<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549

                                   FORM 10-Q

 X             Quarterly Report Pursuant to Section 13 or 15 (d)
---                 of the Securities Exchange Act of 1934
  
                For the Quarterly Period Ended December 31,1996

                                      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 No. 0-19614


                                 H.D. VEST, INC.
            (Exact name of registrant as specified in its charter)

                    Texas                                       75-2154244
      --------------------------------                 -------------------------
      (State or other jurisdiction of                       (IRS Employer ID.)
       incorporation or organization)

          433 E. Las Colinas Blvd., Third Floor, Irving, Texas 75039
             (Address of principal executive offices and zip code)

       Registrant's telephone number, including area code (972) 863-6000

 Indicate by check  mark  whether  the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of  1934  during
the  preceding 12 months, and (2) has been subject to such requirements for the
past 90 days.

                             Yes  X       No
                                -----       -----      


Number of shares of the registrant's Common Stock outstanding as of January 31,
1997: 5,423,341.

                                       1
<PAGE>
 
                                H.D. VEST, INC.

                                     INDEX


PART I.   Financial Information                                       Page No.
          ---------------------                                       --------

          Item 1.  Financial Statements (Unaudited)

               Consolidated Statements of Financial
                Position--December 31, 1996 and
                 September 30, 1996                                      3-4

               Consolidated Statements of Operations--
                Three Months Ended December 31, 1996 and
                 December 31, 1995                                        5

               Consolidated Statements of Cash Flows--
                Three Months Ended December 31, 1996 and
                 December 31, 1995                                        6

               Notes to Consolidated Financial Statements               7-8


          Item 2.  Management's Discussion and Analysis of
                    Financial Condition and Results of
                     Operations                                         9-11

PART II.  Other Information
          -----------------

          Item 1.    Legal Proceedings                                    12

          Item 6.    Exhibits and Reports on Form 8-K                     12


               Signatures                                                 13

                                       2
<PAGE>
 
PART I.  FINANCIAL INFORMATION
------------------------------

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)
-----------------------------------------


                                H.D. VEST, INC.

                 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

                                    ASSETS

<TABLE>
<CAPTION>
                                       December 31,            September 30,
                                           1996                   1996
                                       (Unaudited)
                                       -----------              ------------
<S>                                    <C>                      <C>
Current assets:
 Cash and cash equivalents             $ 7,178,020              $ 6,734,846
 Commissions and accounts
  receivable                             4,053,902                4,509,419
 Notes receivable - related parties        376,593                  579,660
 Deferred taxes                            226,118                  480,370
 Receivable from affiliate                 164,807                  130,280
 Prepaid expenses                          105,877                   91,377
                                         ---------               ----------
 
    Total current assets                12,105,317               12,525,952
                                        -----------              ----------
 
Property and equipment, net
 of accumulated depreciation
 of $2,391,669 at December 31,
 1996, and $2,255,821 at September
 30, 1996                                1,568,266                1,673,472
 
Notes receivable - related parties       2,127,613                2,084,411
 
Other assets                               635,136                  666,924
                                       ------------             -----------
 
                                       $16,436,332              $16,950,759
                                       ===========              ===========
</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements

                                       3
<PAGE>
 
                                H.D. VEST, INC.

                 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

                   LIABILITIES AND SHAREHOLDERS' INVESTMENT

<TABLE>
<CAPTION>
                                       December 31,            September 30,
                                           1996                     1996
                                       (Unaudited)
                                      -------------            --------------
<S>                                   <C>                      <C>   
Current liabilities:
 Accounts payable and accrued
   expenses                            $  4,722,424             $ 5,583,156
 Amounts due on clearing
   transactions                             692,791                 729,591
 Commissions payable                      3,493,223               3,317,096
 Payable to officer and directors            24,994                  74,994
                                        -----------             -----------
 
   Total current liabilities              8,933,432               9,704,837
                                        -----------             -----------
 
Obligations under capital leases,
 excluding current installments             598,025                 676,844
 
Other noncurrent liabilities                770,697                 636,435
 
Unearned revenues                           230,000                 931,110
 
Shareholders' investment:
 Preferred stock, $6 par value;
  250,067 shares outstanding              1,500,402               1,500,402
 Common stock, $.05 par value;
  100,000,000 shares authorized;
  5,423,341 issued and outstanding          271,167                 271,167
 Additional paid-in capital               5,080,834               5,080,834
 Deficit                                   (948,225)             (1,850,870)
                                        -----------              ----------
 
   Total shareholders' investment         5,904,178               5,001,533
                                        -----------             -----------
 
                                        $16,436,332            $ 16,950,759
                                        ===========            ============
 
</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements

                                       4
<PAGE>
 
                                H.D. VEST, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                                  (Unaudited)
<TABLE>
<CAPTION>
                                         Three Months Ended  December 31,
                                         --------------------------------
                                                1996             1995
                                           ------------     ------------
<S>                                        <C>              <C>
Revenues:
  Commissions                              $ 13,857,480     $10,638,298
  Portfolio management fees                   2,343,272       1,268,428
  Marketing and education fees                2,089,759       1,389,753
  Interest                                      166,748         106,234
  Other                                         270,198         214,886
                                            -----------     -----------
     Total revenues                          18,727,457      13,617,599
                                            -----------     -----------
 
Expenses:
  Commissions                                 9,749,645       7,296,958
  Portfolio management fees                   1,319,287         667,638
  General and administrative                  3,954,971       2,720,882
  Representative development                  1,728,924       1,658,717
  Representative recruiting                     316,503         112,373
  Interest                                       19,899          17,699
                                            -----------     -----------
     Total expenses                          17,089,229      12,474,267
                                            -----------     -----------
 
Net income before taxes                       1,638,228       1,143,332
 
Income taxes                                    703,699         136,802
                                            -----------     -----------
 Net income                                 $   934,529     $ 1,006,530
                                            ===========     ===========
 
Net income per common shae                  $      .17      $       .18
                                            ===========     ===========    
Weighted average number of
  common shares outstanding                   5,423,341       5,423,341
                                            ===========     ===========
 </TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements

                                       5
<PAGE>
 
                                H.D. VEST, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
<TABLE>
<CAPTION>

                                                 Three Months Ended December 31,
                                                ---------------------------------
                                                   1996                  1995
                                                ----------            -----------
<S>                                              <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                                  
  Net income                                    $  934,529             $1,006,530
  Noncash items included in income -                                   
    Depreciation and amortization                  202,078                208,738
    Deferred tax provision                         254,252                      -
  Net changes in certain working                                       
   capital and other components                                        
    Commissions and accounts receivable            455,517                111,188
    Receivable from affiliate                      (34,527)              (103,478)
    Prepaid and other assets                       195,768                157,241
    Payable to officers and directors              (50,000)                     -
    Amounts due on clearing transactions           (36,800)               (30,379)
    Accounts payable and accrued expenses         (829,464)              (764,420)
    Commissions payable                            176,127                285,638
    Unearned revenues                             (701,110)              (759,586)
                                                ----------             ----------
  Net cash provided by                                                 
   operating activities                            566,370                111,472
                                                ----------             ----------
                                                                       
CASH FLOWS FROM INVESTING                                              
 ACTIVITIES:                                                           
  Purchases of property and equipment              (30,641)               (19,209)
  Additions to other assets                        (34,443)               (10,899)
                                                ----------             ----------
  Net cash used for                                                    
   investing activities                            (65,084)               (30,108)
                                                ----------             ----------
                                                                       
CASH FLOWS FROM FINANCING                                              
 ACTIVITIES:                                                           
  Preferred stock dividends                        (31,884)               (31,884)
  Proceeds from deferred compensation plan         113,761                134,890
  Advances on notes receivable                                         
   -related parties                               (397,805)              (338,714)
  Payments on notes receivable                                         
   -related parties                                347,402                328,016
  Payments on capital lease                                            
   obligations                                     (89,586)               (45,882)
                                                ----------             ----------
  Net cash provided by (used for)                                      
   financing activities                            (58,112)                46,426
                                                ----------             ----------
NET INCREASE IN CASH AND                                               
  CASH EQUIVALENTS                                 443,174                127,790
                                                                       
CASH AND CASH EQUIVALENTS,                                             
 September 30, 1996 and 1995                     6,734,846              3,383,060
                                                ----------             ----------
CASH AND CASH EQUIVALENTS,                                             
 December 31, 1996 and 1995                     $7,178,020             $3,510,850
                                                ==========             ==========
</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements

                                       6
<PAGE>
 
                                H.D. VEST, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (Unaudited)

1)  Basis of Financial Statements

The accompanying unaudited consolidated financial statements have been prepared
in accordance with Rule 10-01 of Regulation S-X, "Interim Financial Statements",
and accordingly do not include all information and footnotes required under
generally accepted accounting principles for complete financial statements.  The
financial statements have been prepared in conformity with the accounting
principles and practices as disclosed in the Company's Annual Report on Form 10-
K for the year ended September 30, 1996. In the opinion of management, these
interim financial statements contain all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the Company's
financial position as of December 31, 1996 and September 30, 1996, the results
of operations for the three month periods ended December 31, 1996 and 1995, and
the cash flows for the three month periods ended December 31, 1996 and 1995.
Results of operations for the interim period ended December 31, 1996, are not
necessarily indicative of the results that may be expected for the year ended
September 30, 1997. For additional information, refer to the consolidated
financial statements and footnotes included in the Company's Annual Report on
Form 10-K for the year ended September 30, 1996.

Certain reclassifications have been made to prior years' statements in order for
the amounts to be comparable with the current year presentation.


2)  Related-Party Transactions

The Company has an agreement with Herb D. Vest (majority shareholder) for
management services to the Company.  The agreement, as amended in January 1997,
allows for a management fee of $900,000 per fiscal year plus an annual bonus
based on the Company's performance related to revenue, net income and other
goals, as established by the Board of Directors.

                                       7
<PAGE>
 
3)  Notes Payable

The Company has entered into a lease line of credit with a bank under which the
Company may borrow up to a maximum of $550,000. The line of credit is intended
to finance the acquisition of computers and other information system-related
assets.  The line bears interest, payable monthly, based upon the U.S. Treasury
Note Index which was 6.06% as of December 31, 1996.  The line is secured by
property acquired with proceeds from the line, as well as a $250,000 Certificate
of Deposit held by H.D. Vest Investment Securities, Inc.  Additionally, the
Company's two largest shareholders have pledged a portion of their personal
holdings of the Company's common stock as collateral for the line. As of
December 31, 1996, no amount had been drawn on the line.

                                       8
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS
-------------

Liquidity and Capital Resources

At December 31, 1996, the Company had net working capital of $3,171,885, an
increase of $350,770 over the $2,821,115 of working capital at September 30,
1996.  The increase in working capital is primarily the result of an increase in
commission and fee-based revenues.  The Company believes that the increase in
revenues is due in part, to continued strength in overall financial markets and
to the continuation of Representative development programs.

The Company's cash flows provided by operations increased to $566,370 for the
three months ended December 31, 1996, compared to $111,472 during the three
months ended December 31, 1995.  The increase in cash provided by operations for
the period is primarily the result of an increase in commission and fee based
revenues.

Cash used for investing activities for the purchase of property and equipment
included costs incurred for furniture, fixtures and computer equipment.  These
costs were $30,641 and $19,209 for the three months ended December 31, 1996 and
1995, respectively. Additionally, the Company invested $34,443 and $10,899 for
software development during the three months ended December 31, 1996 and 1995,
respectively.

Cash used for financing activities during the three months ended December 31,
1996 was $58,112 compared to cash provided by financing activities of $46,426
during the three months ended December 31, 1995. The increase in the use of cash
is the result of a $43,704 increase in payments for capital lease obligations, a
$39,705 increase of net advances on the lines of credit with Mr. Vest and Ms.
Vest, and a $21,129 reduction of proceeds from the Deferred Compensation Plan.

                                       9
<PAGE>
 
Results of Operations


Revenues-

The Company's revenues for the three months ended December 31, 1996, were
$18,727,457, a 38% increase over the three months ended December 31, 1995.
Revenues are directly related to the number of Representatives and their
experience in the financial planning and sales industry.  Additionally, the
Company believes that the increase in revenues is due in part, to continued
strength in overall financial markets and to the continuation of Representative
development programs.

Due to the declining trend of commission revenue as a percentage of gross
product sales, the Company has continued to devote resources to the further
development of its fee-based programs.  Portfolio management fees were
$2,343,272 for the three months ended December 31, 1996, a 85% increase over the
three months ended December 31, 1995.  As Representatives switch client
investment strategies from front-end sales charge investments (i.e., mutual
funds) to fee-based investments, commission revenue will be replaced by ongoing
portfolio management fees. Although this investment strategy eliminates
commission revenues at the time of the original transaction, the Company has the
potential to earn greater revenues from continued portfolio management fees.
Portfolio management fees will be earned quarterly on client funds that remain
invested in fee-based programs, compared to the one-time front-end sales charge
on mutual fund investments.


Net Income -

Net income for the three months ended December 31, 1996, was $934,529, a
decrease of $72,001 compared to net income of $1,006,530 for the three months
ended December 31, 1995.

Income tax expense increased by $566,897 to $703,699 for the three months ended
December 31, 1996, compared to $136,802 for the three months ended December 31,
1995.  This increase was the result of the full utilization of the Company's net
operating loss carryforward and other tax credits available in the prior year.

General and administrative expenses increased by $1,234,089 to $3,954,971 for
the three months ended December 31, 1996, compared to the same period for the
prior year.  This increase is due to amounts accrued under incentive
compensation plans for executive officers, senior managers, and employees,
current year management fees to Mr. Vest, and additional administrative and
operational staff to support current and projected operating levels.

Representative development costs for the three months ended December 31, 1996,
were $1,728,924, a 4% increase over development costs of $1,658,717 for the
three months ended December 31, 1995.

                                       10
<PAGE>
 
This increase in Representative development costs is the result of the
continuation of programs developed to educate the Company's Representatives as
well as the expansion of staff necessary to support participation in these
programs. The Company believes that the increase in revenues is due in part, to
training and educational programs, such as:

   Regional Support System (RSS)
   -----------------------------
   The RSS program is designed to provide Representatives with local support in
   all aspects of financial planning including sales and marketing training, and
   time and practice management. Each RSS group is led by an H.D. Vest
   Representative.  The RSS program is built around Foundation Teams(for
   Representatives seeking to achieve $25,000 in 12-month rolling gross
   revenues), Chapters (which are similar to the Foundation Teams except that
   they are held in larger workshop formats) and Summit Teams (for
   Representatives above the $25,000 12-month rolling gross revenue threshold).
   Each Chapter conducts monthly workshops from May through January, while
   Foundation team meetings are held throughout the year.

   Summit Group
   ------------
   All Representatives with 12-month rolling gross revenues greater than $25,000
   are members of a Summit team. Summit members will have the opportunity to
   attend regional conferences designed specifically for the more advanced
   technical needs of higher producing Representatives. Summit meetings give
   Representatives the opportunity to network and share ideas with each other.

   Total Client Commitment (TCC) program
   -------------------------------------
   The TCC program reflects the Company's belief that H.D. Vest Representatives
   have a continuing obligation to provide comprehensive, knowledge-based
   services to their clients in a professional and ethical manner.  To support
   the Representatives in fulfilling this obligation, the Company is providing a
   wide range of educational opportunities including newsletters, audiotapes,
   direct marketing programs, conference registration fees and success training.
   Additional programs include Client Appreciation Week, Client Service Awards,
   and the H.D. Vest Scholarship program for children of H.D. Vest investment
   clients.

Representative recruiting costs for the three months ended December 31, 1996,
were $316,503, a 182% increase compared to recruiting costs of $112,373 for the
three months ended December 31, 1995. This increase in recruiting cost is the
result of an increase in direct mail and other recruiting methods used to find
prospective Representatives.  To the extent that the Company decides in the
future to devote significant resources to rapidly expand its Representative base
through aggressive recruiting activities, future profitability would likely be
negatively impacted.

                                       11
<PAGE>
 
PART II  OTHER INFORMATION
--------------------------

ITEM 1.  LEGAL PROCEEDINGS
--------------------------

Reference is made to Item 3 of the Company's Annual Report to Shareholders on
Form 10-K for the fiscal year ended September 30, 1996.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------

No reports on Form 8-K were filed during the quarter ended December 31, 1996.

                                       12
<PAGE>
 
                                   SIGNATURES


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



                                                      H. D. VEST, INC.
                                                 ----------------------------
                                                        (Registrant)




Date: February 4, 1997                           By: s\ Herb D. Vest
                                                     ------------------------- 
                                                     Herb D. Vest
                                                     Chief Executive Officer,
                                                      Chairman of the Board


Date: February 4, 1997                           By: s\ Wesley Ted Sinclair
                                                     ------------------------- 
                                                     Wesley Ted Sinclair
                                                     Chief Financial Officer,
                                                      Vice President (Principal
                                                      Financial and Accounting
                                                      Officer)




 

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