Banks are poised to benefit from an expected surge in online brokerage use in the next four years, but so far most of them are blowing the opportunity, said the author of a recent online brokerage study.

The study by Framingham, Mass.-based IDC, a consultant division of International Data Group, said that more than $1 trillion of assets will move online in the United States by 2004, adding to the current $1.6 trillion.

About 60% of the new assets will come from existing, off-line brokerage accounts, and much of the remainder will come from new or inherited wealth, the study said.

At the same time, Internet brokers' customer base will become more diverse. To date, households with more than $100,000 of income have contributed most online assets. But households with incomes of less than $50,000 are catching up, the study found.

That should be good news for banks, which have pulled much of their online brokerage business from the mid-tier market, said Shaw Lively, a research manager in IDC's online financial services research group.

So far, however, Mr. Lively said, most banks have fallen short both in branding and in linking online bank and brokerage accounts. The influx of new online accounts will give banks "one more window before they get completely shut out," he said.

"Banks have the products already, but they need to make them work together better than they have and need to package them better than they have," he said. "Our research indicates that a lot of people do both online brokerage and online banking," but for the most part only Internet banks have successfully melded the two.

Banks that do not offer a fully integrated online banking and brokerage package, with a single sign-in and easy funds transfer, are failing to capitalize on their greatest advantage in the Internet brokerage race, Mr. Lively said. Many investors will prefer the convenience of linked accounts to features such as research or discount trading, he said.

One of the biggest names in online banking, Wells Fargo & Co., lets customers automatically sweep funds back and forth between their banking and brokerage accounts. But it is still working on single sign-on and integrated balances, said Shelley Freeman, an executive vice president of Internet investment services at the San Francisco banking company.

"We have been building capabilities based on customer feedback," she said. "Integration is more important to our customers now than it was in the past."

Price is a big part of the problem, said Mr. Lively, who worked in the brokerage unit of Pittsburgh-based PNC Financial Services Group. before moving to FleetBoston Financial Corp., where he oversaw the coordination of Fleet's banking site with that of its Quick & Reilly brokerage unit.

It can cost as much as $20 million to build a new Internet platform, Mr. Lively said. At the same time, many banks underestimate the time and effort that go into linking functions such as back-office operations and customer service.

Branding is also a problem for banks, Mr. Lively said. People tend to associate San Francisco's Charles Schwab & Co., for instance, with online trading, but they do not typically associate any bank's name with the Internet, he said.

"Banks have a great brand, but they have to create a second online brand," he said.

Wells Fargo, however, seems to be moving in the opposite direction. In six weeks, it plans to dump its Internet-brokerage-specific WellsTrade brand in favor of a more bank-like brand that connotes the full range of services Wells offers online, Ms. Freeman said.

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