Now that separate accounts are starting to outstrip mutual funds' asset-growth rate, more banks are trying to offer privately managed portfolios to their midtier clients through Internet services.

Separate accounts have become increasingly popular with investors, who appreciate perks such as tax advantages, lower expense ratios, and the ability to customize holdings. But since they require much higher account minimums than mutual funds, they have remained beyond the range of most retail investors.

They are also beyond the range of most banks to offer to any but their largest customers, since the companies that manage those accounts often require minimum investments of $1 million.

Companies including Separate Account Solutions Inc. in Carmel, Calif., FundQuest Inc. in Boston, and Inc. in Sunnyvale, Calif., aim to level the playing field.

Separate Account Solutions, like others, uses a Web platform to link investment advisers at financial services firms with money managers who handle separate accounts, said its founders, chairman Kevin D. Freeman and president Erik Davidson.

The company's technology also enables it to lower the price threshold for accounts with as little as $100,000. It charges a maximum of 1% of assets under management, which includes the asset manager's fee. Wrap programs typically charge about 2.3%, so financial intermediaries using Separate Account Solutions can tack on a charge and still be competitive, Mr. Freeman said.

Separate Account Solutions currently works with Royal Bank of Canada, which helped finance its technology. Mr. Davidson said it is in discussions with several banks and brokerages and that it hopes to have as many as 50 wholesaling relationships, representing $10 billion, within the next five years.

Unlike many similar companies, Separate Account Solutions is not linked to any one provider for clearing and custody services, so banks could opt to keep separate account funds in-house, Mr. Davidson said.

Geoffrey H. Bobroff, a mutual fund consultant in East Greenwich, R.I., said most banks would probably choose to put the funds in custody elsewhere. Record-keeping is very expensive, especially for relatively small accounts, and the bank would probably gain only five basis points on the assets, Mr. Bobroff said.

Paul A. Fullerton, an analyst at Cerulli Associates Inc. in Boston, said that a company's Web interface and client contact tools are more important selling points.

For instance, Separate Account Solutions has a feature that lets individual investors and their financial advisers review a Web page together while chatting live over the Internet.

Money Management Institute, a Washington organization for the separate accounts industry, says the top five firms offering the accounts - all wire houses - hold about 70% of the $417 billion-asset separate accounts market.

Most banks have been slow to catch on, said the institute's executive director, Christopher L. Davis. Outsourcing is one way they can catch on faster, he said.

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