_______________________________________________________________________________
                                       
                                 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, 1997                                      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, 1997, the registrant had 6,044,351 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,
                                                         1997           1996
                                                     ------------- ------------
   ASSETS                                                                  
     CURRENT ASSETS                                                           
        Cash and cash equivalents                    $   4,072,629 $  4,682,883
        Cash segregated under securities          
          regulations                                    2,422,866    1,247,231
        Receivables from insurance companies               396,242      674,409
        Receivable from financial institution                    -      325,000
        Income taxes receivable                            364,839      424,746
        Deferred tax asset                                 187,728      194,361
        Other assets                                       209,855      243,256
                                                     ------------- ------------
              TOTAL CURRENT ASSETS                       7,654,159    7,791,886
                                                                               
       Furniture, equipment and leasehold 
         improvements - net of accumulated
         depreciation and amortization of 
         $1,490,015 in 1997 and $1,466,390 in 1996         241,664      212,844
   
       Asset-based fees - net of accumulated 
         amortization of $725,701 in 1997 and 
         $635,836 in 1996                                  671,428      761,293
                                                     ------------- ------------
              TOTAL ASSETS                           $   8,567,251 $  8,766,023
                                                     ============= ============
   
   LIABILITIES AND STOCKHOLDERS' EQUITY                                        
     CURRENT LIABILITIES                                                       
       Accrued fees to financial institutions        $     147,073 $    321,609
       Customer funds segregated under securities        
         regulations                                     2,422,866    1,247,231
       Accrued expenses and other liabilities              193,688      491,556
       Allowance for contract cancellations                 48,450       53,813
       Accrued payroll and related expenses                118,433      133,911
                                                     ------------- ------------
              TOTAL CURRENT LIABILITIES                  2,930,510    2,248,120
                                                                               
   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 6,044,351 shares in 1997 
         and 6,218,898 shares in 1996                       60,443       62,189
       Additional paid-in-capital                          466,849      644,651
       Retained earnings                                 5,109,449    5,811,063
                                                     ------------- ------------
              TOTAL STOCKHOLDERS' EQUITY                 5,636,741    6,517,903
                                                     ------------- ------------
                TOTAL LIABILITIES AND STOCKHOLDERS' 
                  EQUITY                             $   8,567,251 $  8,766,023
                                                     ============= ============
                                                     
  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,
                                                      1997             1996
                                               ---------------   --------------
     REVENUES                                                                  
         Commissions                           $    1,022,328    $   2,244,812
         Interest                                      54,955           38,592
         Other                                            635          102,307
                                               ---------------   --------------
            TOTAL REVENUES                          1,077,918        2,385,711
                                               ---------------   --------------
     EXPENSES                                                                  
         Employee compensation and benefits           611,237        1,224,627
         Fees to financial institutions               366,066          993,269
         Professional fees                             71,218          675,445
         Rent                                          67,662          103,376
         Telephone                                     16,025           33,234
         Depreciation and amortization                 27,931          129,434
         Other general and administrative 
           expenses                                   142,198          344,687
                                                --------------    -------------
            TOTAL EXPENSES                          1,302,337        3,504,072
                                                --------------    -------------
         LOSS BEFORE INCOME TAXES                    (224,419)      (1,118,361)
                                                                               
     INCOME TAX BENEFIT                               (63,518)        (435,955)
                                               ---------------   --------------
         NET LOSS                              $     (160,901)   $    (682,406)
                                               ===============   ==============
                                                                               
     LOSS PER SHARE                            $        (0.03)   $       (0.11)
                                               ===============   ==============
     WEIGHTED AVERAGE SHARES                        6,044,351        6,218,898
                                                                          
                                             
     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,
                                                      1997         1996
                                               --------------- ---------------
     REVENUES                                                                 
        Commissions                            $    3,241,750  $    7,499,812
        Interest                                      171,004         162,328
        Other                                           9,446         110,856
                                               --------------- ---------------
         TOTAL REVENUES                             3,422,200       7,772,996
                                               --------------- ---------------
     EXPENSES                                                               
        Employee compensation and benefits          2,136,911       3,827,450
        Fees to financial institutions              1,171,925       3,097,129
        Professional fees                             243,966         797,916
        Rent                                          200,080         284,116
        Telephone                                      37,942         115,417
        Depreciation and amortization                  89,167         424,108
        Other general and administrative 
         expenses                                     601,920         894,319
                                               --------------- ---------------
         TOTAL EXPENSES                             4,481,911       9,440,455
                                               --------------- ---------------
       LOSS BEFORE INCOME TAXES                    (1,059,711)     (1,667,459)
                                                                             
     INCOME TAX BENEFIT                              (358,097)       (637,690)
                                               --------------- ---------------
       NET LOSS                                $     (701,614) $   (1,029,769)
                                               =============== ===============
                                                                              
     LOSS PER SHARE                            $        (0.12) $        (0.17)
                                               =============== ===============
     WEIGHTED AVERAGE SHARES                        6,059,576       6,212,231
                                                                          
                                             
   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,
                                                     1997            1996
                                               --------------   --------------
CASH FLOWS FROM OPERATING ACTIVITIES:                                        
  Net loss                                     $    (701,614)   $  (1,029,769)
  Adjustments to reconcile net loss to 
    net cash used by operating activities:
       Gain on sale of furniture and equipment        (6,625)          (1,998)
       Depreciation and amortization                  89,167          424,108
       Amortization of asset-based fees               89,865          185,573
       Deferred tax provision                          6,633          (53,875)
  Changes in assets and liabilities:     
       Cash segregated under securities 
         regulations                               1,175,635       (1,096,913)
       Receivables from insurance companies          278,167          (55,689)
       Receivable from financial institution         325,000            9,450
       Income taxes receivable                        59,907         (788,304)
       Other assets                                   30,450           (6,507)
       Accrued fees to financial institutions       (174,536)          29,046
       Customer funds segregated under                          
         securities regulations                   (1,175,635)       1,096,913
       Accrued expenses and other liabilities       (297,868)        (424,323)
       Allowance for contract cancellations           (5,363)         (12,050)
       Accrued payroll and related expenses          (15,478)           1,739
                                               --------------   --------------
         NET CASH USED BY OPERATING ACTIVITIES      (322,295)      (1,722,599)
                                               --------------   --------------
CASH FLOWS FROM INVESTING ACTIVITIES:                             
  Purchase of furniture, equipment and 
    leasehold improvements                          (116,036)         (55,341)
  Proceeds from sale of furniture and equipment        7,625           12,184
  Payment for consulting and marketing              
    agreement                                              -       (1,250,000)
                                               --------------   --------------
         NET CASH USED BY INVESTING ACTIVITIES      (108,411)      (1,293,157)
                                               --------------   --------------
CASH FLOWS FROM FINANCING ACTIVITIES: 
  Repurchase of common stock                        (194,548)               -
  Proceeds from stock options exercised               15,000           20,000
                                               --------------   --------------
         NET CASH PROVIDED (USED) BY FINANCING 
           ACTIVITIES                               (179,548)          20,000
                                               --------------   --------------
         NET DECREASE IN CASH AND CASH 
           EQUIVALENTS                              (610,254)      (2,995,756)
         
         CASH AND CASH EQUIVALENTS AT BEGINNING 
           OF PERIOD                               4,682,883        5,832,598
                                               --------------   --------------
         CASH AND CASH EQUIVALENTS AT END OF 
           PERIOD                              $   4,072,629    $   2,836,842
                                               ==============   ==============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW 
  INFORMATION                                             
  Cash paid for:                   
       Interest                                $           -    $         520
       Income taxes                            $       9,542    $     221,349
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING 
  ACTIVITIES                                      
  Warrants issued in connection with the 
    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, 1996 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, 1996.
            
NOTE 2.     NET LOSS PER SHARE

            Net loss per share amounts are computed based on the weighted
            average shares outstanding during the periods which include any
            dilutive stock options and warrants.
            
            In February 1997, the Financial Accounting Standards Board issued
            Statement of Financial Accounting Standards ("SFAS") No. 128,
            "Earnings Per Share".  This statement specifies the computation,
            presentation, and disclosure requirements for earnings per share
            for entities with publicly held common stock.  SFAS No. 128 is not
            in effect for the Company in the third quarter of 1997, but will
            be in effect for financial statements issued for periods ending
            after December 15, 1997, including interim periods.  The Company
            does not expect the adoption of SFAS No. 128 to have a material
            effect on its net earnings or loss per share.
            
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 for the
year ended December 31, 1996.

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

THIRD QUARTER 1997 COMPARED TO THIRD QUARTER 1996

The Company realized a net loss of $161,000 (or $0.03 per share) in the third
quarter of 1997 compared to a net loss of $682,000 (or $0.11 per share) for
the third quarter of last year.  The third quarter 1996 net loss included 
expenses related to the proposed merger with USBA Holdings, Inc.
(USBA) of $704,000 ($433,000 net after estimated tax benefit or $0.07 per 
share), as well as amortization of the payment of $78,000 ($48,000 net after 
estimated tax benefit or $.01 per share) for the marketing plan and the 
valuation of the warrant.  (See "USBA Marketing Agreement and Proposed Merger" 
in the Company's Annual Report on Form 10-K for the year ended December 31, 
1996.)  For the nine months ended September 30, 1997, the Company had a net 
loss of $702,000 (or $0.12 per share) compared to net loss of $1,030,000 (or 
$0.17 per share) during the first nine months of 1996.  The first nine months 
of 1996 net loss 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 net after estimated tax benefit or $0.02 per share).

Total revenues for the quarter ended September 30, 1997 were $1,078,000, a
decrease of $1,308,000 or 55% from $2,386,000 in the third quarter of 1996.
This reduction in revenues is primarily a result of the following:

 .  A decrease in sales production related gross revenues of $1,096,000 or
   69%.  This decrease is a result of gross sales production volumes declining
   $19 million or 67% in the third quarter of 1997 as compared to the third
   quarter of 1996.  This decline in sales volume is attributable to the
   termination of the Company's Virginia operation in the fourth quarter of 
   1996. See "Trends and Uncertainties -- Declining Revenues".  The combined 
   annuity and mutual fund gross revenue rate for the third quarter of 1997 as 
   compared to such rate in the third quarter of 1996 declined from 5.6% to 
   5.2% primarily as a result of changes in product mix.

 .  A decrease in asset-based fee revenues of approximately $204,000 in the
   third quarter of 1997 compared to 1996 as a result of the sale of the rights
   to the portion of such asset-based fee revenues that related to the
   termination of the Company's Virginia operation during the fourth quarter of
   1996.  Third quarter 1996 asset-based fees related to the Virginia operation
   totaled approximately $208,000.

Total revenues for the first nine months of 1997 were $3,422,000 versus
$7,773,000 for the comparable period in 1996, a decrease of $4,351,000 or 56%.
The decrease in revenues for the nine month period of 1997 as compared to 1996
is also a result of a decrease in gross sales production of 67% and a decrease
in asset-based revenues due primarily to the previously described termination
of the Company's Virginia operation and is offset by an increase in service
fee revenue.

Total expenses for the quarters ended September 30, 1997 and 1996 were
$1,302,000 and $3,504,000, respectively.  Excluding the previously described
merger-related expenses of $704,000 and amortization of $78,000 in the third
quarter of 1996, expenses for the third quarter 1997 would have decreased
$1,420,000 or 52% compared to the same period of 1996.  This decrease is
attributable to:

 .  A $627,000 or 63% reduction in fees to financial institutions due to
   lower sales volume.

 .  A reduction of $94,000 or 72% in salespersons' commissions also due to
   lower sales volume.

 .  A $699,000 or 44% reduction in the remaining base operating expenses
   primarily due to the downsizing of the Company's administrative and sales
   management functions and a reduction in personnel related to the termination
   of the Company's Virginia operation as previously discussed.

For the same reasons, total expenses for the nine months ended September 30,
1997 decreased $3,923,000 or 47% to $4,482,000 from $8,405,000 in the first
nine months of 1996, excluding the previously described merger-related
expenses and amortization.

THIRD QUARTER 1997 COMPARED TO SECOND QUARTER 1997

The Company realized a net loss of $161,000 (or $0.03 per share) in the third
quarter of 1997 compared to a net loss of $290,000 (or $0.05 per share) in the
second quarter of 1997.

Total revenues declined $60,000 or 5% to $1,078,000 in the third quarter of
1997 from $1,138,000 in the second quarter of 1997.  The decrease is a result
of a decrease in gross sales production of 13%.  Total expenses in the third
quarter of 1997 were $1,302,000 versus $1,562,000 in the second quarter of
1997, a reduction of $260,000 or 17%.  Such reduction is attributable to the
reduction in variable costs tied to sales volumes and a reduction in
personnel.

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

As of  September 30, 1997, the Company had cash and cash equivalents of
approximately $4,073,000, a decrease of approximately $610,000 from $4,683,000
in cash and cash equivalents at December 31, 1996.  Significant uses of cash
and cash equivalents include the following:

 .  A payment of $195,000 to repurchase stock from a former officer and
   director of the Company during the first quarter of 1997.

 .  A reduction of approximately $493,000 in current liability balances
   during the first nine months of 1997 primarily as a result of the transition
   of the operation and closing of the Company's facility in Virginia.

 .  Purchases of computer equipment and program development of $116,000.

 .  Pre-tax losses incurred in the first nine months of 1997 of
   approximately $1,060,000.

 .  These cash uses were offset, in part, by the receipt of $300,000 for the
   remaining balance of the proceeds from the 1996 fourth quarter sale of 
   rights to future asset-based fees, the receipt of a $431,000 federal income 
   tax refund, a reduction of $303,000 in current receivables balance during 
   the first nine months of 1997 and non-cash expenses of approximately 
   $209,000 relating to depreciation and amortization.

Future trail fees, both those due from the provider company 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 would then be 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 value are
supported by the sale of the rights to certain future fees in 1996 and prior
years.  The projected value of the future asset-based fees on the remaining
block of business at September 30, 1997 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 $6 million to $8
million, pre-tax.  Such estimated 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.

Based upon the Company's cash position as of September 30, 1997, Management
expects the Company will meet its operating and capital expenditure needs for
the remainder of its current fiscal year.

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

DECLINING REVENUES

The Company's gross sales production decreased 67% when comparing the third
quarter of 1997 to the third quarter of 1996.  This decrease is primarily
attributed to the termination of the Virginia operation in the fourth quarter
of 1996.  Responding to these decreases in revenues, the Company has reduced
its operating expenses by more than $699,000 as compared to the third quarter
of 1996.  The Company continues to explore new business development
opportunities and strategic alternatives including business combinations and
other transactions.

                         PART II.    OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

            The Company's broker-dealer subsidiary, JMC Investment Services,
            Inc. (JMCI), has been named as a defendant in a NASD arbitration
            regarding sales of real estate limited partnerships by Spear Rees
            & Co. (the predecessor to JMCI) between 1990 and 1993.  In
            addition, the Company and its subsidiaries may be involved in
            various legal and regulatory proceedings from time to time in the
            ordinary course of business.  Management does not believe that any
            such proceedings 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

            Not applicable.

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 6, 1997             /s/ James K. Mitchell
                                    ------------------------------------------
                                    James K. Mitchell, Chairman, President and
                                    Chief Executive Officer






Date: November 6, 1997             /s/ Daniel M. Harkins
                                    -----------------------------------------
                                    Daniel M. Harkins, Senior Vice President,
                                    General Counsel and Chief FinancialOfficer