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Next Financial Group Review

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Next Financial Group, Inc.

Next Financial Group, Inc.

A diversified financial services firm, Next Financial Group is a full-service broker-dealer registered with the Financial Industry Regulatory Authority, Inc. and an investment advisor registered with the U.S. Securities and Exchange Commission (SEC). Additionally, it’s a licensed insurance agency in all 50 states. 

Next Financial Group is headquartered in Houston with 25 affiliate offices across the country. The team of 451 investment advisory representatives (IARs), many of whom are broker representatives and insurance agents, oversees more than $1.65 billion in assets.

Next Financial Group Background

Next Financial was founded in 1999. It’s a wholly owned subsidiary of Next Financial Holdings, Inc., which is, in turn, an indirect wholly-owned subsidiary of Atria Wealth Solutions, Inc. Four employees and two board directors have small stakes.

One of the employees who have is a stakeholder is President Barry Knight, who has led the company since 2006. Before coming to Next Financial, Knight was a senior vice president and director of sales development at Pioneer Investments. 

What Types of Clients Does Next Financial Group Accept?

Through its IARs, the firm works with individuals who are and aren’t high net worth, pension and profit-sharing plans, charitable organizations, corporations and other business entities. 

Next Financial Group Minimum Account Sizes

Minimums vary, depending on the program and IAR. Generally, they range from $5,000 to $100,000, though they can be negotiated or waived at the firm’s discretion.

Services Offered by Next Financial Group

Next Financial offers investment programs and advisory services. It also provides brokerage services and insurance products.

Its investment programs include:

  • Next Advisor Account (NAA) 
  • Next Advisor Account II (NAA II)  
  • Next Advisor Managed Portfolio (AMP) 1
  • Next AMP 2 
  • Next AMP 3 
  • Next Select Platform  
  • Visionary Multi-Manager Program  
  • Variable Annuity Model Portfolios Program (VAMPP)
  • Investment Fiduciary & Retirement Plan Consulting  
  • Plan Participant Investment Advice Services  
  • Recommendation of third party money managers  
  • Educational workshops/seminars  
  • Consulting Services Program

The firm recommends its “unbundled” programs - NAA and AMP 1 - to investors who will trade infrequently. For more active investors, its wrap fee programs - NAA II, AMP 2 and AMP 3 - where brokerage, advisory and other fees are bundled into one fee, may be more cost effective. The Next Select Platform, managed by Lockwood Advisors, also has a wrap fee structure, but its investing options are more limited, primarily to certain mutual funds, exchange-traded funds (ETFs) and model portfolios. The Visionary Program uses selected sub-managers and/or model providers’ investment models and is managed by Envestnet. Finally, VAMPP is for sub-accounts within selected variable annuity contracts using model portfolios. 

Next Financial Group Investing Philosophy

To select investment strategies, Next Financial’s IARs primarily apply charting, fundamental and technical methods of analysis. The strategies they may use include long-term purchases, short-term purchases, asset allocation and rebalancing, dollar cost averaging, trading, short sales, margin and options.

With the Next Select Platform, investment decisions are determined by Next Financial’s investment committee, which uses both quantitative and qualitative analyses to construct its ETF and mutual fund allocation models. It also applies Modern Portfolio Theory and Monte Carlo simulations to test its models and to evaluate performance relative to risk. 

Fees Under Next Financial Group

Like most, if not all, firms, Next Financial collects management fees based on a percentage of the client’s assets under management (AUM). Annual fees for an NAA or NAA II account are negotiable up to a maximum of 2.50%. They’re also negotiable for AMP 1, 2 and 3, with the maximums provided in this tiered schedule:

AUM Annual Fees
  AMP 1 AMP 2 & 3
First $250,000  2.50% 2.75% 
Next $250,000 2.25% 2.50% 
Next $500,000 1.75% 2.00% 
Next $1.5 million 1.50% 1.75%
Next $2.5 million 1.25% 1.50%
Assets more than $5 million 1.00%  1.25%

Annual fees for the Next Select Platform include the advisory fee, program fee and manager fee (if applicable). Annual allowed maximums follow this tiered schedule:

Platform Assets Max Allowed Advisory Fee Program Fee
Representative Managed Program ETF and Mutual Fund Program Separately Managed Program Multi-manager Program
First $250,000 1.50% 0.20% 0.25% 0.35% 0.40%
Next $250,000 1.50% 0.175% 0.225% 0.325% 0.375%
Next $500,000 1.50% 1.50% 0.20% 0.30% 0.35%
Next $1 million 1.50% 1.00% 0.175% 0.25% 0.30%
Next $1 million 1.50% 0.80% 0.15% 0.20% 0.25%
Assets more than $3 million 1.00% 1.00% 0.80% 0.15% 0.20% 0.25%
Manager Fee N/A 0.10% 0 to 0.50% 0 to 0.50%

For the Visionary program, the annual program fee includes the advisory fee, platform fee, sponsor fee and manager fee (if applicable). They follow this tiered schedule:

Program Assets Max Allowed Advisory Fee Platform Fee (Equity & Balanced Strats.) Platform Fee (Mut Fund and ETF Strats) Sponsor Fee Manager(s) Fee
First $250,000 1.50%  0.13% 0.08% 0.25% 0 to 0.55%
Next $250,000 1.50%  0.13% 0.08% 0.25% 0 to 0.55%
Next $500,000  1.50%  0.13% 0.07% 0.25% 0 to 0.55%
Next $1 million 1.50%  0.11% 0.07% 0.25% 0 to 0.55%
Next $3 million 1.50%  0.11% 0.06% 0.25% 0 to 0.55%
Assets more than $5 million 1.50%  0.09% 0.06% 0.25% 0 to 0.55%  


For VAMPP accounts, the maximum annual total fee is 2.0% of variable annuity contract assets. It is made up of a program fee that will not exceed 0.50%, and the negotiated IAR may not exceed 1.0% (except for certain grandfathered accounts that are charged up to 1.5%). 

Next Financial Group Awards and Recognition

Next Financial is an eight-time winner of Investment Advisor Magazine’s Broker Dealer of the Year award, most recently in 2012. 

Also, in 2016, WealthManagement.com gave the firm its Best-in-Class Service Award and, in 2017, its Industry Award for Transition Support.

What to Watch Out For

As noted earlier, most IARs are also insurance agents and broker representatives. So though they charge fees for their advisory services, they do receive commissions from third parties in their other roles. 

Disclosures

In its most recent SEC filings, Next Financial had 23 disclosures within the past 10 years, with fines ranging from $250 to $750,000. Seven involved its IARs, seven were related to the broker-dealer side of its business, eight involved various state regulatory authorities and one, which was the most recent, was a disciplinary action that the SEC brought. In this most recent SEC order, which was resolved in March 2019, the SEC alleged that from January 2014 to December 2016, the firm received 12b-1 fees in connection to certain mutual funds that it purchased for, or recommended to, clients without disclosing the conflict of interest (there were share classes of the same funds at a lower cost). The firm agreed to a censure and cease-and-desist order and paid restitution to clients of $1,241,907.77 and prejudgment interest of $163,442.12.  

Opening an Account With Next Financial Group

To contact Next Financial, call its toll-free number, (877) 876-6398. Alternately, you can send a message on its site at https://www.nextfinancial.com/contact-us/.

Where Is Next Financial Group Located?

The firm’s main office is located at 2500 Wilcrest Drive, Suite 620, Houston, Texas 77042.

All information was accurate as of the writing of this article. 

Tips for Finding a Financial Advisor 

  • Interview advisor candidates in person - or at least over the phone. It’s the best way to get a sense of how comfortable he or she makes you feel. After all, few things are more personal than your finances, and you don’t want to feel self-conscious talking about your goals and dreams to the person who is supposed to help you realize them.
  • Use SmartAsset’s financial advisor matching tool. Simply answer questions about your financial situation and preferences, and the program will match you with up to three suitable advisors in your area.

How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about the cost of living in retirement for that location.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. This reflects the typical return on a conservative investment portfolio. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research