Striving to capture more of their customers' financial business, several banking companies are freeing up their investment management units to pitch competitors' products.

Directing customers away from in-house products might not seem the best route for banks that have spent years building fund operations. Some banks are using competing funds strictly to close up gaps in their own lineups, but others are going further; in both cases they are trying to maintain credibility with an increasingly savvy client base, the bankers involved say.

PNC Advisors, PNC Financial Services Group's unit for high-net-worth investors, is one example. Donald G. Berdine, senior vice president and chief investment officer for PNC Advisors, said the banking company is prepared to allow its $165 billion BlackRock Fund unit take a back seat when necessary.

"If a BlackRock fund is not giving the investment performance that a client is looking for, we'll use other funds," Mr. Berdine said. "We need to establish credibility as an advisor. We can't advise our clients to buy all BlackRock funds. That would ruin our credibility."

So far, PNC Advisor's customers have overwhelmingly chosen the bank's own funds. All but $500,000 of the $14 billion of assets managed by PNC Advisors is in BlackRock Funds.

There are plans to add more third-party funds to those from Merrill Lynch & Co., Guggenheim Funds, and Fidelity Investments, Mr. Berdine said, adding that if a client asks about a specific fund, he wants to be prepared to offer it.

"All else being equal, we would love to keep our clients in BlackRock Funds, because we know the fund managers over there," he said. "There is really no reason to recommend funds outside the BlackRock family except when we don't have comparable products for a customers' needs."

William Thonn, an executive vice president at Harris Bankcorp, said the Chicago banking company offers a lot more mutual fund products than it did a year ago, with names like Fidelity and even BlackRock being sold alongside the Harris Insight Funds.

"We have a fiduciary responsibility to offer funds that are viable for our clients and at any given time that can change," Mr. Thonn said. "To do things right we need a variety. We try to make our asset allocation decision based on our clients' needs, not on who manages which fund."

Analysts said a new class of well-educated investors is forcing banks to find new ways to gain market share.

"There is a maturing group of baby boomers out there who are savvy and knowledgeable," said David Ross Palmer, a senior analyst with Lobue & Associates. "Increasingly, you are hearing people say, 'How can I trust you if the only thing I hear about is your products?' "

Mr. Palmer, an asset manager for Merrill Lynch until 1982, said portfolio managers have resisted bringing in competitors' products in the past. Slowly, though, They "are starting to realize that this is the way to increase distribution," he said. "If you do your job and you do it well, you are going to get the first shot at in-house investors and have the opportunity to attract outside clients. Good managers really can't lose here."

William Ennis, president and CEO of Evergreen Funds of Boston, a unit of Charlotte, N.C.-based First Union Corp., said he is battling for market share with Merrill Lynch, Fidelity, and Putnam Investments.

"I don't consider us the in-house fund," he said. "We are not sold first. We have to compete at the point of sale for every order."

This competition does have its advantages. Mr. Ennis said 14,000 advisors are selling Evergreen funds nationally, including brokers at Merrill. First Union also sells Merrill's funds.

BlackRock has also been trying to boost its external distribution.

"We offer our product through broker-dealers and, yes, through some banks," said Thomas Whitford, BlackRock' s executive vice president.

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