<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                        
                                   FORM 10-Q
(Mark One)

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

                  For the quarterly period ended June 30, 1997

                                       OR

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

      For the transition period from                  to
                                    ------------------  ---------------
                         Commission File Number 1-09772

                              PIMCO ADVISORS L.P.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                      <C>
                  Delaware                             06-1349805
     (State or other jurisdiction of     (I.R.S. Employer Identification No.)
      incorporation or organization)
</TABLE>

                           800 Newport Center Drive
                           Newport Beach, CA  92660
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (714) 717-7022
              (Registrant's telephone number, including area code)

              (Former name, former address and former fiscal year,
                         if changed since last report)

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


               APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

     Indicate by check mark whether the registrant has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 subsequent to the distribution of securities under a plan confirmed by a
court.

Yes       No 
   -------  -------

     As of June 30, 1997, 13,588,764 publicly traded Class A units of limited
partner interest and 26,557,391 privately-held Class A units of limited partner
interest were issued and outstanding. There were 800,000 units of general
partner interest issued and outstanding at June 30, 1997. In addition, there
were 32,991,856 privately-held Class B units of limited partner interest issued
and outstanding at June 30, 1997.

<PAGE>
 
                              PIMCO ADVISORS L.P.
                                        
                                     INDEX
 
PART I      FINANCIAL INFORMATION
     Item 1. Consolidated Financial Statements (Unaudited)
<TABLE>
<CAPTION>
<S>                                                             <C>
Consolidated Statements of Financial Condition as of
June 30, 1997 and December 31, 1996                             3
 
Consolidated Statements of Operations for the three months
ended June 30, 1997 and 1996                                    4
 
Consolidated Statements of Operations for the six months
ended June 30, 1997 and 1996                                    5
 
Consolidated Statements of Cash Flows for the six months
ended June 30, 1997 and 1996                                    6
 
Notes to  Consolidated Financial Statements                     7
 
     Item 2. Management's Discussion and Analysis of
        Financial Condition and Results of Operations           8-10
 
PART II     OTHER INFORMATION
 
      Item 5. Other information                                 11
 
      Item 6. Exhibits and Reports on Form 8-K                  11
</TABLE>

<PAGE>
 
PART I: FINANCIAL INFORMATION

     Item 1.  Financial Statements


                      PIMCO Advisors L.P. and Subsidiaries
                 Consolidated Statements of Financial Condition
                                  (Unaudited)

<TABLE> 
<CAPTION> 
                                                            June 30, 1997        December 31, 1996
                                                            -------------        -----------------
<S>                                                         <C>                  <C>
Assets
------

Current assets:
     Cash and cash equivalents                              $  29,395,899           $   41,311,545
     Fees receivable                                           72,018,525               66,272,441
     Short term investments                                    29,206,390               11,520,726
     Notes receivable                                           1,582,353                1,569,950
     Other assets - current                                     3,852,098                4,387,208
                                                            -------------           --------------
             Total current assets                             136,055,265              125,061,870

Investments in limited partnerships                             3,746,123                2,629,864
Fixed assets, net of accumulated depreciation                  10,273,448               10,561,346
Intangible assets, net of accumulated amortization            189,818,121              207,822,687
Other non current assets                                       19,223,396               12,424,534
                                                            -------------           --------------
             Total assets                                   $ 359,116,353           $  358,500,301
                                                            =============           ==============

Liabilities and Partners' Capital
---------------------------------

Current liabilities:
     Accounts payable, accrued expenses and other
      current liabilities                                   $  23,242,777           $   33,813,925
     Accrued compensation                                      48,582,255               26,027,732
                                                            -------------           --------------
             Total current liabilities                         71,825,032               59,841,657

Other non current liabilities                                   5,819,325                2,415,883
                                                            -------------           --------------
             Total liabilities                                 77,644,357               62,257,540
                                                            -------------           --------------
Partners' Capital
     General Partner (800,000 units issued and outstanding)     2,764,605                2,986,983
     Class A Limited Partners (40,146,155 units issued
      and outstanding)                                        194,261,070              205,420,612
     Class B Limited Partners (32,991,856 and 32,960,826
      units issued and outstanding)                            92,884,339               98,369,570
     Unamortized compensation                                  (8,438,018)             (10,534,404)
                                                            -------------           --------------
             Total Partners' Capital                          281,471,996              296,242,761
                                                            -------------           --------------
             Total liabilities and partners' capital        $ 359,116,353           $  358,500,301
                                                            =============           ==============
</TABLE> 
          
                            See accompanying notes.

                                       3
<PAGE>
 
                      PIMCO Advisors L.P. and Subsidiaries
                     Consolidated Statements of Operations
                                  (Unaudited)
                                        
<TABLE> 
<CAPTION> 
                                                                             For the three months ended
                                                                           -----------------------------
                                                                           June 30, 1997   June 30, 1996
                                                                           -------------   -------------
<S>                                                                        <C>             <C>
Revenues:
    Investment advisory fees:
      Private accounts                                                     $ 63,281,371    $ 54,887,506
      Proprietary Funds                                                      39,217,320      31,606,081
    Distribution and servicing fees                                          12,849,381      12,048,155
    Other                                                                       438,323         300,186
                                                                           ------------    ------------
          Total revenues                                                    115,786,395      98,841,928
                                                                           ------------    ------------
Expenses:
    Compensation and benefits                                                50,850,028      43,645,872
    Amortization of intangibles, Restricted Unit and Option Plans            10,353,444      10,266,615
    Commissions                                                              10,286,301       9,478,311
    General and administrative                                                6,404,186       4,268,931
    Occupancy and equipment                                                   2,569,645       2,314,438
    Other                                                                     9,415,758       5,689,109
                                                                           ------------    ------------
          Total expenses                                                     89,879,362      75,663,276
                                                                           ------------    ------------
                  Operating income                                           25,907,033      23,178,652

    Equity in income of limited partnership                                    (256,283)         56,201
    Other income                                                              1,662,042         779,280
                                                                           ------------    ------------
                  Income before taxes                                        27,312,792      24,014,133
    Provision for taxes                                                        (100,654)        206,548
                                                                           ------------    ------------
                  Net income                                               $ 27,413,446    $ 23,807,585
                                                                           ============    ============
Net income allocated to:
    General Partner                                                        $    270,100    $    263,290
    Class A Limited Partner units                                            13,554,360      13,212,632
    Class B Limited Partner units                                            13,588,986      10,331,663
                                                                           ------------    ------------
                  Total                                                    $ 27,413,446    $ 23,807,585
                                                                           ============    ============

Net income per unit:
    General Partner and Class A Limited Partner unit                       $       0.34    $       0.33
                                                                           ============    ============
    Class B Limited Partner unit                                           $       0.37    $       0.29
                                                                           ============    ============
Cash distributions paid per unit during the period:
    General Partner and Class A Limited Partner unit                       $      0.470    $      0.470
                                                                           ============    ============
    Class B Limited Partner unit                                           $      0.435    $      0.318
                                                                           ============    ============
</TABLE> 

                            See accompanying notes.

                                       4
<PAGE>
 
                      PIMCO Advisors L.P. and Subsidiaries
                     Consolidated Statements of Operations
                                  (Unaudited)
<TABLE>
<CAPTION> 
                                                                                       For the six months ended
                                                                                ---------------------------------------
                                                                                  June 30, 1997           June 30, 1996
                                                                                -----------------       -----------------
<S>                                                                             <C>                     <C> 
Revenues:
  Investment adivisory fees:
    Private accounts                                                            $     115,814,758       $     103,682,216
    Proprietary Funds                                                                  76,196,850              62,715,780
  Distribution and servicing fees                                                      25,672,759              23,063,662
  Other                                                                                 1,408,318                 600,322
                                                                                -----------------       -----------------
        Total revenues                                                                219,092,685             190,061,980
                                                                                -----------------       -----------------
Expenses:
  Compensation and benefits                                                            96,027,732              84,943,604
  Amortization of intangibles, Restricted Unit and Option Plans                        20,646,294              20,533,230
  Commissions                                                                          20,533,963              18,352,569
  General and administrative                                                           11,895,093               8,960,726
  Occupancy and equipment                                                               5,030,120               4,626,409
  Other                                                                                15,902,705              10,258,781
                                                                                -----------------       -----------------
        Total expenses                                                                170,035,907             147,675,319
                                                                                -----------------       -----------------
                Operating income                                                       49,056,778              42,386,661

  Equity in income of limited partnership                                                (227,171)                 91,551
  Other income                                                                          2,225,342               1,288,336
                                                                                -----------------       -----------------
                Income before taxes                                                    51,054,949              43,766,548
  Provision for taxes                                                                     452,640                 595,519
                                                                                -----------------       -----------------
                Net income                                                      $      50,602,309       $      43,171,029
                                                                                =================       =================
Net income allocated to:
  General Partner                                                               $         529,622       $         508,325
  Class A Limited Partner units                                                        26,577,844              25,501,465
  Class B Limited Partner units                                                        23,494,843              17,161,239
                                                                                -----------------       -----------------
                Total                                                           $      50,602,309       $      43,171,029
                                                                                =================       =================
Net income per unit:
  General Partner and Class A Limited Partner unit                              $            0.66       $            0.64
                                                                                =================       =================
  Class B Limited Partner unit                                                  $            0.64       $            0.47
                                                                                =================       =================
Cash distributions paid per unit during the period:
  General Partner and Class A Limited Partner unit                              $           0.940       $           0.940
                                                                                =================       =================
  Class B Limited Partner unit                                                  $           0.899       $           0.762
                                                                                =================       =================
</TABLE> 
                            See accompanying notes.

                                       5
<PAGE>
 
                      PIMCO Advisors L.P. and Subsidiaries
                     Consolidated Statements of Cash Flows
                                  (Unaudited)

<TABLE> 
<CAPTION> 

                                                                                               For the six months ended
                                                                                          ----------------------------------
                                                                                          June 30, 1997        June 30, 1996
                                                                                          -------------        -------------
<S>                                                                                       <C>                  <C>
Cash flows from operating activities:
   Net income                                                                             $  50,602,309        $  43,171,029
   Adjustments to reconcile net income to net cash provided by operating activities:
      Depreciation, amortization                                                             21,484,293           19,553,491
      Issuance of restricted units in lieu of directors fees                                    121,119                   --
      Restricted Unit and Option Plans                                                        2,641,728            2,528,664
      Equity in loss (income) of limited partnerships                                           227,171              (91,551)
      Unrealized (gain) loss on investments                                                    (764,526)             215,948
      Change in operating assets and liabilities:   
        Fees receivable                                                                      (5,746,085)          (1,317,520)
        Other assets                                                                         (7,742,364)          (4,056,598)
        Accounts payable, accrued expenses and other current liabilities                    (10,571,149)          10,283,847
        Accrued compensation                                                                 22,554,523           18,397,759
        Other liabilities                                                                     3,403,443              (37,495)
      Other                                                                                         910               17,767
                                                                                          -------------        -------------
        Net cash provided by operating activities                                            76,211,372           88,665,341
                                                                                          -------------        -------------

Cash flows from investing activities:
   Purchases of fixed assets                                                                 (1,493,357)          (1,330,004)     
   Proceeds from sale of fixed assets                                                               400              579,970
   Notes receivable advances                                                                   (233,572)            (573,512)
   Purchase of investments                                                                  (35,400,874)                  --
   Sale of investments                                                                       19,601,306              440,075
   Investments in limited partnerships                                                       (2,465,000)            (500,000)
                                                                                          -------------        -------------
        Net cash used in investing activities                                               (19,991,097)          (1,383,471)
                                                                                          -------------        -------------

Cash flows from financing activities:
   Cash distributions paid                                                                  (68,135,921)         (63,582,035)
                                                                                          -------------        -------------
        Net cash used in financing activities                                               (68,135,921)         (63,582,035)
                                                                                          -------------        -------------
   
Net (decrease) increase in cash and cash equivalents                                        (11,915,646)          23,699,835

Cash and cash equivalents, beginning of period                                               41,311,545           34,915,170
                                                                                          -------------        -------------
Cash and cash equivalents, end of period                                                  $  29,395,899        $  58,615,005
                                                                                          =============        =============

Supplemental disclosures:
   Taxes paid                                                                             $     238,845        $     338,085
                                                                                          =============        =============
   Interest paid                                                                          $      67,083        $          --
                                                                                          =============        =============

</TABLE> 

                            See accompanying notes.

                                       6
<PAGE>
 
                              PIMCO Advisors L.P.
                   Notes to Consolidated Financial Statements
                                  (Unaudited)

1)   The condensed consolidated financial statements included herein have been
prepared without audit in accordance with the instructions to Form 10-Q pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. In the opinion of
PIMCO Partners, G.P., the General Partner, all adjustments, consisting only of
normal recurring adjustments, necessary for a fair statement of (a) the
financial condition at June 30, 1997 and December 31, 1996, (b) the results of
operations for three-month and six-month periods ended June 30, 1997 and 1996,
and (c) the cash flows for the six-month periods ended June 30, 1997 and 1996,
for PIMCO Advisors L.P. ("PIMCO Advisors") have been made. It is suggested that
these unaudited condensed consolidated financial statements be read in
conjunction with the consolidated financial statements and notes included in
PIMCO Advisors Annual Report on Form 10-K for the year ended December 31, 1996.
Certain reclassifications have been made to conform the prior period
presentation to the current period presentation. These interim results may not
be indicative of the results which may occur in the future. (See Item 2-
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Results of Operations).

2)   Earnings per unit are computed under the two-class method and are based on
the weighted average number of units outstanding, assuming the exercise of
dilutive unit options. See Exhibit 11 for the computation of the weighted
average number of units outstanding during the periods.

     Distributions, on the units outstanding, are paid quarterly in arrears to
unitholders of record as of the thirtieth day of the first month following each
quarter-end.

3)   On February 13, 1997, PIMCO Advisors and its affiliate, Thomson Advisory
Group Inc. ("TAG Inc."), and Oppenheimer Group, Inc. and its subsidiary,
Oppenheimer Financial Corp. signed a definitive agreement for TAG Inc. to
acquire a one-third, managing general partner interest in Oppenheimer Capital (a
general partnership), the 1 percent general partner interest in Oppenheimer
Capital, L.P. and 100% of the stock of Advantage Advisers, an affiliate of
Oppenheimer Group, which manages eight closed-end funds. The transaction covers
only the private interests Oppenheimer Group holds in Oppenheimer Capital and
Oppenheimer Capital, L.P. and does not include the publicly traded units of
Oppenheimer Capital, L.P. On July 22, 1997 an amended and restated agreement was
signed reflecting minor financial and structural modifications. The acquisition
is subject to certain client, lender and other approvals, and is expected to
take up to six months to complete.

     The amended agreement provides for the acquisition by TAG Inc. of the above
listed assets through a merger with Oppenheimer Group, Inc. in exchange for
total consideration of approximately $230 million (formerly $233 million) in
convertible preferred stock to be issued by TAG Inc. and the assumption of
approximately $32 million of debt. Subsequently, TAG Inc. will contribute all of
the acquired interests to PIMCO Advisors in exchange for approximately $262
million of newly issued Class A Limited Partner Units at $25.50 per unit. The
original agreement resulted in the contribution of only the general partner
interest in Oppenheimer Capital to PIMCO Advisors, in exchange for approximately
$233 million of newly issued Class A Limited Partner Units, at $25.50 per unit.
PIMCO Advisors may be obligated in certain circumstances to purchase such
convertible preferred stock for its issue price. PIMCO Advisors will account for
this transaction using the purchase method. After the closing, operating results
for PIMCO Advisors will include its proportionate share of the operating results
of Oppenheimer Capital.

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

PIMCO Advisors L.P. and subsidiaries (the "Partnership" or "PIMCO Advisors") are
primarily involved in investment advisory services. The Partnership's strategy
is to pursue growth by marketing the investment management expertise,
performance record and reputation of its six institutional investment management
firms (the "Investment Management Firms"). The Investment Management Firms are
as follows:

          Pacific Investment Management Company ("Pacific Investment
          Management") and its wholly owned subsidiary, StocksPLUS Management,
          Inc. ("StocksPLUS"), manages primarily fixed income investments, with
          approximately $99.4 billion in assets under management;

          Columbus Circle Investors ("CCI") and its wholly owned subsidiary,
          Columbus Circle Trust Company ("CCTC"), manages primarily equity and
          equity related investments, with approximately $11.4 billion in assets
          under management;

          Cadence Capital Management ("Cadence") manages equity and equity
          related investments, with approximately $4.1 billion in assets under
          management;

          Parametric Portfolio Associates ("Parametric"), manages equity and
          equity related investments, with approximately $2.2 billion in assets
          under management;

          NFJ Investment Group ("NFJ"), manages equity and equity related
          investments, with approximately $1.9 billion in assets under
          management; and

          Blairlogie Capital Management ("Blairlogie"), manages equity and
          equity related investments, with approximately $887 million in assets
          under management.

     PIMCO Advisors, together with the Investment Management Firms, sponsors and
manages mutual funds for both institutional and retail investors.

     PIMCO Funds.  In January 1997, the Partnership restructured its proprietary
mutual funds into a single fund family called "PIMCO Funds" which is comprised
of two series: (i) PIMCO Funds: Pacific Investment Management Series ("PIMCO
Funds PIMS Series"), 20 funds advised by Pacific Investment Management, and
(ii) PIMCO Funds: Multi-Manager Series ("PIMCO Funds MMS Series"), 21 funds
advised by the Partnership and subadvised by the Investment Management Firms and
one independent subadvisor. The PIMCO Funds PIMS Series are primarily fixed
income funds and the PIMCO Funds MMS Series are primarily equity funds. All
PIMCO Funds are offered in up to five different share classes: institutional and
administrative share classes primarily for institutional investors and, for
retail investors, Class A shares (which are "front end" load), Class B shares
(which are "back-end load"), and Class C shares (which are "level load").
The PIMCO Funds now feature a "unified fee" structure which has specified
advisory and administrative fees per fund. As a result, the Partnership and
Pacific Investment Management (and not the PIMCO Funds) bear the risk of
increases in service costs (including of third-party service providers such as
transfer agents) and will directly benefit from decreases in those costs.

RESULTS OF OPERATIONS FOR 1997 COMPARED TO 1996

PIMCO Advisors derives substantially all its revenues and net income from
advisory fees for investment management services provided to its institutional
and individual clients and advisory, distribution and servicing fees for
services provided to its two proprietary series of mutual funds ("Proprietary
Funds").

Generally, such fees are determined based upon a percentage of client assets
under management and are billed quarterly to institutional clients, either in
advance or arrears, depending on the agreement with the client, and monthly in
arrears to Proprietary Funds. Revenues are determined in large part based upon
the level of assets under management; which itself is dependent upon factors
including market conditions, client decisions to add or withdraw assets from
PIMCO Advisors management and from PIMCO Advisors ability to attract new
clients. In addition, PIMCO Advisors has certain accounts which are subject to
performance based fee schedules wherein performance relative to the S&P 500
Index or other benchmarks over a particular time period can result in additional
fees. Such performance based fees can have a significant effect on revenues, and
provide an opportunity to earn higher fees (as well as lower) than could be
obtained under fee arrangements based solely on a percentage of assets under
management.

                                       8
<PAGE>
 
PIMCO Advisors consolidated 1997 second quarter revenues, including those of its
wholly owned distributor PIMCO Funds Distribution Company ("PFD"), were $115.8
million compared to $98.8 million in the second quarter of 1996, up $17.0
million. Advisory revenues were $102.5 million in the second quarter of 1997
compared to $86.5 million for the same period in 1996, up $16.0 million. For the
six months ended June 30, 1997 PIMCO Advisors consolidated revenues were $219.1
million compared to $190.1 milllion in the same period of 1996. Revenues at the
distributor for the first half of 1997 increased to $30.1 million in 1997 from
$26.3 million in 1996. Advisory revenue increases resulted from both the
commitment of new assets by institutional clients and from market appreciation.
Performance based fees amounted to $9.9 million during the second quarter of
1997 as compared to $7.9 million during the same period in 1996. For the six
months ended June 30, 1997 performance fees increased to $11.5 million, from
$11.4 million in the comparable period of 1996. The increase in performance
based fees occurred principally in fixed income portfolio products seeking to
outperform relative benchmarks.

Revenues by operating entity were as follows:

<TABLE> 
<CAPTION> 
                                  Three Months Ended     Six Months Ended
                                       June 30,               June 30,
                                    1997      1996        1997      1996
                                  --------  --------    --------  --------
<S>                               <C>       <C>         <C>       <C> 
Pacific Investment Management     $   69.0  $   56.1    $  126.1  $  107.2
CCI                                   14.6      16.2        29.5      31.7
Cadence                                5.6       4.4        10.7       8.5
Parametric                             1.1       0.9         2.0       1.7
NFJ                                    2.0       1.8         3.9       3.5
Blairlogie                             1.1       0.9         2.1       1.9
PFD                                   14.6      13.7        30.1      26.3
Other                                  7.8       4.8        14.7       9.3
                                  --------  --------    --------  --------
                                  $  115.8  $   98.8    $  219.1  $  190.1
                                  ========  ========    ========  ========
</TABLE> 

Compensation and benefits in the second quarter of 1997 of $50.9 million were
$7.2 million higher than the same period in 1996. For the six month period, this
cost category increased from $85.0 million in 1996 to $96.0 million in 1997.
These increases reflect additional staffing, at both Pacific Investment
Management and CCI, as well as higher profit sharing expenses which are based on
profits of each of the investment management subsidiaries.

Commission expenses, incurred by PFD related to sales and servicing of retail
mutual funds, increased $808,000 to $10.3 million in the second quarter of 1997
compared to the same period a year ago, and increased $2.2 million to $20.5
million for the first six months of 1997 compared to 1996, reflecting higher
trail commissions due to an increased level of qualifying assets, as well as
increased "up front" commissions on higher current sales levels.

General and administrative expenses amounted to $6.4 million during the second
quarter of 1997, an increase of $2.1 million over the same period a year ago.
This cost category increased by $2.9 million to $11.9 million for the first half
of 1997 compared to 1996. This increase can be primarily attributed to the
conversion of the retail share classes of the PIMCO Funds to a fixed
administrative fee basis resulting in increases to this cost category for
expenses previously borne directly by the funds. There is a corresponding
increase in revenues related to this conversion. These incremental costs account
for substantially all of this increase.

Occupancy and equipment increased by $255,000 to $2.6 million in the second
quarter of 1997 from the same period a year ago; during the first six months of
1997 these costs increased $404,000 to $5.0 million compared to the same period
in 1996. The increase in this expense category can be attributed primarily to
additional office space and equipment as a result of the additional staffing
discussed above.

Other expenses in the second quarter of 1997 increased by $3.7 million from
1996. Such costs for the first six months of 1997 increased $5.6 million to
$15.9 million compared to the same period in 1996 due principally to increases
in marketing and promotional costs and professional fees as well as other
increases reflective of inflation and increased staffing.

Net income per unit is computed under the two-class method which allocates net
income to Class A and Class B Limited Partner units in proportion to the
Operating Profit Available for Distribution for each class. Operating Profit
Available for 

                                       9
<PAGE>
 
Distribution is defined by PIMCO Advisors partnership agreement and is computed
as the sum of net income plus non-cash charges from the amortization of
intangible assets, non-cash compensation expenses arising from option and
restricted unit plans and losses of any subsidiary which is not a flow-through
entity for tax purposes. Class A Limited Partner and General Partner units are
entitled to a priority distribution of $1.88 per unit per year until December
31, 1997. Because of this, the amount of Operating Profit Available for
Distribution allocated to such units can be greater than the amount allocated to
Class B Limited Partner units. In addition, because of the priority
distribution, the initial dilution to net income per unit from the assumed
exercise of unit options is currently applied entirely to Class B Limited
Partner units. As a result, the net income allocated per Class A Limited Partner
and General Partner units is currently greater than the net income allocated per
Class B Limited Partner unit.

CAPITAL RESOURCES AND LIQUIDITY

PIMCO Advisors and its predecessor entities' combined business has not
historically been capital intensive. In general, working capital requirements
had been satisfied out of operating cash flow or short-term borrowings. PIMCO
Advisors will make quarterly profit-sharing payments and distributions to its
unitholders. PIMCO Advisors may need to finance profit-sharing payments using
short-term borrowings.

PIMCO Advisors had approximately $58.6 million of cash and cash equivalents and
short-term investments at June 30, 1997 compared to approximately $52.8 million
at December 31, 1996. PIMCO Advisors liquidity not otherwise used for quarterly
distributions will be used for general purposes including profit-sharing
payments and for brokers' commissions on sales of mutual fund shares distributed
without a front-end sales load. PIMCO Advisors believes that the level of such
commissions may increase in the future due to the introduction of new products
and mutual fund pricing structures which may require an alternate financing
source.

The Partnership distributes substantially all of its "Operating Profit Available
for Distribution", after appropriate reserves, to its partners. Distributions
are paid quarterly, in arrears, on the units outstanding to unitholders of
record on the thirtieth day of the first month following each quarter-end.
During the first six months of 1997, the Partnership distributed $0.940 per
Class A Limited Partner and General Partner unit and $0.899 per Class B Limited
Partner unit related to the fourth quarter of 1996's and first quarter of 1997's
earnings.  During the second quarter of 1997, the Partnership distributed $0.47
per Class A Limited Partner and General Partner unit and $0.435 per Class B
Limited Partner unit related to the first quarter of 1997's earnings. The
Partnership declared a second quarter distribution of $0.47 per Class A Limited
Partner and General Partner unit payable to holders of record on July 30, 1997.
The payment date for this distribution is August 15, 1997. The Partnership also
declared a second quarter distribution of $0.505 per Class B Limited Partner
unit payable to holders of record on July 30, 1997. The payment date for this
distribution is August 30, 1997.

PIMCO Advisors currently has no long-term debt. In April 1996, the Partnership
obtained a $25 million, four year revolving line of credit for working capital
purposes. There was no outstanding balance at June 30, 1997, nor was the
facility utilized during the quarter ended June 30, 1997.

ECONOMIC FACTORS

The general economy including interest rates, inflation and client responses to
economic factors will affect, to some degree, the operations of PIMCO Advisors.
As a significant portion of assets under management are fixed income funds,
fluctuations in interest rates could have a material impact on the operations of
PIMCO Advisors. PIMCO Advisors advisory business is generally not capital
intensive and therefore any effect of inflation, other than on interest rates,
is not expected to have a significant impact on its operations or financial
condition. Client responses to the economy, including decisions as to the amount
of assets deposited may also impact the operations of PIMCO Advisors. Any
resulting revenue fluctuations may or may not be recoverable in the pricing of
services offered by PIMCO Advisors.

  During the first six months of 1997, assets under management for PIMCO
Advisors and its subsidiaries increased $9.9 billion. While net cash inflows for
PIMCO Advisors, as a whole, were significant ($2.4 billion during the first six
months of 1997), CCI experienced substantial net cash outflows ($3.9 billion
during the first six months of 1997) predominantly from its "large cap" separate
account clients during this period, attributable in large part to
underperformance measured against relevant benchmarks. This trend started in
1995 and has continued into the third quarter of 1997, although the rate of net
outflow has declined subsequent to June 30, 1997.

                                       10
<PAGE>
 
PART II:  OTHER INFORMATION

Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K

     (a)  Exhibits

     11  Computations of Net Income Per Unit.

     27  Financial Data Schedule.

     (b)  Reports on Form 8-K

               No reports on Form 8-K were filed during the second quarter
               of 1997.

               A report on Form 8-K was filed on July 23, 1997 disclosing the
               Amended and Restated Agreement and Plan of Merger dated as of
               July 22, 1997 by and among Oppenheimer Group, Inc., Oppenheimer
               Financial Corp., the Seller Trust under Declaration of Trust
               dated July 22, 1997, the Indemnity Trust under Declaration of
               Trust dated July 22, 1997, PIMCO Advisors L.P., PIMCO Advisors
               Inc., PAI Transitory Corp. and Thomson Advisory Group Inc.

                                       11
<PAGE>
 
                                   SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.



                                         PIMCO Advisors L.P.


                                         By /s/ William D. Cvengros
                                            -----------------------
                                            William D. Cvengros
                                            Chief Executive Officer


                                         By /s/  Robert M. Fitzgerald
                                            -------------------------
                                            Robert M. Fitzgerald
                                            Principal Accounting Officer



August 13, 1997