The Colony Group Review

The Colony Group is a Boston-based registered investment advisor (RIA) offering customized portfolio management, financial planning and a variety of specialized services, such as tax preparation and dispute resolution. The firm serves mostly high net worth individuals, with specialties in serving business owners, executives, entertainers, athletes and professionals like attorneys and physicians, among others. A minimum starting account value of $500,000 is typically required.

Assets under management (AUM): $13,054,044,702

Minimum investment: Generally $500,000

Individual investor to advisor ratio: 30:1

Fee structure: A percentage of AUM, hourly charges, fixed fees

Headquarters: One Boston Place 201 Washington Street, 11th Floor Boston, MA 02108 Website: www.thecolonygroup.com Phone: 617-723-8200

All information included in this profile is accurate as of September 10, 2021. For more information, please consult The Colony Group’s website.

Overview of The Colony Group

The Colony Group was founded in Boston by Kirby Hamilton in 1986. Over the next 25 years, Hamilton grew the firm to four offices and $1.3 billion in assets under management before retiring and selling it to Focus Financial Partners in 2011. The Colony Group is now a wholly owned subsidiary of Focus Operating LLC, which is in turn wholly owned by Focus Financial Partners, a Nasdaq-traded company that owns 60 firms in more than 30 states (and several countries).

Michael Nathanson has served as the CEO of The Colony Group since the change in ownership, and has held leadership roles at the firm since 2004. Since its acquisition by Focus Financial Partners, The Colony Group has merged assets with multiple other firms.

Today, the firm has approximately 250 employees, around 125 of whom work as financial advisors.

What types of clients does The Colony Group serve?

The Colony Group serves mostly high net worth individuals. For reference, the U.S. Securities and Exchange Commission (SEC) defines high net worth individuals as those with at least $750,000 under management or a net worth of at least $1.5 million. However, the firm’s client base also includes individuals who are not high net worth, as well as a small number of institutional investors.

In particular, the firm notes that it specializes in working with athletes, entertainers, corporate executives, business owners, professionals like attorneys and physicians and multi-generational family offices.

The Colony Group has a preferred minimum balance of $500,000 for equity and fixed income accounts. For alternative investment, private offering or third-party separate accounts, the minimum investment requirement will vary by manager.

Services offered by The Colony Group

The Colony Group is a full-service firm, offering financial planning services, portfolio management, tax preparation, family office services and dispute resolution services.

The Colony Group generally refers to its financial planning services — including retirement planning, trust and estate planning, charitable planning and other services — as financial counseling. However, the firm may also create a one-time financial plan as part of its investment advisory services.

While the firm offers consulting on investments held outside of The Colony Group, it typically provides its investment management services on a discretionary basis, meaning it does not consult the client for every trade. That said, the firm does provide some non-discretionary management, but the vast majority of its assets under management are held on a discretionary basis.

Here is a comprehensive list of services offered by The Colony Group:

• Portfolio management
• Financial counseling
  • Investment planning
  • Retirement planning
  • Estate planning
  • Philanthropic planning
  • Education planning
  • Tax planning and management
  • Cash flow forecasting
  • Risk management
  • Tax preparation
• Family office services
• Dispute resolution services
• Business management services
• Concierge services for non-advisory client needs, such as wellness, cybersecurity, career development and lifetime learning
• Lending and cash management services
• Workshops and seminars

How The Colony Group invests your money

The Colony Group has an investment committee that uses several methods to analyze potential investments on behalf of its clients. Working with third-party consultants and research firms as well as its own proprietary data, the firm uses capital market assumptions and asset allocation software to determine its portfolio advice.

The firm creates a customized portfolio for its clients, based on their individual goals, risk tolerance, time horizon and tax position. Among the types of investments that The Colony Group evaluates for use in client portfolios are:

• Mutual funds
• Exchange-traded funds (ETFs)
• Exchange-traded notes
• Separate account managers
• Limited partnerships
• Structured notes

The firm evaluates managers based on both their performance and their process.

Fees The Colony Group charges for its services

For advisory and investment management services through The Colony Group, clients typically pay a percentage of assets under management. Rates generally start at 1% and decrease as the client’s account balance grows. The annual fee does not include third-party transaction costs, brokerage fees or other investment-related costs that clients may also incur.

The Colony Group typically charges separate fees for the variety of other services it offers. These fees are negotiated with the client, often depending on the scope and complexity of the services provided, and may be applied toward investment management fees. The firm provides the following parameters for the fees it typically charges for these services:

• Financial counseling: An annual fee that depends upon the complexity and scope of the work.
• Investment consulting: Either an asset-based or fixed fee, with the former generally ranging from 0.10% to 0.25% of assets under management per year.
• Family office services: Either a flat annual fee or an hourly fee that ranges from $95 to $275 per hour.
• Business management services: Fees are based on the time it takes to perform the service, ranging from $95 to $275 per hour.
• Tax compliance services: Depends on the complexity and scope of the work; cost may be included in a client’s financial counseling or family office fee.
• Dispute resolution: Generally $275 per hour; time spent preparing for testimony and other settlement negotiations is billed at $345 per hour.

The Colony Group disciplinary disclosures

While The Colony Group itself has never had any disciplinary disclosures, it does have to disclose an event involving AFA, a firm that it acquired in February 2019. In 2012, prior to that acquisition, a principal at AFA paid the Massachusetts Securities Division $40,250 to settle charges that they had failed to register as an investment advisor.

For reference, all registered investment advisory firms are required to disclose any civil, regulatory or criminal events related to the firm, its employees or its affiliates in their Form ADV, documents they file with the SEC. You can get more information on The Colony Group and its disciplinary history by visiting the firm’s IAPD page.

The Colony Group onboarding process

1. Contact the firm: To get started working with the firm, you can fill out this online form, which asks for information including how much you have to invest and how you heard about the firm. Or, you can call your local office.
2. Discuss your needs: You’ll connect with a financial advisor to discuss your financial goals and risk tolerance. They’ll then create a portfolio that’s tailored to your needs.
3. Receive regular updates: Your advisor will manage the account on your behalf, but you can expect to receive periodic updates, including a quarterly performance report. You can also reach out to your advisor with questions at any time.

Where The Colony Group is located

The Colony Group has 16 offices, the majority of which are located along the East Coast. Specifically, it has offices in the following cities:

• Boston
• Hingham, Massachusetts
• Wellesley, Massachusetts
• Westford, Massachusetts
• Greenwich, Connecticut
• Boca Raton, Florida
• Naples, Florida
• Bethesda, Maryland
• Easton, Maryland
• Concord, New Hampshire
• New York (2)
• Babylon, New York
• Los Angeles
• Denver
• Richmond, Virginia

Is The Colony Group right for you?

The Colony Group may be a good choice for you if you have at least $500,000 to invest and want additional financial services, such as tax preparation or estate planning. Professional athletes, multi-generational wealthy families and corporate executives may also benefit from the experience that The Colony Group has with working with investors like them. Those with lower account balances, or who don’t live near one of the firm’s offices, however, might find that another firm is a better fit for their needs.

As always, when choosing financial services, it’s important to understand the experience of the provider and how they’re being paid. Before you make your decision, be sure to research multiple firms to ensure you find the right advisor for you.