Courtesy of Hilliard Lyons

Louisville-based investment firm Hilliard Lyons will introduce a new “state-of-the-art technology” and outsource certain operations to enhance its wealth advising services and grow the business overall, according to Hilliard Lyons’ CEO James Allen.

“This just fits directionally where we want to go,” he said.

Hilliard Lyons signed a letter of intent last week with St. Louis-based First Clearing, which will install and regularly update Hilliard Lyons’ technology, as well as take over some of the firm’s back office operations, most notably its trade clearing and processing.

The operations outsourcing will result in the loss of some jobs, though no number was provided.

“It is not going to be a huge number,” Allen said, adding that some employees will be offered positions elsewhere in the company.

Both companies will complete 30 days of due diligence before signing a final agreement.

“We are looking forward to working in partnership with Hilliard Lyons to continue its long tradition of serving and advising clients with distinction and with the best tools available,” John G. Peluso Jr., president of First Clearing, said in an statement emailed to Insider Louisville.

The new technology will roll out during the nine to 12 months after the deal is inked.

“It really pushes us to the forefront,” Allen said. “The whole objective was to enhance our technology in a world where technology is evolving so rapidly.”

Allen declined to disclose many details about the agreement but said the partnership with First Clearing’s services is expected to result in overall cost savings. The agreement does not include an exchange in equity or ownership.

“It is economically a positive for the firm,” Allen said. “I won’t get into any numbers.”

CEO Jim Allen | Courtesy of Hilliard Lyons
CEO Jim Allen | Courtesy of Hilliard Lyons

The new technology will improve operations on the financial consultant and consumer sides.

The new system will allow Hilliard Lyons’ advisors to customize their dashboards, more easily generate investment reports, digitize paper documents, take notes using voice recognition software and provide improved data integration, Allen said.

It also gives clients access to tax reporting information and more comprehensive information about their investments, as well as allows them to view their accounts on any device.

“The client experience will be considerably better,” Allen said. And consultants can “deliver (more) value-added advice.”

Other investment firms including Chicago-based companies William Blair & Co. and Mesirow Financial are taking similar steps, Allen said, and others have reached out to Hilliard Lyons to ask about their new partnership with First Clearing.

“We think others will be heading in this direction as well,” he said. “It is a great trade-off for us.”

At 162 years old, Hilliard Lyons is one of the oldest investment firms in the country. Today, it is jointly owned by Hilliard Lyons employees and Bowling Green, Ky.-based grocery company Houchens Industries. Houchens also is employee-owned.

The company has more than 70 offices in 12 states and employs about 1,100 people.

First Clearing has existed in some form since 1983 and was acquired three times. In 2009, it became an affiliate of banking and financial services firm Wells Fargo & Co.

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Caitlin Bowling
Louisville native Caitlin Bowling has covered the local restaurant and retail scene since 2014. After graduating from the Ohio University’s E.W. Scripps School of Journalism, Caitlin got her start at a newspaper in the mountains of North Carolina where she won multiple state awards for her reporting. Since returning to Louisville, she’s written for Business First and Insider Louisville, winning awards for health and business reporting and becoming a go-to source for business news. In addition to restaurants and retail business, Caitlin covers real estate, economic development and tourism. Email Caitlin at [email protected]