The wrap account, a popular money-management product at brokerage houses, is starting to find its way into banks' investment arsenals.

Chase Manhattan Corp. is steadily building its wrap business, targeting upscale executives and professionals. And Chemical Banking Corp. is preparing to come on line with a wrap product. Other banks, meanwhile, are believed to be eyeing the market closely.

Wrap accounts take their name from the fact that charges for investment advice, money management, and trades are all "wrapped" together in a flat fee. The package appeals to investors who prefer predictable costs to fees that vary with trading volume.

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In the Chase program, believed to be the the first at a commercial bank, the consumer pays 3% annually on assets under management.

Chase itself does not manage the investments. Instead, it recommends any of 16 money management firms and shares the fees. Chase would not specify its portion of the fees, but it clearly likes the product.

"There are profits to be made, and we're bringing another dimension to the Chase organization," said Barry Westerland, chief administrative officer of Chase Manhattan Investment Services, the unit offering wraps.

Wrap providers like Chase say these products make professional money management available to more investors. That's because in return for the volume wrap providers can generate, money management firms often agree to reduce investment minimums.

Minimum Investment $100,000

Still, the price of entry isn't cheap. Chase, for example, requires a minimum investment of $100,000 per customer.

Chase has been slowly building its wrap program for the last three years.

The bank had over 400 account holders and $125 million under management at the end of April. according to Cerulli Associates, a Boston-based consulting firm.

This makes Chase a flea on the back of such elephants as Shearson Lehman Brothers, which has over $20 billion in wrap account assets.

Stepping It Up

But Chase is stepping up its activity through its investment services division, which offers wrap products and other financial services to upper income professionals and entrepreneurs.

The division operates 14 retail offices, including a recently-opened office in the heart of Manhattan. Two suburban centers -- on Long Island and in White Plains -- are to open later this year.

Chase recognizes that the centers serve a strategic role. In part, they act as a safety net for middle-to-upper-income customers that might be missed by Chase's other investment programs.

Others Likely to Follow

For lower-end retail customers, Chase offers mutual funds and annuities through an inbranch program with third party marketer GNA Corp.

Chase also has private banking and trust services for very high-end customers.

Exactly how many other banks will jump into the wraps market is unclear. But Chemical confirms that it is preparing a product.

According to Cerulli Associates, Banc One Corp. also is planning one. Officials at the Columbus, Ohio-based company declined to comment.

Experts say it's just a matter of time before other financial institutions follow suit.

The growing interest in the wrap business may also spur regulators to move on measures that would more closely monitor all wrap programs, said Eli Neusner of Cerulli Associates.

"There are a number of gray areas in terms of performance measurements and accountability when it comes to these products," xMr. Neusner said.

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