TUCSON, Ariz. - Creative ways to pay brokers can keep wrap programs from bombing out, an expert said.

"For every successful wrap program, two or three are roadkill," said James McCoy, a vice president with Bisys Fund Services, a division of Bisys Group of Little Falls, N.J.

And most wrap programs fail because brokers think they will not be paid enough to sell them, said Mr. McCoy, who directs the development of wrap products, programs, and services at Bisys.

Wrap programs, which charge a fee based on assets under management rather than a commission on transactions, typically pay brokers 65% less during the first year, he said.

Though recurring fees make up the difference after a few years, brokers often wonder whether they will really get the promised payout because "banks tend to tinker with compensation," Mr. McCoy said.

Another disincentive to pushing wrap products is that they rarely count toward production quotas, said Mr. McCoy, who was a panelist Monday at the Bank Securities Association's annual convention in Tucson.

The solution lies in creative compensation, he said.

A good example, Mr. McCoy said, is a system used by First Chicago Securities. The system involves paying brokers an up-front fee equal to 4% of assets in addition to a significant recurring "trail fee" later on. First Chicago is now part of Bank One Corp.

Other brokerages have "securitized" wrap fees, creating a structure similar to that of a B share mutual fund, Mr. McCoy said. For instance, a broker might get a 3% payment up front, forgo payment for three years, then revert to a recurring revenue stream.

William Dent, director of asset advisory services at McDonald Investments Inc., the brokerage subsidiary of Cleveland-based KeyCorp, said that though brokers are lukewarm to wrap accounts, customers like them, and more banks are offering them.

"It's a great way for banks to annuitize revenue streams," he said.

mutual fund wrap programs may not be the best choice for an individual customer, said Mr. Dent, who was also on the convention panel.

Fund wrap programs may be too limiting for many customers, he said. Fee-based brokerage accounts offering an unlimited number of on-line trades for a flat fee work well for brokerages trying to attract relatively high-net-worth clients who need little advice, he said.

The most popular programs for banks are so-called "separate" accounts, which draw on the expertise of several asset managers, and accounts in which an experienced broker acts as a portfolio manager, Mr. Dent said.

Alan Leach, president of the brokerage arm of BancorpSouth based in Jackson, Miss., said he plans to introduce a broker-directed wrap program this year.

"It's affordable for the customer and good for the brokerage firm," he said. "We'll make significantly less money at the time of the investment, but over time I predict there'll be a flow of revenue."

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