UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                FORM 10-Q

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

            For the quarterly period ended September 30, 1996

     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 310
          Boca Raton, Florida                        33432
     ---------------------------------------      ----------
     (Address of principal executive offices)     (Zip Code)

    Registrant's telephone number, including area code  (561) 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 November 1, 1996
---------------------------------------   -------------------------------
Common stock, $.001 par value per share           2,001,899<PAGE>
                   JW CHARLES FINANCIAL SERVICES, INC.

                                  INDEX

Part I. Financial Information

Item 1.  Financial Statements.

     Consolidated Condensed Statements of Financial Condition
        at September 30, 1996 and December 31, 1995                        3

     Consolidated Condensed Statements of Income for the Three Months
        Ended September 30, 1996 and 1995                                  4

     Consolidated Condensed Statements of Income for the Nine Months
        Ended September 30, 1996 and 1995                                  5

     Consolidated Condensed Statements of Cash Flows for the
        Nine Months Ended September 30, 1996 and 1995                      6

     Notes to Consolidated Condensed Financial Statements                  7

Item 2.  Management's Discussion and Analysis of Financial
        Condition and Results of Operations                                9

Part II. Other Information

Item 1.  Legal Proceedings                                                 15

Item 6.  Exhibits and Reports on Form 8-K                                  15<PAGE>
                               PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
----------------------------

                 JW CHARLES FINANCIAL SERVICES, INC. AND SUBSIDIARIES
               CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>

                                                                              September 30,      December 31,
                                                                                   1996            1995<F1> 
                                                                               (Unaudited)
 ASSETS
 ------                                                                       --------------------------------
 <S>                                                                          <C>               <C>
 Cash and cash equivalents                                                    $   8,918,000     $   8,597,000
 Commissions and other receivables from clearing brokers                          4,910,000         2,750,000
 Receivable from customers, net                                                  89,531,000        81,438,000
 Receivable from brokers and dealers                                              6,690,000         5,752,000
 Securities owned, at market value                                                5,917,000        11,486,000
 Furniture, equipment and leasehold improvements, net of
 accumulated depreciation and amortization of $1,155,000 and $962,000             1,165,000         1,253,000
 Deferred tax asset                                                                 879,000         1,011,000
 Other, net                                                                       2,965,000         2,927,000
                                                                               ------------------------------
                                                                               $120,975,000      $115,214,000
                                                                               ==============================

 LIABILITIES, MANDATORILY REDEEMABLE COMMON STOCK AND
 ----------------------------------------------------
 STOCKHOLDERS' EQUITY
 --------------------
 Liabilities:
 Short-term borrowings from banks                                            $   10,887,000     $  29,114,000
 Accounts payable, accrued expenses and other liabilities                         8,896,000         7,935,000
 Payable to customers                                                            47,946,000        31,351,000
 Payable to brokers and dealers                                                  28,619,000        22,210,000
 Securities sold, not yet purchased, at market value                              2,398,000         4,074,000
 Notes payable to affiliate                                                       8,875,000         3,500,000
 Income taxes payable                                                                58,000           459,000
                                                                               ------------------------------
                                                                                107,679,000        98,643,000
                                                                               ------------------------------

 Mandatorily redeemable common stock                                                      -         7,013,000

 Commitments and contingencies


 Stockholders' equity:
 Common stock, $.001 par value - authorized 9,056,000 shares;
      issued and outstanding 2,001,899 and 3,914,748                                  2,000             4,000
 Additional paid-in capital                                                         764,000           764,000
 Retained earnings                                                               12,530,000         8,790,000
                                                                               ------------------------------
 Total stockholders' equity                                                      13,296,000         9,558,000
                                                                               ------------------------------
                                                                               $120,975,000      $115,214,000
                                                                               ==============================
<FN>
<F1> - Derived from audited financial statements contained in
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
</FN>
</TABLE>

             (The accompanying Notes to Consolidated Condensed Financial
                                     Statements

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

<TABLE>
<CAPTION>
                                                                         Three Months Ended September 30,
                                                                         --------------------------------
                                                                             1996                 1995
                                                                         --------------------------------
<S>                                                                      <C>                 <C>
REVENUES:
Commissions                                                              $9,186,000          $11,952,000
Market making and principal transactions, net                             4,429,000            5,226,000
Interest                                                                  2,562,000            1,960,000
Clearing fees                                                             3,233,000            1,936,000
Other                                                                     1,598,000            1,394,000
                                                                         --------------------------------
                                                                         21,008,000           22,468,000
                                                                         --------------------------------
EXPENSES:
Commissions and clearing costs                                            9,677,000           12,100,000
Employee compensation and benefits                                        4,499,000            3,380,000
Selling, general and administrative                                       3,209,000            4,026,000
Interest                                                                    987,000              784,000
                                                                         --------------------------------
                                                                         18,372,000           20,290,000
                                                                         --------------------------------
Income before income taxes                                                2,636,000            2,178,000
Provision for income taxes                                                  839,000              838,000
                                                                         --------------------------------
Net income                                                               $1,797,000           $1,340,000
                                                                         ================================
EARNINGS PER COMMON SHARE:
Net income                                                                    $0.80                $0.34
                                                                         ================================

Weighted average number of common shares outstanding during
   the period                                                             2,257,000            3,976,000
                                                                         ================================
</TABLE>



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

                                Page 4<PAGE>
       JW CHARLES FINANCIAL SERVICES, INC. AND SUBSIDIARIES
           CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                           (Unaudited)
<TABLE>
<CAPTION>
                                                                           Nine Months Ended September 30,
                                                                         ---------------------------------
                                                                              1996                 1995
                                                                         ---------------------------------
<S>                                                                      <C>                  <C>
Revenues:
Commissions                                                              $32,580,000          $29,928,000
Market making and principal transactions, net                             16,913,000           14,639,000
Interest                                                                   7,044,000            4,753,000
Clearing fees                                                              8,218,000            6,690,000
Other                                                                      3,139,000            2,302,000
                                                                         --------------------------------
                                                                          67,894,000           58,312,000
                                                                         --------------------------------
Expenses:
Commissions and clearing costs                                            35,651,000           31,138,000
Employee compensation and benefits                                        11,769,000           10,057,000
Selling, general and administrative                                       11,339,000           11,270,000
Interest                                                                   2,920,000            1,890,000
                                                                         --------------------------------
                                                                          61,679,000           54,355,000
                                                                         --------------------------------
Income before income taxes                                                 6,215,000            3,957,000
Provision for income taxes                                                 2,210,000            1,535,000
                                                                         --------------------------------
Net income                                                                $4,005,000           $2,422,000
                                                                         ================================
Earnings per common share:
Net income                                                                     $1.20                $0.61
                                                                         ================================

Weighted average number of common shares outstanding during
   the period                                                              3,326,000            3,981,000
                                                                         ================================

</TABLE>



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



                                 Page 5
<PAGE>
                                     
           JW CHARLES FINANCIAL SERVICES, INC. AND SUBSIDIARIES
             CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                               (Unaudited)

<TABLE>
<CAPTION>
                                                                                 Nine Months Ended September 30,
                                                                                 -------------------------------
                                                                                       1996             1995
                                                                                 -------------------------------
<S>                                                                              <C>              (c)
OPERATING ACTIVITIES
  Net income                                                                       $4,005,000       $2,422,000
  Adjustments to reconcile net income to net
     cash provided by operating activities:
                                                                                      193,000          182,000
    Depreciation and amortization
Change in operating assets and liabilities:
    Commissions and other receivables from clearing brokers                       (2,160,000)      (1.071,000)
    Receivable from customers                                                     (8,093,000)     (30,431,000)
    Receivable from brokers and dealers                                             (938,000)        (853,000)
    Securities owned                                                                5,569,000      (2,469,000)
    Deferred tax asset                                                                132,000        (117,000)
    Income taxes receivable                                                                 -           79,000
    Other assets                                                                     (38,000)        1,779,000
    Accounts payable, accrued expenses and other liabilities                          961,000        5,762,000
    Payable to customers                                                           16,595,000      (4,904,000)
    Payable to brokers and dealers                                                  6,409,000       16,471.000
    Securities sold, not yet purchased                                            (1,676,000)        2,321,000
    Income taxes payable                                                            (401,000)          649,000
                                                                                 -----------------------------
Net cash provided (used) by operating activities                                   20,453,000      (10,180,000)
                                                                                 -----------------------------
INVESTING ACTIVITIES
Purchases of furniture, equipment and leasehold improvements                        (105,000)         (285,000)
                                                                                 -----------------------------
FINANCING ACTIVITIES
Short-term borrowings from banks                                                 (18,227,000)       13,667,000
Repayment of notes payable to affiliate                                             (750,000)       (1,250,000)
Cash flow distributions and redemptions of common stock                           (1,155,000)           (1,000)
                                                                                 -----------------------------
Net cash provided (used) by financing activities                                 (20,132,000)       12,416,000
                                                                                 -----------------------------
Net increase in cash and cash equivalents                                             321,000        1,951,000
Cash and cash equivalents at beginning of period                                    8,597,000        5,401,000
                                                                                 -----------------------------
Cash and cash equivalents at end of period                                         $8,918,000       $7,352,000
                                                                                 =============================


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for income taxes                                       $1,436,000         $788,000
                                                                                 =============================
Cash paid during the period for interest                                           $2,920,000       $1,890,000
                                                                                 =============================
SUPPLEMENTAL DISCLOSURE OF NON CASH
INVESTING AND FINANCING ACTIVITIES:
Repurchase of madatorily redeemable common stock by issuance of
$6,125,000 of notes payable to affiliate in 1996.

</TABLE>

     (The accompanying Notes to Consolidated Condensed Financial Statements
            are an integral part of these financial statements.)
                                       Page 6<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 1995
Annual Report on Form 10-K.

Because of seasonal and other factors, the results of operations for the
three month and nine month periods ended September 30, 1996 are not
necessarily indicative of the results of operations to be expected for
the fiscal year ending December 31, 1996.

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"), JW Charles Capital Corp., JW Charles Insurance
Services, 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.


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

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 September 30, 1996, the net
capital positions of the Company's broker-dealer subsidiaries were as
follows:

JWC Clearing (alternative method elected):
     Net capital as a percent of aggregate debit items         12.1%
     Net capital                                        $12,652,000
     Required net capital                                $2,096,000

CSG:
     Ratio of aggregate indebtedness to net capital            2.70
     Net capital                                         $1,072,000
     Required net capital                                  $250,000


JWC Securities:
     Ratio of aggregate indebtedness to net capital            1.45
     Net capital                                         $2,220,000
     Required net capital                                  $250,000

DMG:
     Ratio of aggregate indebtedness to net capital             .65
     Net capital                                           $259,000
     Required net capital                                  $100,000







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

RESULTS OF OPERATIONS

     THREE MONTHS ENDED SEPTEMBER 30, 1996 (THE "1996 PERIOD") VS. 1995
(THE "1995 PERIOD")

                                       Three Months Ended September 30,
                                 -------------------------------------------
                                   1996               1995              1994
                                 (000's)   % Change  (000's) % Change  (000's)
                                 -------------------------------------------
         Revenues:
         Commissions              $9,186      -23  $11,952     121    $5,416
         Market making and
         principal                 4,429      -15    5,226     -11     5,884
         transactions, net
         Interest                  2,562       31    1,960      49     1,314
         Clearing fees             3,233       67    1,936      56     1,238
         Other                     1,598       15    1,394      42       983
                                 --------------------------------------------
                                 $21,008       -6  $22,468      51   $14,835
                                 ============================================

                                      Three Months Ended September 30, 
                                 -------------------------------------------
                                   1996             1995              1994
                                 (000's) % Change  (000's) % Change  (000's)
                                 -------------------------------------------
         Expenses:
         Commissions and          $9,677      -20  $12,100      70    $7,135
         clearing costs
         Employee compensation     4,499       33    3,380      15     2,931
         and benefits
         Selling, general and      3,209      -20    4,026      40     2,866
         administrative
         Interest                    987       26      784      64       479
                                 -------------------------------------------
                                 $18,372       -9  $20,290      51   $13,411
                                 ===========================================

                                    Three Months Ended September 30, 
                                 -------------------------------------------
                                  1996 % Change    1995 % Change      1994
                                 -------------------------------------------

         Clearing Factor           71%        0     70%     11         63%
                                 ===========================================

     Total revenues of $21,008,000 recorded in the 1996 Period decreased
by 6% compared to last year's $22,468,000.  During the 1996 Period the
Company experienced increases in all revenue categories except for
commission and market making and principle transactions, net.  The
decrease in these two revenue categories is attributed a reduction in
overall volume during the early summer months and a reduction in
underwriting activity in the 1996 Period as compared to the 1995



                                9<PAGE>
Period.  Growth in the various other revenue categories was primarily
due to heightened client activity, both retail and clearing, associated
with 1996's vibrant and rising stock market which resulted in increased
client balances.

     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"), remained constant at approximately 70% in
both the 1996 and 1995 Periods.

     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% 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, 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 33% from $3,380,000 to
$4,499,000.  This increase is primarily the result of two factors:  (i) a
new branch office in the third quarter of 1996 which was not included in
the 1995 third quarter; and (ii) increased performance bonuses resulting
from the increase in the company's net income.

     Comparative employee compensation and benefits and selling, general
and administrative expenses reflect the costs associated with the
Company's overall business growth.

     Interest income consists primarily of interest earned on receivables
from customers, securities owned and customer money market fund balances. 
Interest expense, which consists primarily of interest incurred on short-
term borrowings and notes payable used to finance JWC Clearing
receivables from customers and securities owned has increased in each of
the past three years.  The increase in both of these items is primarily a
result of: (i) a general increase in interest rates experienced during
1996, (ii) the customer's money market fund balance, and (iii) an
increase in the average outstanding loan balances used to fund increased
customer balances from 1995 to 1996 reflecting the Company's overall
business growth.

                                10<PAGE>
     NINE MONTHS ENDED SEPTEMBER 30, 1996 (THE "1996 PERIOD") VS. 1995
     (THE "1995 PERIOD")

     The Company's results of operations for 1996 were buoyed by a
vibrant and rising stock market.  All of the Company's business lines
turned in strong performances, particularly when compared to the
corresponding period of the prior year.

<TABLE>
<CAPTION>
                                                                      Nine Months Ended September 30,
                                                         -----------------------------------------------------------
                                                           1996                    1995                     1994
                                                         (000's)      Change      (000's)      Change      (000's)
                                                         -----------------------------------------------------------
               <S>                                       <C>              <C>      <C>               <C>    <C>
               Revenues:
               Commissions                                $32,580            9     $29,928           99     $15,006
               Market making and principal
               transactions, net                           16,916           16      14,639           -9      16,160
               Interest                                     7,044           48       4,753           36       3,492
               Clearing fees                                8,218           23       6,690           81       3,705
               Other                                        3,139           36       2,302            0       2,307
                                                          ---------------------------------------------------------
                                                          $67,897           16     $58,312           43     $40,670
                                                          =========================================================

                                                                     Nine Months Ended September 30,
                                                          ---------------------------------------------------------
                                                           1996                    1995                     1994
                                                          (000's)      Change      (000's)      Change      (000's)
                                                          ---------------------------------------------------------
               Expenses:
               Commissions and clearing costs             $35,651           14     $31,138           57     $19,863
               Employee compensation and benefits          11,769           17      10,057           26       7,983
               Selling, general and administrative         11,339            1      11,270           35       8,353
               Interest                                     2,920           54       1,890           62       1,165
                                                          ---------------------------------------------------------
                                                          $61,679           13     $54,355           42     $37,364
                                                          =========================================================

                                                                     Nine Months Ended September 30, 
                                                          ---------------------------------------------------------
                                                           1996      % Change      1995       % Change      1994
                                                          ---------------------------------------------------------
               Clearing Factor                                72%            3         70%            9         64%
                                                          =========================================================
</TABLE>

     The underlying reasons for most of the variances to the prior period
are substantially the same as the comparative quarterly discussions above
and the statements contained in the foregoing discussion also apply to
the nine month comparison.  Therefore this section is limited to the
discussion of additional factors which effected the results of operations
for the nine month periods.

     Total revenues of $67,897,000 recorded in the 1996 Period increased
16% over last year's $58,312,000.  During the 1996 Period the Company
experienced increases in all revenue categories.  Growth in the various
revenue categories was primarily due to heightened client activity, both
retail and clearing, associated with 1996's vibrant and rising stock
market and the continued expansion of the Company's branch office
network.

                                11<PAGE>
     The Clearing Factor, in the 1996 and 1995 Periods were 72%
and 70%, respectively.  The Company believes that the Clearing
Factor has increased primarily as a result of (i) an increase in
the average production per registered representative which
results in a higher percentage payout and (ii) an increase in the
percentage of the Company's commission business being cleared
through Bear Stearns as compared to JWC Clearing.  Clearing costs
paid to Bear Stearns are recorded as an expense whereas clearing
costs paid to JWC Clearing are eliminated in consolidation.

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 daily, 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.

     The Company has borrowed over the past few years an
aggregate of $5,000,000 from Gilman CMG, Inc. ("GCMG") or an
affiliate thereof, which, at September 30, 1995, owned
approximately 49% of the Company's outstanding shares of Common
Stock.  On May 15, 1995, the Company and GCMG entered into a new
loan agreement (the "Gilman Loan") for a refinancing of that
debt, pursuant to which the debt was converted to a $5,000,000
term loan, bearing interest at a rate of 10% per annum. At
October 31, 1996, $2,500,000 was outstanding under the Gilman
Loan with principal payable in equal quarterly installments of
$250,000 due on July 15, October 15, January 15, and April 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.

     On May 15, 1995, the Company entered into a Stock Repurchase
Agreement (the "Old Agreement") with GCMG to repurchase all of
the approximately 49% of the Company's outstanding common stock
then held by GCMG.  Beginning April 15, 1996, the Company was
required to repurchase stock each year in an amount equal to 50%
of annual net income, as defined, until all the GCMG stock was
repurchased.  In connection with this transaction, the Company
reclassified $5,978,000, representing $3.12 per share, 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 has been accreted to mandatorily redeemable common stock
through a direct charge to retained earnings.

                                12<PAGE>
     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' shares of common stock owned by GCMG and subject
to the Old Agreement.  Effective as of April 15, 1996, the
Company had repurchased 315,510 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 1,600,399 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
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 Stock 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.

     On January 19, 1996, the Company obtained an unsecured
$2,500,000 revolving line of credit from Wilmington Trust Company
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 nine-
quarter period.  At September 30, 1996 and October 31, 1996, the
balance outstanding under the Wilmington Facility was $0.

     In connection with the Wilmington Facility, the Company
entered into a Marketing Agreement with Wilmington Trust FSB and
granted W T Investments, Inc. a warrant to purchase up to 400,000
shares of the Company's common stock at any time prior to
December 31, 2002.  The exercise price per share is the greater
of $5.50 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.  The 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.

                                13<PAGE>
     The Company believes that its current borrowing
arrangements, combined with anticipated levels of internally
generated funds, will be sufficient to fund its financial
requirements for the foreseeable future.  This estimate is 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.

     At September 30, 1996, the Company had stockholders' equity
of $13,296,000, representing an increase of $3,738,000 from
December 31, 1995.  The increase in stockholders' equity is due
to reported net income of $4,005,000 for the 1996 Period, net of
the reclassification of $267,000 from stockholders' equity to
notes payable to affiliate to reflect the terms of the New
Agreement.

     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 and the Company's
contingent liability as a 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.








                                    14<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.

                               15<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: November 19, 1996                 /s/ Marshall T. Leeds
                              ------------------------------------
                              (Marshall T. Leeds, President and
                               Chief Executive Officer)
                                    (Duly Authorized Officer)


Date: November 19, 1996                 /s/ Joel E. Marks    
                              -----------------------------------
                              (Joel E. Marks, Principal Financial
                               and Accounting Officer)



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