Bankers are hungrily eyeing mutual fund wrap accounts, which are booming as consumers turn to professionals for help with their investment decisions.

Assets in the accounts climbed 39% to $17 billion during the first half, according to a recent report by Cerulli Associates, Boston.

The national brokerages are enjoying most of the growth in these accounts, which allocate assets into baskets of mutual funds that are periodically adjusted to maintain portfolio balance or in response to changing markets.

But banks are coveting mutual fund wrap accounts for their promise of fee income, which averages almost 1.5% of assets annually, as well as the opportunity to lift sales of their proprietary funds.

Bank-sponsored wrap accounts have so far captured only 4% of total wrap assets - compared with 23% for Smith Barney and 11% for Merrill Lynch, according to Cerulli Associates.

Some banks are beginning to test the wrap account waters. Banc One, Columbus, Ohio, has offered a product, relying exclusively on its 23 proprietary mutual funds, to its trust customers for the past year.

The bank plans to roll out a retail version by yearend, spurred in part by strong consumer demand for asset allocation funds, said Mark A. Dillon, president of One Group Services.

It may not be too late for other banks to add wrap accounts to their menu of retail services.

"The mutual fund wrap is at a relatively early stage of its product life cycle," said David Master, vice president of Optima Group, Fairfield, Conn. And banks may be able to use the product to reach upscale customers not yet affluent enough to qualify for private banking or trust services, he said.

Mutual fund wrap accounts are a relatively new wrinkle in an old- fashioned product. In a traditional consultant wrap account, high-net-worth clients pay an all-inclusive fee to have their money invested by individual money managers. Hefty investment minimums, however, have limited the product to the already wealthy.

By lowering the required investment below $100,000, mutual fund wraps have attracted a new group of customers. These accounts require minimum investments averaging $55,300, according to Cerulli Associates.

And one bank has thrown the door open to all but the smallest investors. Great Western Financial Corp., Chatsworth, Calif., requires only $5,000 to open a mutual fund wrap account as part of an individual retirement account and only $10,000 for a regular account.

The average account begins with $30,000, said David Schulman, national sales manager for Sierra Asset Management, a Great Western subsidiary.

Great Western's wrap program, which uses the thrift's proprietary mutual funds, has become an important vehicle for new fund sales. More than a fifth of Great Western's $3.2 billion proprietary mutual fund assets are inside the wrap program, which was launched in 1990.

And Great Western isn't limiting its aspirations to the bank channel. Last year the thrift began offering its mutual fund wrap product through 400 independent broker-dealers, including A.G. Edwards and Everen Securities.

"We're not just going after the bank customer," Mr. Schulman said. "Just as important is going after a typical brokerage investor."

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