Building an RIA on the foundation of malpractice insurance

As niche markets for financial planning go, it's hard to argue against medical doctors, a segment of the population known for having a lot of money and not a lot of time to manage their finances.

That’s the general thinking behind Curi Capital, a registered investment adviser that was created as a joint venture between an $8 billion RIA and a provider of malpractice insurance products.

The Raleigh, N.C.-based RIA, which was launched in July, has already attracted $380 million and 200 clients from among the 13,000 doctors who buy their malpractice insurance through Curi, which was formerly known as Medical Mutual of North Carolina.

While access to the market of doctors in the southeast U.S. who do business with the insurance company provided the potential client niche, the wealth management aspect comes from MAI Capital Management, the RIA representing the other half of the joint venture.

“We created Curi’s wealth management to look exactly like MAI,” said Rick Buoncore, managing partner at MAI.

“The guts of the business were solved by partnering with a team like MAI, and not having to create everything from scratch,” said Dimitri Eliopoulos, who joined Curi Capital as chief executive late last year.

“I was very attracted to this opportunity, and the need to provide good financial planning and investment advice to this niche,” said Mr. Eliopoulos, who left a 19-year career at RMB Capital, where he served as president of the wealth management business for the $9.4 billion RIA.

Now leading what is essentially a startup, Mr. Eliopoulos is among a handful of people recruited over the past several months to get the business off the ground.

Both Mark Paccione, chief investment officer and chief operating officer, and Joe Dillon, managing director of retirement plan solutions, joined Curi Capital from Captrust. Frances Cronlund, a wealth planner, joined from First Citizens Bank.

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Even though the RIA is still relatively new, the niche strategy is gaining high marks from industry consultants and marketing experts.

“This is a really authentic evolution of their business, and it doesn’t surprise me that it’s working,” said Megan Carpenter, chief executive of FiComm Partners.

“This is already a market they specialize in, are well known in, and have established clients,” Ms. Carpenter said. “I’m a big believer in target marketing because the more you can connect with a target audience, the better your outcome will be.”

April Rudin, chief executive of The Rudin Group, is also encouraged by the Curi Capital strategy of focusing on a specific niche.

“With a niche, you can become best in class, and you will be known for that, and you’re not competing for the total market,” she said. “Physicians are a good market because they’re entrepreneurs with high incomes, high expenses and not a lot of expertise in financial planning.”

Mr. Buoncore of MAI said that the ready-made target market of doctors with malpractice insurance is not being taken for granted. The company's focus is already on identifying the next niche category to serve.

“Once we do a good job of taking care of the doctors, there’s no reason once we’re in all the different markets we can’t work with lawyers or other high-net-worth people,” he said. “Our goal is to build it out over the next couple of years with 50 people in 10 locations or maybe more.”

MAI, which has an agreement not to compete directly with Curi Capital in North Carolina, Pennsylvania, Georgia, and Virginia, is also working on its own niche practice to serve professional athletes.

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