Don't tell John Shetterly that J.J.B. Hilliard, W.L. Lyons Inc. chose a bad time to roll out its unified managed account platform.

Shetterly, the Louisville company's director of investments said the platform generated $20 million of assets under management in its first year — more than twice what he expected it would when it was launched in October 2008.

"I think there is no better time than during a bad market cycle" to introduce new products, Shetterly said in an interview. "From an asset standpoint, we are ahead of where we thought we would be, regardless of market conditions. I think from a product management and product development perspective, it is easier in a tough market to explain why this product works when everything is milling down around us."

When market conditions are stronger, it's OK for companies to rush a new product to market, Shetterly said. But when economic condition are more difficult, "you have time to dot the i's and cross the t's. … Advisers have time to explain a product and companies have time to develop it."

Hilliard Lyons, which had $28 billion of assets under management at midyear, was sold by PNC Financial Services Group Inc. last year to Hilliard Lyons' employees and Houchens Industries of Bowling Green, Ky., a diversified investing company.

Hilliard Lyons has been transitioning clients to a broader array of investment products, Shetterly said. Traditionally, its clients were predominantly invested in mutual funds.

In the past year high-net-worth clients have become more open to pitches from financial advisers about unified managed accounts because they offer a diversified asset allocation strategy, Shetterly said.

He said he hopes to reach $50 million in assets under management within the next year.

"I'd like to get to the point where we are getting $5 million to $10 million a month on to the platform," he said. "When we do that, this thing will really begin to snowball."

Analysts said Hilliard Lyons will face an uphill battle in its bid to diversify.

Shetterly put the challenge it faces this way: The company has "primarily been a mutual fund firm that offers mutual fund wrap products to its customers, and we have done extremely well with that strategy, but now we want to grow from there" — including offering unified managed accounts.

Burton Greenwald of BJ Greenwald Associates in Philadelphia said most wealth management companies worry about adding new investment and insurance products because they could syphon assets away from their "bread-and-butter offerings."

There is always some "fear of change," Shetterly said, but "Hilliard Lyons wants to become more flexible for our customers by offerings unified managed accounts."

"Ultimately, we think if we do the right job for our clients, everything else will fall in place," he said. "Over time, unified managed accounts are going to be the better choice for clients. I think if we put the clients first, everything will work out."

Hilliard Lyons has partnered with Placemark Investments Inc. of Wellesley, Mass., to provide the back-office services for its unified managed accounts platform. Shetterly said that Hilliard Lyons selected Placemark from a crowded field of technology providers because the company allowed Hilliard Lyons to continue to self-clear its assets.

Analysts said Hilliard Lyons may be a little late to the game with its unified managed account platform, but Shetterly said its tardiness may ultimately work in its favor.

"This is a still a relatively new product for customers, and interest is just starting to grow," he said.

The unified managed accounts are sold through Hilliard Lyons' 450 financial consultants, which are scattered from Michigan to Tennessee and St. Louis to North Carolina. Shetterly said the company has no plans to offers its products through third-party channels.

"Our more progressive advisers are already catching on to the idea of UMAs," he said. "If you find one adviser who people respect, who understands this, it will really start to catch on fast from there. People pay attention to success."

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Corrected September 23, 2009 at 3:38PM: An earlier version of this story misspelled the last name of John Shetterly of J.J.B Hilliard, W.L. Lyons Inc.