Was it clairvoyance or a matter of preparing?
Last year, The Colony Group, which oversees $11 billion in assets under management, sent clients surveys, which revealed that they wanted more than financial planning and investment management.
This led CEO Michael Nathanson in January to introduce Curated by Colony, an elective program that offers bespoke services including external partnerships with health, wellness, and lifestyle services such as custom travel, lifelong learning, and cybersecurity. It’s about “your peace of mind” says Nathanson.
The timing proved fortuitous. When the pandemic hit in March, these services resonated more as people increasingly sought wellness assistance to endure the crisis. The momentum has continued with last month’s formal launch.
The new offerings are an outgrowth of existing services, including business transition planning for private companies, dispute resolution, and business management services.
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Curated by Colony is designed for the firm’s target clients — high-net-worth individuals, business executives, entrepreneurs, athletes, and entertainers. There is no formal minimum, but clients are evaluated on an individual basis for entry to the firm.
Nathanson doesn’t hail from a traditional accounting or finance background. He was trained as a tax attorney at Harvard Law School after graduating from Brandeis University, where he majored in history and literature. That varied background may have spurred his willingness to explore beyond traditional venues.
“We understand what they want, not through the lens of what we have to offer them. It’s not about what we have to sell; it’s about what clients need and want,” says Nathanson, who is based in Boston and oversees a team of 106 financial advisors across 15 offices in the U.S.
“To make it simple, clients wanted emotional wellness, physical wellness and financial wellness” and to focus on “helping their families live better lives and happier lives.” For example, they raised issues about their legacy and developing trusts or a framework for philanthropy.
Nathanson says medical and wellness services, lifelong learning, and travel advisement couldn’t be delivered by his advisors. “We’re not medical experts or travel experts. We understand what we do and what we don’t do, and we’re not trying to be everything to everybody.”
Hence, the Colony Group acts as an intermediary connecting clients with its roster of consultants. “The clients pay for separate services; the Colony Group makes no money from them.”
Advisors have traditionally partnered with experts such as attorneys, accountants, and insurance professionals. “Why did it have to stop there,” Nathanson asks rhetorically. “Why don’t we build relationships that address physical wellness, nutrition and emotional well-being?”
With offices in eight states, the Colony Group is betting that Curated By Colony will pay off later as it generates no revenue today. Nathanson says it has a number of people dedicated to operating it, so it costs some time but not money.
Most consultants come to the Colony Group via referrals. “We have an internal team that does the selection and vetting and is led by Jennifer Geoghegan, our chief strategy officer,” Nathanson says.
The pandemic has intensified the need for these lifestyle and wellness services. “The medical concierge services are filling a greater need than ever before,” he says. “Some of these services involve remote medicine,” he notes.
But it also has decreased the need for other services. Nathanson recently participated in a meeting with travel and experiential providers, and because of the pandemic, those services are not being tapped in great numbers, as people stay close to home.
Its curated services appeal to a wide variety of its clients, often at different stages. Younger families, for example, are more likely to partake of life experiences and educational services, whereas others may gravitate toward physical wellness and legacy programs. Seniors, as they age, may focus on eldercare services.
Advisors receive dedicated training so they can provide these additional services. They aren’t expected to become attorneys, for example, but need to “know enough to work with an outside lawyer for the client.”
Nathanson says advisors are expected to spend an hour and a half with clients to get to know them better, “know their values, who their family is, the client’s hobbies, what their business is like, where they enjoy traveling and the last book they read.”
Most advisors that have majored in accounting and finance are particularly adept at analyzing numbers, but can they broaden their scope to cover wellness and nutritional concerns? Nathanson says, “We want people who have empathy, who care deeply about others, who live our mission and values. RIAs still need to be good with numbers and understand every client is an individual.”
Yet he adds, “How can we provide bespoke services if we don’t fully understand the clients? It’s not just about numbers,” he says.
Since these services have only recently been introduced, it hasn’t fully determined how they’re going to be evaluated. Nathanson expects that it will be rated “by usage, including how many clients are using it, which services are used the most and which vendors are selected.”
Nathanson expects that lifestyle services will be tweaked based on feedback and changing needs. “We could do more on some of the physical wellness services, family governance, and family consulting services.”
Unresolved is whether clients will embrace these services from their financial advisors, and whether the business model is viable given that clients aren’t charged for these services. Moreover, a lack of dedicated inhouse expertise could deter potential clients from joining.
Nathanson predicts that in two years “we will be larger and broader. We’ll be known as an asset manager, a business manager and a life-enriching specialist.”