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                               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
      September 30, 1996                                    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 September 30, 1996, the registrant had 6,218,898 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)
                                                                
                                                   September 30,   December 31,
                                                      1996            1995
  ASSETS                                           -------------   ------------
    CURRENT ASSETS                                                
      Cash and cash equivalents                    $   2,836,842   $  5,832,598
      Cash segregated under securities  
        regulations                                    1,991,182        894,269
      Receivables from insurance companies               882,660        826,971
      Receivable from financial institution              100,000        109,450
      Income taxes receivable                            853,638         65,334
      Deferred tax asset                                 213,229        159,354
      Other assets                                       279,600        281,947
                                                   -------------   ------------
         TOTAL CURRENT ASSETS                          7,157,151      8,169,923
                                                                  
    Furniture, equipment and leasehold                           
      improvements - net of accumulated
      depreciation  and amortization of 
      $1,588,239 in 1996 and $1,498,291 
      in 1995                                            226,909        362,261
  
                                                                  
    Consulting and marketing agreement - net of        
      accumulated amortization of $234,747             1,330,253              -
                                                                  
    Asset-based fees purchased - net of 
      accumulated amortization of $603,058 
      in 1996 and $417,485 in 1995                       794,071        979,644
                                                   -------------   ------------
           TOTAL ASSETS                            $   9,508,384     $9,511,828
                                                   =============   ============
  LIABILITIES & STOCKHOLDERS' EQUITY                              
    CURRENT LIABILITIES                                             
      Accrued fees to financial institutions       $     396,333     $  367,287
      Customer funds segregated under 
        securities regulations                         1,991,182        894,269
      Accrued expenses and other liabilities             469,857        894,180
      Allowance for contract cancellations               130,453        142,503
      Accrued payroll and related expenses               214,506        212,767
                                                   -------------   ------------
         TOTAL CURRENT LIABILITIES                     3,202,331      2,511,006
                                                                  
  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 
        6,218,898 shares in 1996 and 6,198,898 
        in 1995                                           62,189         61,989
      Additional paid-in-capital                         959,651        624,851
      Retained earnings                                5,284,213      6,313,982
                                                   -------------   ------------
         TOTAL STOCKHOLDERS' EQUITY                    6,306,053      7,000,822
                                                   -------------   ------------
           TOTAL LIABILITIES AND STOCKHOLDERS'        
             EQUITY                                $   9,508,384     $9,511,828
                                                   =============   ============
                                     
   The accompanying notes are an integral part of these financial statements.


                          JMC GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
                                                                       
                                                                       
                                              Three Months Ended September 30,
                                                    1996           1995
    REVENUES                                   ---------------   --------------
       Commissions                             $    2,244,812    $   3,453,664
       Net gain on sale of rights to certain                
        future asset-based fees                             -        3,311,948
       Interest                                        38,592           50,891
       Other                                          102,307          444,265
                                               ---------------   --------------
          TOTAL REVENUES                            2,385,711        7,260,768
                                               ---------------   --------------
    EXPENSES                                                  
       Employee compensation and benefits           1,224,627        1,805,432
       Fees to financial institutions                 993,269        1,541,022
       Professional fees                              675,445          120,196
       Rent                                           103,376          130,958
       Telephone                                       33,234           86,834
       Depreciation and amortization                  129,434          102,628
       Other general and administrative 
        expenses                                      344,687          418,608
                                               ---------------   --------------
          TOTAL EXPENSES                            3,504,072        4,205,678
                                               ---------------   --------------
       INCOME (LOSS) BEFORE INCOME TAXES           (1,118,361)       3,055,090
                                                 
                                                              
    INCOME TAX PROVISION (BENEFIT)                   (435,955)       1,222,301
                                               ---------------   --------------
       NET INCOME (LOSS)                       $     (682,406)   $   1,832,789
                                                              
    EARNINGS (LOSS) PER SHARE:                 $         (.11)   $        0.30
    
    WEIGHTED AVERAGE SHARES                         6,218,898        6,200,181
                                                              
                                     
    The accompanying notes are an integral part of these financial statements.



                          JMC GROUP, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
                                                                       
                                                                       
                                               Nine Months Ended September 30,
                                                   1996             1995
    REVENUES                                   ----------------  --------------
       Commissions                             $     7,499,812   $   12,147,822
       Net gain on sale of rights to certain  
        future asset-based fees                              -        3,311,948
       Interest                                        162,328          165,611
       Other                                           110,856        1,803,211
                                               ----------------  --------------
          TOTAL REVENUES                             7,772,996       17,428,592
                                               ----------------  --------------
    EXPENSES                                                  
       Employee compensation and benefits            3,827,450        5,999,296
       Fees to financial institutions                3,097,129        5,416,232
       Professional fees                               797,916          532,141
       Rent                                            284,116          396,161
       Telephone                                       115,417          282,081
       Depreciation and amortization                   424,108          305,333
       Other general and administrative 
        expenses                                       894,319        1,289,457
                                               ----------------  -------------- 
          TOTAL EXPENSES                             9,440,455       14,220,701
                                               ----------------  --------------
          INCOME (LOSS) BEFORE INCOME TAXES         (1,667,459)       3,207,891
                                                              
    INCOME TAX PROVISION (BENEFIT)                    (637,690)       1,290,910
                                               ================  ==============
       NET INCOME  (LOSS)                      $    (1,029,769)  $    1,916,981
                                                            
                                                              
    EARNINGS (LOSS) PER SHARE:                 $         (0.17)  $         0.31
                                               ================  ==============
    WEIGHTED AVERAGE SHARES                          6,212,231        6,200,136
                                                              
                                     
   The accompanying notes are an integral part of these financial statements.


                        JMC GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (UNAUDITED)
                                                                   
                                               Nine Months Ended September 30,
                                                     1996             1995
CASH FLOWS FROM OPERATING ACTIVITIES:           --------------  ---------------
   Net income (loss)                            $  (1,029,769)  $    1,916,981
   Adjustments to reconcile net income 
    (loss) to net cash used by operating 
    activities:
      Gain on sale of furniture and equipment          (1,998)               -
      Depreciation and amortization                   424,108          305,333
      Amortization of asset-based fees 
       purchased                                      185,573          118,429
      Deferred tax provision                          (53,875)         412,517
   Changes in assets and liabilities:                              
      Cash segregated under securities 
       regulations                                 (1,096,913)        (653,612)
      Receivables from insurance companies            (55,689)         483,802
      Receivable from financial institution             9,450       (3,869,007)
      Income taxes receivable                        (788,304)         744,335
      Other assets                                     (6,507)         (57,862)
      Accrued fees to financial institutions           29,046         (336,864)
      Customer funds segregated under 
       securities regulations                       1,096,913          653,612
      Accrued expenses and other liabilities         (424,323)         (29,975)
      Allowance for contract cancellations            (12,050)        (313,315)
      Accrued payroll and related expenses              1,739         (237,708)
                                                --------------  ---------------
         NET CASH USED BY OPERATING ACTIVITIES     (1,722,599)        (863,334)
                                                --------------  ---------------
   CASH FLOWS FROM INVESTING ACTIVITIES:                               
      Purchase of furniture, equipment and 
       leasehold improvements                         (55,341)         (67,033) 
      Proceeds from sale of furniture and 
       equipment                                       12,184                -
      Purchase of short-term investments                    -         (164,000)
      Payment for consulting and marketing 
       agreement                                   (1,250,000)               -
                                                --------------  ---------------
         NET CASH USED BY INVESTING ACTIVITIES     (1,293,157)        (231,033)
                                                --------------  ---------------
   CASH FLOWS FROM FINANCING ACTIVITIES:                               
      Proceeds from stock options exercised            20,000                -
                                                --------------  ---------------
         NET CASH PROVIDED BY FINANCING 
          ACTIVITIES                                   20,000                -
                                                --------------  ---------------
         NET DECREASE IN CASH AND CASH 
          EQUIVALENTS                              (2,995,756)      (1,094,367)
                                                                    
         CASH AND CASH EQUIVALENTS AT BEGINNING 
          OF PERIOD                                 5,832,598        3,610,888
                                                --------------  ---------------
         CASH AND CASH EQUIVALENTS AT END OF 
          PERIOD                                $   2,836,842   $    2,516,521
                                                ==============  ===============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW 
 INFORMATION                   
   Cash paid for:                                                    
      Interest                                  $         520   $            -
      Income taxes                              $     221,349   $       89,450
SUPPLEMENTAL DISCLOSURES OF NONCASH 
 INVESTING ACTIVITIES
   Warrant issued in connection with 
    consulting and marketing agreement          $     315,000   $            -

                                       
  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, 1995 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, 1995.  A
          certain balance sheet item at December 31, 1995 was reclassified
          to conform with the format of the balance sheet at September 30,
          1996.

Note 2.   JMCG/USBA Marketing and Consulting Agreements
          
          The Company entered into a Consulting Agreement with USBA
          Holdings, LTD ("USBA") on January 26, 1996.  This agreement was
          established to provide JMC with access to financial institutions
          through the consulting and other relationships established by
          USBA and its subsidiaries.  In connection with this transaction,
          the Company paid USBA $1.25 million on January 28, 1996 for the
          preparation and implementation of a five year marketing plan.  On
          January 29, 1996, JMCG and USBA entered into a Marketing
          Agreement with a five-year term.  Under the terms of the
          Marketing Agreement, JMCG granted USBA a five-year warrant to
          purchase up to one million shares of the Company's common stock
          at $2.50 per share which may be adjusted to approximately $1.44
          per share under certain circumstances.  The warrant, which is
          exercisable after January 29, 1997, has an estimated value of
          $315,000.  The Company has the right to recover $1 million as a
          Termination Fee under the Marketing Agreement under certain
          circumstances.
          
          Both  the  payment  of the $1.25 million and  the  value  of  the
          warrant  have  been  capitalized and are  being  amortized  on  a
          straight line basis over their current estimated benefit  periods
          of five years.

Note 3.   Merger-Related Costs
          
          On May 20, 1996 the Company entered into an Agreement and Plan of
          Merger with USBA.  During the quarter ended June 30, 1996, the
          Company capitalized direct costs of acquisition totaling $445,000
          in anticipation of such merger.
          
          On August 26, 1996, the Company terminated the Agreement and Plan
          of Merger with USBA (See "Legal Proceedings").  In connection
          with this termination, the Company expensed all costs related to
          the merger which were incurred during the third quarter of 1996
          as well as those costs previously capitalized in the second
          quarter as described above.  Such costs amounted to $445,000 and
          $259,000, respectively.
          
          The Company filed an action in U.S. District Court Southern
          District of California in San Diego on October 11, 1996, alleging
          various causes of action against USBA and certain individual
          defendants seeking rescission of all agreements between JMCG and
          USBA (See "Note 2.  JMCG/USBA Marketing and Consulting
          Agreements" and the Agreement and Plan of Merger described
          above.) as well as damages and other relief.  On November 7,
          1996, USBA answered the complaint, asserted certain affirmative
          defenses and stated counterclaims against the Company and certain
          individuals seeking specific performance of the Plan of Merger
          and other relief (See "Legal Proceedings").
          
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

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

Third Quarter 1996 Compared to Third Quarter 1995

The Company realized a net loss of $682,000 (or $0.11 per share) in the
third quarter of 1996 compared to net income of $1,833,000 (or $0.30 per
share) in the third quarter of 1995.  The third quarter 1996 net loss
includes pre-tax effected expenses related to the proposed merger with USBA
of $704,000, as well as amortization of the payment of $78,000 for the
marketing plan and the valuation of the warrant.  The impact of these two
items would be $433,000 and $48,000 (or $0.07 and $0.01 per share
respectively) after estimated tax benefit.  The total amount of merger-
related costs expensed in the third quarter of 1996 includes costs which
were capitalized in the second quarter as well as additional costs incurred
during the third quarter (See "Note 3.  Merger-Related Costs").

Third quarter 1995 results included revenues totaling $3,755,000 from the
Company's Florida financial institution client which consisted of a net
gain of $3,312,000 ($1,987,000 or $0.32 per share after estimated tax
provision) on the sale of the rights to certain future asset-based fee
revenues and $443,000 in transition fees which were included in other
revenues.  Excluding the net gain on the sale of the rights to certain
future asset-based fee revenues from the third quarter of 1995, the Company
would have reported a net loss of $154,000 (or $0.02 per share).

For the nine months ended September 30, 1996, the Company reported net loss
of $1,030,000 (or $0.17 per share) compared to net income of $1,917,000 (or
$0.31 per share) during the first nine months of 1995.  The nine months
ended September 30, 1996 included merger-related expenses of $800,000
($492,000 net after estimated tax benefit or $0.08 per share) as well as
amortization of costs, associated with the marketing plan and issuance of a
warrant to USBA, of $235,000 ($145,000 after estimated tax benefit or $0.02
per share).  For 1995, in addition to the previously mentioned net gain on
the sale of the rights to certain future asset-based fee revenues and
transition fees, the nine-month results included revenues of $1,308,000
($785,000 or $0.13 per share after estimated tax provision) related to the
Company's Florida client financial institution's payment for the right to
hire certain employees of the Company's wholly owned subsidiary and certain
other services.  Excluding the payment for the right to hire personnel and
the net gain on the sale of the rights to certain future asset-based fee
revenues, the Company would have realized a net loss of $855,000 (or $0.14
per share) for the nine-month period ending September 30, 1995.

Total revenues for the quarter ended September 30, 1996 were $2,386,000, a
decrease of $4,875,000 (or 67%) from $7,261,000 in the third quarter of
1995.  Excluding the 1995 net gain of $3,312,000, as described above,
revenues for the third quarter of 1996 would have decreased $1,563,000 or
40% compared to the same quarter in 1995.  This reduction in revenues is
primarily a result of the following:

  * A decrease in sales production related revenues, net of chargeback
    expense, of $724,000 or 33%.  This decrease is a result of gross sales
    production volumes declining $15 million or 35% in the third quarter of
    1996 as compared to the third quarter of 1995.  This decline in sales
    volume is primarily attributable to the termination of the Company's
    Florida operations in the third quarter of 1995 and the reconfiguring of
    the Company's Tennessee operations effective February 1, 1996.  (See
    "Trends and Uncertainties -- Declining Revenues").  These two operations
    combined for a $21 million decrease in gross sales production while the
    Company's remaining client base generated an increase of $5 million in
    gross sales production the third quarter of 1996 compared to 1995.
    Offsetting the decrease in gross sales production was an increase of
    approximately 9% in the combined annuity and mutual fund gross revenue rate
    as a result of a change in product mix and a restructuring of compensation
    rates.

  * A decrease in asset-based fee revenues of approximately $582,000 in
    the third quarter of 1996 compared to 1995 as a result of the sale of the
    rights to the portion of such asset-based fee revenues that related to the
    Company's Florida operations during the third quarter of 1995.

  * A decrease in transition fee revenue of approximately $343,000.  The
    Company generated transition fee revenue through contractual relationships
    with current and former client financial institutions of $100,000 and
    $443,000 in the third quarter of 1996 and 1995 respectively.

  * An increase in service fee revenues of $97,000 as a result of the
    reconfigured Tennessee operations.

Total revenues for the first nine months of 1996 were $7,773,000 versus
$17,429,000 for the comparable prior year period, a decrease of $9,656,000
or 55%.  Excluding the 1995 net gain and payment for the rights to hire
certain personnel (totaling $4,620,000), as previously described, revenues
in the nine-month period of 1996 would have decreased $5,036,000 or 39%
compared to the same period of 1995.  The decrease in revenues for the nine
month period of 1996 as compared to 1995 is also a result of a decrease in
gross sales production of 38%; a decrease in asset-based revenues of 51%;
and a decrease in transition fees of $343,000; offset by an increase in
service fee revenue of $260,000.

Total expenses for the quarters ended September 30, 1996 and 1995 were
$3,504,000 and $4,206,000, respectively.  Excluding the previously
described merger-related expenses of $704,000 and amortization of $78,000,
total expenses for the quarter ended September 30, 1996 would have been
$2,722,000, a decrease of $1,484,000 or 35% compared to the same period in
1995.  This decrease is primarily attributable to:

  * A $491,000 or 31% decrease in employee compensation and benefits
    primarily as a result of the discontinued Tennessee operations and a
    reduction in Corporate personnel with the downsized operations.

  * A $548,000 or 36% reduction in fees to financial institutions due to
    lower sales volume.

  * A reduction of $90,000 or 41% in salespersons' commissions also due to
    lower sales volume

  * A $355,000 or 41% reduction in the remaining base operating expenses
    primarily due to the reduction in client base and reduction in base
    corporate overhead expenses.

Total expenses for the nine months ended September 30, 1996 and 1995 were
$9,440,000 (or $8,405,000 excluding the previously described merger-related
expenses and amortization) and $14,221,000 respectively.  Excluding the
expenses described above in 1996, total expenses for the nine months ended
September 30, 1996 decreased $5,816,000 or 41% compared to the same period
in 1995.  This decrease is primarily a result of the same factors which
generated the decrease in third quarter 1996 compared to third quarter
1995.

Third Quarter 1996 Compared to Second Quarter 1996

The Company realized a net loss of $682,000 (or $0.11 per share) in the
third quarter of 1996 compared to net loss of $215,000 (or $.03 per share)
in the second quarter of 1996.  Included in the third quarter of 1996 but
not in the second quarter of 1996 were merger-related expenses of $704,000
($433,000 after estimated tax benefit or $0.07 per share).

Total revenues declined $161,000 or 6% to $2,386,000 in the third quarter
of 1996 from $2,547,000 in the second quarter of 1996.  The decrease is a
result of a 10% decrease in gross sales production offset by $100,000 in
revenues generated as a result of a transition agreement between the
Company and its Virginia client financial institution (See "Trends and
Uncertainties - Declining Revenues").  Total expenses in the third quarter
of 1996 were $3,504,000 versus $2,889,000 in the second quarter of 1996.
Excluding the $704,000 of merger-related expenses (See "Note 3.  Merger-
Related Costs"), third quarter expenses would have been $2,800,000
representing a decrease of $89,000 from second quarter expenses.

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

As of September 30, 1996, the Company had cash and cash equivalents of
approximately $2,837,000, a decrease of approximately $2,996,000 from
$5,833,000 in cash and cash equivalents at December 31, 1995.  The primary
reasons for the decrease in such amounts is as follows:

  * A payment of $1,250,000 in the first quarter of 1996 to USBA for a
    consulting agreement established in connection with a five year marketing
    alliance.

  * Income tax payments of $221,000.

  * Pre-tax losses incurred in the first nine months of 1996 of
    approximately $1,667,000 offset by non-cash expenses of approximately
    $424,000 relating to depreciation and amortization.  The tax benefit
    generated by such losses is expected to have a positive cash flow impact in
    future periods, primarily to be utilized on the expected net gain from the
    sale of rights to future asset fee revenues, as described below.

While the Company's cash balances were reduced, as described above, during
the first nine months of 1996, the Company's base operating expenses,
excluding non-cash expenses such as depreciation and amortization, as well
as merger-related costs have been reduced by more than $3.0 million in the
first nine months of 1996 as compared to the first nine months of 1995.

Subsequent to the end of the second quarter of 1996 the Company was
notified that its Virginia-based client financial institution will not
renew its contract with the Company after December 31, 1996.  Based on the
terms discussed and agreed upon, the Company will receive transition fees
of $250,000 through the end of the fourth quarter of the current year as
well as guarantees on production levels through the end of 1996, supported
by cost subsidies if necessary.  This event will have an impact on cash
flow in periods subsequent to December 31, 1996, however the Company
anticipates a one-time payment for such client's purchase of the right to
all future asset-based fees associated with the client's program at the end
of 1996.

Based on the Company's cash position as of September 30, 1996, as well as
the reduced operating expense base and the anticipated cash flow from the
sale of the rights to future asset fees at the end of 1996, as described
above, management believes it has sufficient capital resources to support
current operations and to pursue expansion of its business beyond its
current market place.

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

Declining Revenues

The Company's sales production decreased 35% when comparing the third
quarter of 1996 to the third quarter of 1995.  This decrease is primarily
attributed to the Florida  operations closing in the third quarter of 1995
and the transition of the Tennessee operations on February 1, 1996.  Sales
production decreased 10% in the third quarter of 1996 compared to the
second quarter.  Subsequent to the end of the second quarter of 1996 the 
Company was notified that its Virginia-based client financial institution will 
not renew its contract with the Company after December 31, 1996.  In response 
to this decline in sales production, the Company reduced base operating 
expenses by approximately $850,000 in the third quarter of 1996 compared 
to the third quarter of 1995.

In addition to the reduced cost structure, the Company reconfigured its
Tennessee operations in the first quarter of 1996 to provide sales support,
product development and back office support services on a fee basis.  The
fees generated by the Company include transaction-based fees (with a
monthly minimum) as well as an ongoing and increasing share of asset-based
fee revenues on the blocks of business generated prior to the transition.
Factoring in the minimum transactional fee revenues and the significantly
reduced cost structure the Company expects pre-tax operating results
generated by this client to be comparable to those operating results
generated by the same client when the Company provided its fully managed
program.

The Company continues to pursue expansion of its existing core business of
product distribution as well as support services for product distribution
with a more cost efficient and technology-based operating structure.  In
addition, the Company is pursuing opportunities to utilize its developed
strengths for new marketing media.

JMCG/USBA Merger

On April 3, 1996 the Company and USBA signed a letter of intent to
pursue a merger of the two companies based on a structure as a merger
of equals.  An Agreement and Plan of Merger memorializing the
intentions of the parties was approved by the Company's Board on May
20, 1996.  On August 26, 1996, the Company's Board concluded that,
based upon due diligence review and information then available to the
Board, the proposed combination was not in the best interests of the
Company's stockholders and noticed USBA of the Company's election to
terminate the Agreement.  The required fairness opinion from the
Company's financial advisor, which had been delivered to the Board on
May 20, 1996 by J. C. Bradford & Co., was also withdrawn.

The Company has since commenced litigation in connection with the
terminated Agreement and Plan of Merger.  The suit, which was filed in U.S.
District Court Southern District of California in San Diego on October 11,
1996, alleges various causes of action against USBA and certain individual
defendants and seeks rescission of JMCG's relationships with USBA as well
as damages and other relief.  On November 7, 1996, USBA answered the
complaint, asserted certain affirmative defenses and stated counterclaims
against the Company and certain individuals seeking specific performance of
the Plan of Merger and other relief (See "Legal Proceedings").
                   
                   PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

          On October 11, 1996, JMCG commenced litigation in
          connection with its terminated Agreement and Plan of
          Merger and the outstanding Marketing Agreement and
          Consulting Agreement with USBA Holdings, Ltd.  The suit,
          which was filed in U.S. District Court Southern District
          of California in San Diego, alleges various causes of
          action against USBA and certain individual defendants and
          seeks rescission of the Company's agreements with USBA as
          well as damages and other relief. On November 7, 1996,
          USBA answered the complaint, asserted certain affirmative
          defenses and stated counterclaims against the Company and
          certain individuals seeking specific performance of the
          Plan of Merger and other relief.  While the Company is
          confident of the merits of its claims against USBA, the
          outcome of the litigation is uncertain.  The costs
          associated with the terminated Agreement and Plan of
          Merger, previously capitalized, have been taken into
          expense in the third quarter.
       
          On July 7, 1995, the Florida Department of Insurance (the
          "Department") issued a Final Order in its administrative
          proceeding against the Company which was commenced on
          March 11, 1993. The enforcement of the majority of the
          Final Order has been stayed pending appeal.  JMC has
          complied with all operative aspects of the Final Order.
       
          JMC filed its appellate brief on November 13, 1995 and
          presented oral arguments on April 11, 1996.  The District
          Court of Appeal denied the Appeal on August 30, 1996 and
          upheld all but one portion of the Final Order.  JMC has
          petitioned for a review of its case by the Supreme Court
          of Florida.  On November 8, 1996, the Court granted the
          Company's Motion For Stay Of Proceedings pending
          disposition of the Petition for Review.  While management
          cannot predict the outcome of the appeal process, the
          Company anticipates no future financial impact as JMC
          ceased operations in Florida in October 1995.
       
          The Company's broker-dealer subsidiary, Priority
          Investment Services, Inc. (formerly Spear Rees & Co.),
          has been named as a defendant in lawsuits arising out of
          the sale of real estate limited partnerships to customers
          of Spear Rees & Co. and Rees Financial Group, Inc. and
          Rees Capital Group, Inc. ("Rees") prior to 1992.  Spear
          Rees & Co. was a full service brokerage firm which
          acquired the assets of Rees in September 1991.  In the
          first quarter of 1996, the Company reached a settlement
          with certain of the Plaintiffs in this case which was
          approved by the Bankruptcy Court on May 7, 1996, while
          other claims remain the subject of NASD arbitration.
          Management does not believe that resolution of any NASD
          arbitration which may be filed in the future will have a
          material adverse effect on the Company.

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

          The Annual Meeting of Stockholders of JMC Group, Inc.
          was held on October 7, 1996.  The following matter was
          submitted to a vote of security holders:

          Election of Directors:  Barton Beek, Robert A. Cervoni
          and Herbert G. Kawahara,  were elected to serve a three-
          year term, until the annual meeting of stockholders in
          1999, or until their successors are duly elected.

          The tally of voting for each nominee was as follows:

                                           For        Withheld
                                        ---------     --------
               Barton Beek              5,386,937      35,195
               Robert A. Cervoni        5,386,937      35,195
               Herbert G. Kawahara      5,386,937      55,195

          The term of office for each of Edward Baran, Charles H.
          Black, Brian J. Finneran, James K Mitchell, Robert G.
          Sharp and Donald E. Weeden continued after the meeting.

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:     November 14, 1996             /s/ James K. Mitchell
                                        -------------------------------
                                        James K. Mitchell, Chairman and
                                        Chief Executive Officer






Date:     November 14, 1996             /s/ D. Mark Carlson
                                        -------------------------------
                                        D. Mark Carlson, Senior Vice President 
                                        and Chief Financial Officer