_____________________________________________________________________________

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549
                            _______________________           
                                       
                                   FORM 10-Q
                                       
               QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934
                                       
                            _______________________           
                                       
 For the Quarterly Period ended                        Commission File Number
         June 30, 1998                                         0-12926
                            _______________________

                                JMC GROUP, INC.
            (Exact name of registrant as specified in its charter)
                                       
              DELAWARE                                       95-2627415
 (State or other jurisdiction of                         (I.R.S. Employer
   incorporation or organization)                        Identification No.)
                                       

          9710 Scranton Road, Suite 100, San Diego, California  92121
           (Address of principal executive offices)        (Zip Code)

       Registrant's telephone number, including area code:  619-450-0055

                            _______________________


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

      As of June 30, 1998, the registrant had 6,166,451 shares of its common
stock, $.01 par value, issued and outstanding.

_____________________________________________________________________________

                       PART I.     FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

                           JMC GROUP, INC. AND SUBSIDIARIES
                              CONSOLIDATED BALANCE SHEETS
                                      (UNAUDITED)
                                                       June 30,   December 31,
                                                         1998        1997
                                                    ------------  ------------
   ASSETS                                                                    
     CURRENT ASSETS                                                          
       Cash and cash equivalents                    $ 5,829,993   $ 4,261,531
       Cash segregated under securities regulations         994       922,207
       Receivables from insurance companies             129,715       329,265
       Receivable from financial institution                  -     1,462,861
       Income taxes receivable                           14,464             -
       Deferred tax asset                               171,456       251,426
       Other assets                                     162,085       195,219
                                                    ------------  ------------
         TOTAL CURRENT ASSETS                         6,308,707     7,422,509
                                                                       
     Furniture, equipment and leasehold 
       improvements - net of accumulated 
       depreciation  and amortization of 
       $1,453,003 in 1998 and $1,435,362 
       in 1997                                           45,465        77,925
   
                                                                  
     Asset-based fees - net of accumulated 
       amortization of $1,028,743 in 1998 and 
       $978,575 in 1997                                 368,386       418,554
                                                    ------------  ------------
         
         TOTAL ASSETS                               $ 6,722,558   $ 7,918,988
                                                    ============  ============
   LIABILITIES AND STOCKHOLDERS' EQUITY                                      
     CURRENT LIABILITIES                                                      
       Accrued fees to financial institutions       $    59,527   $   113,009
       Customer funds segregated under securities   
         regulations                                        994       922,207
       Accrued restructuring charges                    122,598       410,785
       Accrued expenses and other liabilities           118,536       242,871
       Allowance for contract cancellations              32,345        55,822
       Income tax payable                                     -        11,659
       Accrued payroll and related expenses              33,230        81,572
                                                    ------------  ------------
         TOTAL CURRENT LIABILITIES                      367,230     1,837,925
                                                                              
   STOCKHOLDERS' EQUITY                                                       
     Preferred stock, no par value; authorized 
       5,000,000 shares                                       -             -
     Common stock, $.01 par value; authorized 
       20,000,000 shares; issued and outstanding 
       6,166,451 shares in 1998 and 6,044,351
       shares in 1997                                    61,664        60,443
     Additional paid-in-capital                         583,276       466,849
     Retained earnings                                5,710,388     5,553,771
                                                    ------------  ------------
       TOTAL STOCKHOLDERS' EQUITY                     6,355,328     6,081,063
                                                    ------------  ------------
         TOTAL LIABILITIES AND STOCKHOLDERS' 
           EQUITY                                   $ 6,722,558   $ 7,918,988
                                                    ============  ============
                                                    
  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                      JMC GROUP, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)
                                                                
                                                                           
                                                   Three Months Ended June 30,
                                                        1998         1997
                                                   ------------  ------------
     REVENUES                                                            
       Commissions                                 $   343,501   $ 1,080,631
       Interest                                         81,097        56,750
       Other                                            80,587           675
                                                   ------------  ------------
         TOTAL REVENUES                                505,185     1,138,056
                                                   ------------  ------------ 
     EXPENSES                                                                
       Employee compensation and benefits              132,144       759,338
       Fees to financial institutions                  105,112       387,890
       Professional fees                                40,930       107,544
       Rent                                             21,890        68,727
       Telephone                                         9,035         5,457
       Depreciation and amortization                     7,866        29,109
       Other general and administrative expenses        83,724       203,814
                                                   ------------  ------------
         TOTAL EXPENSES                                400,701     1,561,879
                                                   ------------  ------------
       INCOME (LOSS) BEFORE INCOME TAXES               104,484      (423,823)
                                                                            
     INCOME TAX PROVISION (BENEFIT)                     40,790      (133,690)
                                                   ------------  ------------
       NET INCOME (LOSS)                           $    63,694   $  (290,133)
                                                   ============  ============
     EARNINGS (LOSS) PER SHARE:                                              
                                                                            
         BASIC                                     $      0.01   $     (0.05)
                                                   ============  ============
         DILUTED                                   $      0.01   $     (0.05)
                                                   ============  ============
     WEIGHTED AVERAGE NUMBER OF SHARES                                      
                                                                             
         BASIC                                       6,156,044     6,044,351
                                                                             
         DILUTED                                     6,170,084     6,050,020
                                            
  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.


                      JMC GROUP, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                               (UNAUDITED)
                                                               
                                                                            
                                                    Six Months Ended June 30,
                                                         1998         1997
                                                   ------------  ------------
     REVENUES                                                               
       Commissions                                 $   712,246   $ 2,219,422
       Gain on sale of certain asset-based fee 
         revenue                                       330,000             -
       Interest                                        156,332       116,049
       Other                                            86,782         8,811
                                                   ------------  ------------
         TOTAL REVENUES                              1,285,360     2,344,282
                                                   ------------  ------------
     EXPENSES                                                           
       Employee compensation and benefits              435,380     1,525,674
       Fees to financial institutions                  241,237       805,859
       Professional fees                                89,997       172,748
       Rent                                             42,309       132,418
       Telephone                                        20,624        21,917
       Depreciation and amortization                    16,906        61,236
       Other general and administrative expenses       181,113       459,722
                                                   ------------  ------------
         TOTAL EXPENSES                              1,027,566     3,179,574
                                                   ------------  ------------
       INCOME (LOSS) BEFORE INCOME TAXES               257,794     (835,292)
                                                                           
     INCOME TAX PROVISION (BENEFIT)                    101,177     (294,579)
                                                   ------------  ------------
       NET INCOME (LOSS)                           $   156,617   $ (540,713)
                                                   ============  ============
                                                                           
     EARNINGS (LOSS) PER SHARE:                                         
                                                                            
         BASIC                                     $      0.03   $    (0.09)
                                                   ============  ============
         DILUTED                                   $      0.03   $    (0.09)
                                                   ============  ============
                                                   
     WEIGHTED AVERAGE NUMBER OF SHARES               6,102,051    6,067,315
                                                                         
     WEIGHTED AVERAGE DILUTIVE COMMON SHARES         6,111,772    6,082,869
                                             
  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.


                     JMC GROUP, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (UNAUDITED)
                                                                            
                                                     Six Months Ended June 30,
                                                       1998            1997
                                                     ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:                                
  Net income (loss)                                  $   156,617  $  (540,713)
  Adjustments to reconcile net income (loss) to 
    net cash provided (used) by operating 
    activities:
    Gain on sale of furniture and equipment              (21,951)      (6,733)
    Depreciation and amortization                         16,906       61,236
    Amortization of asset-based fees                      50,168       61,085
    Deferred tax provision                                79,970      (13,711)
  Changes in assets and liabilities:                                      
    Cash segregated under securities regulations         921,213     (203,727)
    Receivables from insurance companies                 199,550      247,739
    Receivable from financial institution              1,462,861      325,000
    Income taxes receivable                              (14,464)    (290,686)
    Other assets                                          33,134      (13,166)
    Accrued fees to financial institutions               (53,482)    (206,614)
    Customer funds segregated under securities 
      regulations                                       (921,213)     203,727
    Accrued restructuring                               (271,282)     (11,560)
    Accrued expenses and other liabilities              (124,335)    (235,231)
    Allowance for contract cancellations                 (23,477)      13,820
    Income tax payable                                   (11,659)           -
    Accrued payroll and related expenses                 (48,342)     (21,902)
                                                     ------------ ------------
      NET CASH PROVIDED (USED) BY OPERATING 
        ACTIVITIES                                     1,430,214     (631,436)
                                                     ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:                                         
  Purchase of furniture, equipment and leasehold 
    improvements                                          (1,351)    (111,036)
  Proceeds from sale of furniture and equipment           21,951        7,500
                                                     ------------ ------------
      NET CASH PROVIDED (USED) BY INVESTING 
        ACTIVITIES                                        20,600     (103,536)
                                                     ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:                                         
  Repurchased stocks                                           -     (194,548)
  Proceeds from stock options exercised                  117,648       15,000
                                                     ------------ ------------
      NET CASH PROVIDED (USED) BY FINANCING 
        ACTIVITIES                                       117,648     (179,548)
                                                     ------------ ------------
      NET INCREASE (DECREASE) IN CASH AND CASH 
        EQUIVALENTS                                    1,568,462     (914,520)
                                                                           
      CASH AND CASH EQUIVALENTS AT BEGINNING OF 
        PERIOD                                         4,261,531    4,682,883
                                                     ------------ ------------
      CASH AND CASH EQUIVALENTS AT END OF PERIOD     $ 5,829,933  $ 3,768,363
                                                     ============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                           
  Cash paid for:                                                             
    Income taxes                                     $    51,835  $     9,542
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING                     
  ACTIVITIES                                      
  Depreciation charged against accrued 
    restructuring expenses                           $    16,905  $         -

  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

NOTE 1.     BASIS OF PRESENTATION

            The accompanying financial statements have been prepared in
            accordance with the instructions to Form 10-Q and, therefore, do
            not include all information and footnote disclosures that are
            otherwise required by Regulation S-X and that will normally be
            made in the Company's Annual Report on Form 10-K.  The financial
            statements do, however, reflect all adjustments which are, in the
            opinion of management, necessary for a fair statement of the
            results of the interim period presented.
            
            The balance sheet at December 31, 1997 has been derived from the
            audited financial statements at that date.  It is recommended that
            these financial statements be read in conjunction with the
            Company's financial statements and notes thereto included in the
            Company's Form 10-K for the year ended December 31, 1997.

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

The discussion of the Company's business contained in this Form 10-Q includes
certain forward-looking statements.  For a discussion of factors which may
affect the outcome projected in such statements, see "Material Customers,"
"Competition," "Registration and Licensing," "Regulation," "Legal
Proceedings," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Company's Annual Report on Form 10-K dated
February 27, 1998.

RESULTS OF OPERATIONS
---------------------

SECOND QUARTER 1998 COMPARED TO SECOND QUARTER 1997

The Company realized net income of $64,000 (or $0.01 per basic and fully
diluted share) in the second quarter of 1998 compared to a net loss of
$290,000 (or $0.05 per basic and fully diluted share) for the second quarter
of last year.  For the six months ended June 30, 1998, the Company had a net
income of $157,000 (or $0.03 per basic and fully diluted share) compared to
net loss of $541,000 (or $0.09 per basic and fully diluted share) during the
first six months of 1997.  The first half of 1998 results included a first
quarter gain of $330,000 ($198,000 after estimated tax provision) on the sale
of the rights to certain asset-based fee revenues to a former client financial
institution.  Excluding this gain, the Company would have reported a net loss
of $41,000 for the first half of 1998.

Total revenues for the quarter ended June 30, 1998 were $505,000, a decrease
of $633,000 or 56% from $1,138,000 in the second quarter of 1997.  This
reduction in revenues is primarily a result of the following:

 .  A decrease in sales production related commissions of $453,000 or 86% as
   a result of management's decision to terminate retail bank operations at 
   the end of 1997.

 .  Asset-based fee revenues decreased approximately $179,000 in the second
   quarter of 1998 compared to the second quarter of 1997 as a result of the 
   sale of the rights to asset-based fee revenues related to the Company's 
   Tennessee operation at the end of the fourth quarter of 1997.  Second 
   quarter 1997 asset-based fees related to the Tennessee operation totaled 
   approximately $158,000.

Total revenues for the first six months of 1998 were $1,285,000 versus
$2,344,000 for the first six months of 1997.  Excluding the aforementioned
gain in the first quarter of 1998, total revenues would have decreased by
$1,389,000 or 59% to $955,000 for the first six months of 1998.  The decrease
in revenues is also a result of a decrease in sales related commissions of
$908,000 or 84% and a decrease in asset-based revenues resulted from the sale
of rights to asset-based fee revenues at the end of the fourth quarter of
1997.

Total expenses for the quarters ended June 30, 1998 and 1997 were $401,000 and
$1,562,000, respectively.  This $1,161,000 or 74% decrease is primarily
attributable to:

 .  A $283,000 or 73% reduction in fees to financial institutions due to
   lower sales volume.  In addition, asset-based fees to financial 
   institutions decreased due to the sale of the rights to the asset-based fee
   revenues in the fourth quarter of 1997, which eliminated the related fee 
   expense obligation.

 .  A decrease of $627,000 or 83% in payroll related expenses in the second
   quarter of 1998 as compared to 1997, primarily as a result of personnel
   reductions related to the Company terminating most of its personnel at the
   beginning of 1998.

 .  The remaining decrease in other recurring operating expenses of
   approximately $251,000 or 61% is a result of a general reduction in
   operations.

For the same reasons, total expenses for the six months ended June 30, 1998
decreased $2,152,000 or 68% to $1,028,000 from $3,180,000 in the first half of
1997.

SECOND QUARTER 1998 COMPARED TO FIRST QUARTER 1998

The net income for the second quarter of 1998 of $64,000 (or $0.01 per basic
and fully diluted share) compares to a net income of $93,000 (or $0.02 per
basic and fully diluted share) for the first quarter of 1998.  Included in the
1998 first quarter results were revenues in the amount of $330,000 ($198,000
or $0.03 per basic and fully diluted share after estimated tax provision)
related to the gain on the sale of the rights to future asset-based fee
revenues to a client financial institution.  Excluding the aforementioned gain
in the first quarter of 1998, the first quarter 1998 would have a net loss of
$105,000.  Excluding the gain in the first quarter 1998, total revenues for
the second quarter 1998 were $505,000 compared to $450,000 in the first
quarter 1998, an increase of $55,000 or 12%.  Total expenses in the second
quarter of 1998 of $401,000 decreased $226,000, or 36%, from $627,000 in the
first quarter of 1998.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

As of  June 30, 1998, the Company had cash and cash equivalents of
approximately $5,830,000, an increase of approximately $1,568,000 from
$4,262,000 in cash and cash equivalents at December 31, 1997.  Significant
sources of cash and cash equivalents include the following:

 .  Proceeds of $1,463,000 related to the sale of rights to certain future
   asset based fees, which were recorded in the fourth quarter of 1997.

 .  Proceeds of $118,000 from Common Stock options exercised.

Future fees, both those due from provider companies and those due to financial
institution clients, are not reflected as an asset or a liability in the
Consolidated Balance Sheets.  However, management does believe a value exists
related to the present value of the projected future net asset fees to be
retained by the Company.  Such projected future net asset fees are a function
of the projected accumulated value of assets in-force multiplied by the net
asset fee rate (gross asset fee rate less amount committed to the financial
institution).  The current value to the Company is the discounted present
value of such projected future asset fees less the present value of an
estimated cost to service the customers making up such in-force assets.
Management's belief that a present value for such future asset-based fees
exists and the estimates used to calculate the range of such values have been
supported by the sale of the rights to certain future fees in the first
quarter of 1998 and prior years.  The projected value of the future asset-
based fees on the remaining block of business at June 30, 1998 is based on
assumptions as to growth, persistency and risk adjusted discount rates.  The
assumptions as to persistency and growth of the business are based on
historical data maintained by the Company since its inception.  The discount
rate used of between 8% and 10% is based on a risk-free rate of return plus a
nominal additional factor for risk (taking into account that risk factors are
substantially covered by the estimated persistency and growth rates).
Management believes the value of these net future revenues is appropriately
estimated at $3.5 million to $4.5 million, pre-tax, based on the Company's
valuation calculations.  Such value is based on the estimates of the variables
used in the calculation (which are consistent with estimates used in prior
sales of future rights) and the actual realization, if any, could be higher or
lower than this range.

While the Company's revenue base was reduced as described above during the
second and first quarters of 1998, the Company's base operating expenses,
excluding noncash expenses such as depreciation and amortization, have been
reduced by nearly $190,000 or 40% compared to the first quarter of 1998.  As a
result, based upon the Company's cash position as of June 30, 1998, management
expects the Company will meet its operating and capital expenditure needs for
the remainder of its current fiscal year.

TRENDS AND UNCERTAINTIES
------------------------

TERMINATION OF HISTORICAL BUSINESS LINES

The Company announced at the end of 1997 that it would be terminating its
retail sales bank programs.  Accordingly, the Company has substantially exited
from its traditional lines of business.  The Company will continue to service
and maintain all annuity contracts and mutual fund accounts in place at the
end of the second quarter of 1998 in order to maximize the return on those
assets.

BUSINESS OPPORTUNITIES

Management and the Board are actively seeking an appropriate business
combination opportunity for the Company.  In addition, management and the
Board continue to explore opportunities for enhanced utilization of its
remaining liquid assets.  In the interim, the Company's cash assets are
invested in government securities, mutual funds and cash equivalents.  If the
Company does not find an operating entity to combine with, and if its assets
are not invested in certain types of securities (primarily government
securities), it may be deemed to be an investment company under the terms of
the Investment Company Act of 1940, as amended (the "Act").  The Board intends
to take defensive steps to avoid inadvertent application of the Act to the
Company and the attendant additional regulatory requirements.  However, there
can be no assurance that the Act will not be applied to the Company.

YEAR 2000 ISSUE

The Company is aware of the issues associated with the programming code in
existing computer systems as the year 2000 approaches.  The issue is whether
computer systems will properly recognize date-sensitive information when the
year changes to 2000.  Management is currently assessing the year 2000
compliance issue and has already taken initial steps toward the updating,
converting and replacement of its non-compliant systems in order to achieve
compliance in a cost effective and timely fashion.  The Company will expend
necessary resources to assure that its computer systems are reprogrammed in
time to deal effectively with transactions in the year 2000 and beyond.  The
Company presently believes that, with modifications to existing software and
conversions to new software, the Year 2000 issue will not pose significant
operational problems for the Company's computer systems as so modified,
converted or replaced.  The Company also believes that the cost of conversion,
modification or replacement will not have a material adverse effect on the
Company's financial condition or results of operations.  However, if such
modifications and conversions are not completed timely or third parties on
which the Company relies are unable to address this issue in a timely manner,
the Year 2000 issue may have a material impact on the operations of the 
Company.
                         
                         PART II.    OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

INSURANCE DEPARTMENT PROCEEDINGS

As previously reported, during March 1993 the Florida Department of Insurance
(the "Department") commenced an administrative proceeding against the
Company's wholly owned subsidiary, James Mitchell & Co. ("JMC").  A Final
Order was issued in July 1995, however, the enforcement of the majority of the
Final Order was stayed pending the outcome of JMC's appeal. The District Court
of Appeal, for all material matters, affirmed the Final Order in August 1996,
and in October 1996, the District Court of Appeal denied JMC's Motion for
Rehearing. In March 1997, the Florida Supreme Court denied JMC's petition for
review.  Effective October 1995, JMC concluded its relationship with its
Florida financial institution client, Barnett Banks, Inc., and is not
presently doing business in the State of Florida.

On March 27, 1998, the California Department of Insurance ("DOI") initiated
proceedings in regards to the California insurance licenses of James K.
Mitchell and JMC Insurance Services Corporation in order to review the
allegations made by the Florida Department of Insurance in a Final Order and
to see whether any actions should be taken by the California DOI.  The Company
has requested a hearing concerning this matter.  Management does not believe
that these proceedings will have a material adverse effect on the Company's
business, financial condition or results of operations.

OTHER PROCEEDINGS

The Company's broker-dealer subsidiary, JMC Investment Services, Inc.
("JMCI"), has been named as a defendant in a NASD arbitration regarding the
sales of real estate limited partnerships by Spear Rees & Co. (the predecessor
to JMCI) between 1990 and 1993.  Management does not believe that any such
proceeding will have a material adverse effect on the Company's financial
condition or results of operations.
            
            
ITEM 2.     CHANGES IN SECURITIES

            Not applicable.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

            Not applicable.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

            None.

ITEM 5.     OTHER INFORMATION

            Not applicable.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a.)   Exhibits.

                  The following exhibit is filed herewith:

                  27     Financial Data Schedule

            b.)   Reports on Form 8-K.

                  None.
                  

                                  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.




Date: August 13, 1998               /s/ James K. Mitchell
                                    ------------------------------------------
                                    James K. Mitchell, Chairman, President and
                                    Chief Executive Officer






Date: August 13, 1998               /s/ Jacqueline O. Tran
                                    ------------------------------------------
                                    Jacqueline O. Tran, Controller and
                                    Principal Accounting Officer