

1. BASIS OF PRESENTATION
The interim financial information included herein is unaudited; however,
such information reflects all adjustments which are, in the opinion of
management, necessary for a fair presentation of the periods indicated.

The accompanying consolidated condensed financial statements include the
accounts of the Company and its subsidiaries. Certain information and
footnote disclosures normally included in financial statements prepared
in conformity with generally accepted accounting principles have been
condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission.  These consolidated condensed
financial statements should be read in conjunction with the consolidated
financial statements and related notes contained in the Company's 1996
Annual Report on Form 10-K.

Because of seasonal and other factors, the results of operations for the
three month period ended March 31, 1997 is not necessarily indicative of
the results of operations to be expected for the fiscal year ending
December 31, 1997.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts
JW Charles Financial Services, Inc. and its subsidiaries which are:
Corporate Securities Group, Inc. ("CSG"), JW Charles Securities, Inc.
("JWC Securities"), JW Charles Clearing Corp. ("JWC Clearing"), CMG
Capital Corp., First Investors Life Agency, Inc. DMG Securities, Inc.
(("DMG") and Discount Securities Group, Inc.  All significant intercompany
transactions have been eliminated in consolidation.

RECLASSIFICATIONS
Certain amounts in the prior period's financial statements have been
reclassified to conform to the current period's presentation.  These
reclassifications are not material to the consolidated financial
statements.

3. CONTINGENCIES
The Company is involved in various claims and possible actions arising
out of the normal course of its business.  Although the ultimate outcome
of these claims cannot be ascertained at this time, it is the opinion of
the Company based on knowledge of facts and advice of counsel, that the
resolution of such actions will not have a material adverse effect on the
Company's financial condition and results of operations.

4. NET CAPITAL
The broker-dealer subsidiaries of the Company are subject to the
requirements of Rule 15c3-1 under the Securities Exchange Act of 1934. 
This rule requires that aggregate indebtedness, as defined, not exceed
fifteen times net capital, as defined.  Rule 15c3-1 also provides for an
"alternative net capital requirement" which, if elected, requires that
net capital be equal to the greater of $250,000 or two percent of
aggregate debit items computed in applying the formula for determination
of reserve requirements.  The New York Stock Exchange ("NYSE") may
require a member organization to reduce its business if its net capital
is less than four percent of aggregate debit items and may prohibit a
member firm from expanding its business if its net capital is less than
five percent of aggregate debit items.  At March 31, 1997, the net
capital positions of the Company's broker-dealer subsidiaries were as
follows:<PAGE>
JWC Clearing (alternative method elected):
     Net capital as a percent of aggregate debit items      12.4%
     Net capital                                      $12,686,000
     Required net capital                              $2,049,000

CSG:
     Ratio of aggregate indebtedness to net capital         2.51
     Net capital                                      $1,327,000
     Required net capital                               $250,000

                               6<PAGE>
4. NET CAPITAL (cont.)

JWC Securities:
     Ratio of aggregate indebtedness to net capital        1.46
     Net capital                                     $1,834,000
     Required net capital                              $250,000

DMG:
     Ratio of aggregate indebtedness to net capital         .50
     Net capital                                       $367,000
     Required net capital                              $100,000


5.  NEW ACCOUNTING PRONOUNCEMENT

In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which
is effective for financial statements ending after December 15, 1997.  SFAS
No. 128 simplifies the guidance for computing earnings per share ("EPS")
and replaces the presentation of primary and ully diluted EPS with basic
and diluted EPS.

Basic EPS excludes dilution related to incremental shares and is computed by
dividing net income available to common stockholders by the weighted-average
number of common shares outstanding for the period.  Diluted EPS includes
incremental shares.

Presented below is basic and diluted EPS under SFAS No. 128 compared with
primary and fully diluted EPS for the first quarters of 1997 and 1996:

<TABLE>
<CAPTION>

         PRO FORMA SFAS NO. 128:                            Three Months Ended March 31,
                                                             1997             1996
                                                            -----            -----
         <S>                                                <C>              <C>
         Basic                                              $0.31            $0.15
         Diluted                                            $0.29            $0.14

         AS CURRENTLY REPORTED:

         Earnings Per Share                                 $0.29            $0.14
</TABLE>

                               7<PAGE>
Item 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations
          ---------------------------------------------

RESULTS OF OPERATIONS

     THREE MONTHS ENDED MARCH 31, 1997 (THE "1997 PERIOD") VS. 1996 (THE
     "1996 PERIOD")

<TABLE>
<CAPTION>
                                                             Three Months Ended March 31,
                                                -----------------------------------------------------------
                                                 1997                      1996                     1995
                                                (000's)      % Change     (000's)       % Change    (000's)
                                                ------------------------------------------------------------
     <S>                                        <C>              <C>     <C>              <C>     <C>
     Revenues:
     Commissions                                $11,538          13       $10,168         31       $7,744
     Market making and principal
       transactions, net                          4,646         -15        5,436          16        4,706
     Interest                                     2,334           8        2,160          58        1,370
     Clearing fees                                1,808          11        1,631          11        1,464
     Other                                        1,806          12        1,616          96          826
                                                ---------------------------------------------------------
                                                $22,132           5      $21,011          30      $16,110
                                                =========================================================

<CAPTION>
                                                             Three Months Ended March 31,
                                                ---------------------------------------------------------
                                                 1997                     1996                     1995
                                                (000's)      % Change    (000's)    % Change      (000's)
                                                ---------------------------------------------------------
     Expenses:
     Commissions and clearing costs             $11,558           2       $11,308         36       $8,302
     Employee compensation and benefits           4,155          16         3,573          3        3,459
     Selling, general and administrative          3,849           -         3,846         23        3,133
     Interest                                       985          12           878         80          488
                                                ---------------------------------------------------------
                                                $20,547           5       $19,605         27      $15,382
                                                =========================================================

<CAPTION>
                                                             Three Months Ended March 31,
                                                ---------------------------------------------------------
                                                                                                        
                                                 1997        % Change     1996      % Change       1995  
                                                ---------------------------------------------------------
     Clearing Factor                               71%            -1       72%          7            67%
                                                =========================================================

</TABLE>

     Total revenues of $22,132,000 recorded in the 1997 Period increased
by 5% compared to last year's $21,011,000.  During the 1997 Period the
Company experienced increases in all revenue categories except for market
making and principal transactions, net.  The decrease in this revenue
category is attributed a continuing reduction in the spreads on stock
traded in the over the-counter marketplace and the success of the
Company's efforts to further limit its dependence on this segment of the
business.  Growth in the various other revenue categories was primarily
due to heightened client activity in both the Company's retail and
clearing businesses.<PAGE>
     Commissions and clearing costs, which represent the portion of fee
income payable by the Company to registered representatives or other
broker-dealers as a result of securities transactions (and the related
costs associated with the execution of such trades) increased reflecting
the Company's overall business growth.  Commissions and clearing costs as
a percentage of commissions and market making and principal transactions,
net (the "Clearing Factor"), decreased slightly to approximately 71% in
the 1997 Period as compared to 72% in the 1996 Period.

     The Company believes that its Clearing Factor is representative of
the prevailing experience in the industry, although sufficient industry
data is not available to make a precise comparison.  The major component,
however, is commission rates, and the Company's commission rates for its
independent affiliated branch office registered representatives and its
in-house employee registered representatives are comparable with that
paid by other firms in the securities brokerage industry (typically
ranging from 80% to 90%, before clearing charges are assessed, for
registered representatives, in affiliated branch offices and 30% to 50%
for its in-house employee registered representatives, depending upon
production levels).  Affiliated branch office registered representatives
(who are not employees of the Company, and who comprise the majority of
the Company's registered representatives) receive higher commissions from
the Company than registered representatives who are Company employees,

                               8<PAGE>

which reflects that each affiliated branch office is responsible for its
own overhead.  Accordingly, the Company's overhead attributable to non-
employee registered representatives is less than the overhead
attributable to the Company's employee registered representatives.  As a
result, the Company's margin is not adversely affected by engaging
additional affiliated branch office, non-employee registered
representatives (and paying them higher commissions) as opposed to hiring
in-house employee registered representatives. 

     Employee compensation and benefits increased by 16% from $3,573,000
to $4,155,000.  This increase is primarily the result of two factors: (i)
expansion of the Company's New York City branch office in the first
quarter of 1997 and (ii) increased performance bonuses resulting from the
increase in the Company's net income.

LIQUIDITY AND CAPITAL RESOURCES

     The Company maintains a highly liquid balance sheet with the
majority of the Company's assets consisting of securities owned, which
are marked to market, and receivables from customers arising from
customer related securities transactions.  Receivables from customers
consist primarily of collateralized customer margin loans and securities
borrowed, which are typically secured with marketable corporate debt and
equity securities. The nature of the Company's business as a market maker
and securities dealer requires it to carry significant levels of
securities inventories in order to meet its customer and internal trading
needs.  Additionally, the Company's role as a financial intermediary for
customer activities, which it conducts on a principal basis, results in
significant levels of customer related balances.  Accordingly, the
Company's total assets and financial leverage can fluctuate significantly
depending largely upon general economic and market conditions, volume of
activity, customer demand and underwriting commitments.  The Company's
ability to support increases in its total assets is a function of its
ability to generate funds internally and obtain short-term borrowings
from banks.

     At March 31, 1997, the Company had stockholders' equity of
$16,384,000, representing an increase of $1,012,000 from December 31,
1996, and the Company had cash and cash equivalents of $9,471,000.  The
Company also has an aggregate of $5,000,000 of borrowing capacity under
comitted bank lines of credit described below.

     The Company believes that its current borrowing arrangements (which
are discussed below), combined with anticipated levels of internally
generated funds, will be sufficient to fund its financial requirements
for the foreseeable future  based on the Company's current level of
operations and certain assumptions relating to the Company's business and
planned growth.  Should the Company significantly expand either its
market making activities or its underwriting of securities on a "firm-
commitment" basis, however, the Company may need to obtain additional
capital to support such activities and to comply with regulatory
requirements.  The Company is not dependent upon raising additional
capital in order to maintain its current levels of operations, and
therefore does not propose to raise additional capital unless it is
available on acceptable terms.  If the Company should find that its
ability to generate funds internally is insufficient to satisfy its
future capital needs, the Company will require additional financing from
outside sources.


COMITTED BANK LINES OF CREDIT

     On January 19, 1996, the Company obtained an unsecured
$2,500,000 revolving line of credit from Wilmington Trust Company<PAGE>
for general corporate purposes (the "Wilmington Facility").  The
Wilmington Facility matures on December 31, 2002, at which time
all outstanding borrowings plus all accrued and unpaid interest
will become due and immediately payable.  Borrowings under the
Wilmington Facility bear interest at Wilmington's National
Commercial Rate, with interest payments due monthly in arrears. 
The Company is required to maintain certain debt covenants,
including (i) minimum stockholders' equity equal to at least
$7,000,000, plus 30% of net income for all future fiscal
quarters, plus 75% of the net proceeds from any common stock
issuances and (ii) net income, as defined, in excess of
$1,500,000 for any four quarters within any consecutive six-
quarter period.  At May 14, 1997, there was no balance
outstanding under the Wilmington Facility.

     In connection with the Wilmington Facility, the Company
entered into a Marketing Agreement with Wilmington Trust FSB (the
"Wilmington Marketing Agreement") and granted W T Investments,
Inc. a warrant to purchase, giving effect to adjustments for the
Company's 3-for-2 stock split, up to 600,000 shares of the
Company's common stock at any time prior to December 31, 2002
(the "Wilmington Warrant").  The exercise price per share, as
adjusted for the stock split, is the greater of $3.67 or an
amount equal to the sum of total (i) gross revenues multiplied by
 .175 plus (ii) earnings before tax multiplied by 2.5 and divided
by the weighted average number of common shares outstanding based
upon the Company's audited financial statements.  At March 31,
1997, the Wilmington Warrant exercise price per share was

                               9<PAGE>
approximately $11.00.  The Wilmington Marketing Agreement
provides that the Company will market certain products and
services, initially personal trust and asset management services,
provided by Wilmington Trust FSB to the Company's brokers,
clients and prospects.

     On December 18, 1996, the Company obtained an unsecured
$2,500,000 revolving line of credit from SunTrust Bank, South
Florida, N.A. for general corporate purposes (the "SunTrust
Facility").  The SunTrust Facility matures on April 30, 1999, at
which time all outstanding borrowings plus all accrued and unpaid
interest will become due and immediately payable.  Borrowings
under the SunTrust Facility bear interest at the prime rate of
interest as announced from time to time by SunTrust Banks of
Florida, Inc., with interest payments due quarterly in arrears. 
The Company is required to maintain certain debt covenants,
including (i) minimum stockholders' equity equal to at least
$9,000,000, plus 75% of net income for all future fiscal
quarters, plus 75% of the net proceeds from any common stock
issuances and (ii) net income, as defined, in excess of
$1,500,000 for any four quarters within any consecutive six-
quarter period.  At May 14, 1997, there was no balance
outstanding under the SunTrust Facility.

     In connection with the SunTrust Facility, the Company
entered into a Marketing Agreement with SunTrust (the "SunTrust
Marketing Agreement") and granted SunTrust Banks, Inc. a warrant
to purchase, giving effect to adjustments for the Company's 3-
for-2 stock split, 37,500 shares of the Company's common stock at
any time prior to December 31, 2002.  The exercise price per
share, as adjusted for the stock split, is $6.67.  The SunTrust
Marketing Agreement provides that the Company will market certain
products and services, through the Company's participation as an
underwriter or selling group member of various municipal finance
offerings underwritten by SunTrust Capital Markets, Inc., to the
Company's brokers, clients and prospects.


GILMAN/CMG OBLIGATIONS AND OTHER

     From December 1992 until June 11, 1996 (when the Company
accelerated its repurchase of the shares of common stock held by
GCMG), Gilman CMG, Inc. or its affiliates (collectively "GCMG")
had owned up to 49% of the Company's outstanding common stock,
and the Company had borrowed an aggregate of $5,000,000 from
GCMG.  On May 15, 1995, as part of a transaction for the
Company's repurchase over time of its common stock owned by GCMG, 
the Company and GCMG entered into a loan agreement (the "Gilman
Loan") that converted the Company's then outstanding indebtedness
to GCMG to a $5,000,000 term loan, bearing interest at a rate of
10% per annum. At March 31, 1997 and December 31, 1996,
$2,250,000 and $2,500,000, respectively, were outstanding under
the Gilman Loan with principal payable in equal quarterly
installments of $250,000 due on January 15, April 15, July 15 and
October 15, of each year until paid in full.  Interest accrues on
the principal outstanding from time to time and is payable
quarterly on the same dates that principal payments are required. 
The Company has the option to prepay principal, in whole or in
part at any time, without premium or penalty.

     As part of the May 15, 1995 transaction, the Company entered
into a Stock Repurchase Agreement (the "Old Agreement") with GCMG
to repurchase all of the Company's common stock then held by GCMG
in amounts each year, beginning April 15, 1996, equal to 50% of
annual net income, as defined, until all the GCMG stock was<PAGE>
repurchased.  In connection with this transaction, the Company
reclassified $5,978,000, representing $2.08 per share of the
stock owned by GCMG, from additional paid-in capital and retained
earnings to mandatorily redeemable common stock to reflect the
terms of the Old Agreement.  The difference between the initially
recorded cost of the mandatorily redeemable common stock and the
adjusted purchase price was accreted to mandatorily redeemable
common stock through a direct charge to retained earnings.

     On June 11, 1996, the Company entered into an Amended and
Restated Stock Repurchase Agreement (the "New Agreement") with
GCMG for, and simultaneously consummated, the repurchase of all
of the Company's shares of common stock owned by GCMG and subject
to the Old Agreement.  Effective as of April 15, 1996, the
Company had repurchased 473,265 shares of common stock from GCMG
pursuant to the Old Agreement, which was amended and restated by
the New Agreement to accelerate the repurchase by the Company for
the remaining 2,400,599 shares of common stock owned by GCMG. 
The total consideration paid by the Company consisted of a
promissory note in the principal amount of $6,125,000 (the "New
Loan"), along with the $1,155,000 in cash that was paid to GCMG
in connection with the April 15, 1996 installment purchase under

                                10<PAGE>
the Old Agreement.  The New Loan bears interest, which is payable
quarterly, at a rate of 10% per annum.  Beginning April 15, 1997,
the Company is obligated to make principal payments each year in
an amount equal to 50% of annual net income, as defined, until
the New Loan is repaid in full.  The New Loan contains a balloon
payment feature requiring, without regard to the above formula,
that the entire outstanding principal balance be repaid in full
on April 15, 2000.  The New Loan is prepayable, in whole or in
part, at any time by paying GCMG a prepayment penalty equal to
10% of the prepayment amount.  Simultaneous with the execution of
the New Agreement, $6,125,000 was reclassified from mandatorily
redeemable common stock to notes payable to affiliate. At May 14,
1997, $3,612,500 was outstanding under the New Loan.

         In its capacity as a co-general partner in an affiliated real estate
limited partnership, the Company has guaranteed certain partnership
indebtedness.  Additionally, under applicable partnership law, as a co-
general partner, the Company is contingently liable for any obligations
of such limited partnership that remain unpaid after any dissolution of
the partnership.  The Company has not made any provision in its financial
statements for the possible effect on the Company's financial condition
of the above guarantees or the Company's contingent liability as a co-
general partner of its affiliated partnership.  The Company does not
expect to incur any significant losses or obligations that may materially
affect the Company's liquidity or financial condition as a result of
these matters.

IMPACT OF INFLATION

     Although the precise effect of inflation on the present operations
of the Company cannot accurately be determined, management believes that
continuation of the general levels of inflation experienced in recent
years will not have a significant impact on the Company's current and
contemplated operations.



                               11<PAGE>
                          II - OTHER INFORMATION

Item 1.   Legal Proceedings
---------------------------------

     There are no material legal proceedings pending or threatened in
which the Company is party or of which the Company's property is the
subject.  The Company has been named in various arbitration and legal
proceedings arising in the ordinary course of its securities brokerage
business.  Although arbitration and litigation involves contingencies
that cannot be definitively predicted, including the unpredictability of
actions that might be taken by an arbitration panel or jury on matters
that are submitted to them, the Company expects that the ultimate
disposition of arbitration and litigation arising from the ordinary
course of business will not have a material adverse impact upon its
financial position and results of operations.

Item 6.   Exhibits and Reports on Form 8-K

     (a) Exhibits:
          Exhibit 27 - Financial Data Schedule (for SEC use only)
         (b) Reports on Form 8-K:
                 None.


                               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.


                                        JW CHARLES FINANCIAL SERVICES, INC.




Date: May 14, 1997                            /s/ Marshall T. Leeds
                                  (Marshall T. Leeds, President and Chief
                                              Executive Officer)
                                           (Duly Authorized Officer)


Date: May 14, 1997                           /s/ Joel E. Marks
                                  (Joel E. Marks, Principal Financial and
                                            Accounting Officer)