Former Morgan Stanley Exec Ketterer Expands Indie Venture
Former Morgan Stanley executive Doug Ketterer’s Atria Wealth Solutions on Tuesday said it is acquiring independent broker-dealer Next Financial Group., its fourth announced purchase since he co-founded the firm two years ago.
Houston, Texas-based NEXT, which bellows “Payouts Up to 98%” on one of its websites, has about 500 independent brokers with $13 billion in assets under administration, Atria said in a news release. The acquisition follows the New York company’s April 2018 announcement that it is buying the 900-broker Cadaret, Grant & Co. and its 2017 purchase of sister broker-dealers Cuso Financial Services and Sorrento Pacific Financial.
The fledgling independent brokerage operation, which is backed by private equity firm Lee Equity Partners, will have about 2,000 advisors and $65 billion in assets when all the deals close, according to the announcement.
“We’re very excited,” Ketterer said in a brief interview from Houston on Tuesday morning as he was about to address a Next ‘town hall’ meeting. He chuckled but gave no response when asked if Atria will retain Next’s payout plan.
The independent brokerage model is a low-margin business in part because of the much higher payouts that brokers receive compared with those who are W-2 employees of broker-dealers.
Next Financial president Barry G. Knight will remain president of the unit, which reportedly has been on the block for several years.
“It has taken us a long time to find a partner who embodies our values as an organization and shares our passion to offer advisors a clear path to growth,” Knight said in a prepared statement.
Next was founded in 1998. Knight, a 32-year brokerage industry veteran who began his career with bank-owned brokers Empire National and Barnett Investments, joined in 2007 from mutual fund company Pioneer Funds Distributor, according to his BrokerCheck history
In addition to the brokerage operation, Atria plans to purchase its affiliates Next Financial Insurance Services Company and Visionary Asset Management.
“As Atria continues to build and grow within the independent advisor channel, we identified Next as a perfect partner in our mission to reinvent the entirety of the independent wealth advisor service model,” Ketterer said in a statement.
Ketterer left Morgan Stanley in February 2015 after 27 years in which he rose to senior sales and field strategy positions. He founded Atria in 2017 with Eugene Elias, former head of Morgan Stanley’s advisor workstation technology group, and Kevin Beard, who oversaw strategic acquisitions at independent broker-dealer AIG Advisor Group.