Bank consultant William Wyman says he gives all his clients the same advice about mutual funds: Get into them.

Find a way to make them profitable, either by managing, servicing, or selling them, he says. Retaining a customer relationship is worth the effort.

Though naysayers maintain the bank mutual fund boom is a fad prompted by a raging bull market, the managing partner of Oliver, Wyman & Co. in New York scoffs at the suggestion.

Better Provide Options'

"Look, banks, this isn't a temporary trend," he says. "You had better provide options for your customer."

If banks don't heed change, Mr. Wyman says, they will lose their customers to other providers of financial services, such as mutual fund companies.

Mr. Wyman's views have considerable heft. The firm he founded in 1984 is one of the world's leading bank consulting practices, with a staff of more than 100. And Mr. Wyman, 65, is a widely respected guru of bank strategy, with 28 years' experience in the industry.

In a recent telephone interview, Mr. Wyman said that an array of social and economic forces is helping to change traditional savers into investors.

Among them:

* The fear that pension and social security benefits won't be paid as promised. To ensure that their savings can cover their needs in retirement, consumers increasingly are seeking the higher returns afforded by mutual funds, Mr. Wyman said.

Banks should get into selling mutual funds, annuities, and other investment products because even a stock market crash won't deter consumers from mutual funds, he contended.

"The operative statement is this country is moving from an environment of borrowers and depositors to issuers and investors," Mr. Wyman said.

* Consumers are frightened by the prospect of higher taxes and unstable real estate values.

These changes are pushing people into mutual funds.

|A Continued Drain'

"The implication is the individual will push much harder to get a higher return," Mr. Wyman said. "It means there will be a continued drain from deposits into higher-yielding instruments."

Mutual funds are gaining popularity over federally insured bank deposits, and not just because of the low yields on certificates of deposit, he maintained.

"The facts are, it's not that much safer to invest in a CD," Mr. Wyman said."

Regulation a Factor

He challenges the notion that banks and mutual funds are at cross-purposes, that the bank is chiefly a depository institution and not a provider of investments. He said that contention is put out by mutual fund officials who don't want government regulation.

It's easier for a mutual fund to offer bank services than it is for regulation-strapped banks to offer mutual funds, he said.

As a result, some banks will compete aggressively in mutual funds, but others will ignore them and concentrate on payment processing, mortgage lending, and credit cards - fields in which they excel.

Are banks getting into the mutual fund business too late to really benefit?

It's Never too Late'

"In some senses, it's pretty late," Mr. Wyman said. "In the customer's mind, it's institutions like Fidelity Investments that are established as a mutual fund. But it's never too late if you're smart or aggressive enough."

All this doesn't mean that it's a simple matter of offering mutual funds. Mr. Wyman recognizes that selling mutual funds for a one-time commission doesn't provide the kind of income a bank can realize from taking low-interest deposits and making higher-interest loans.

"Mutual funds are clearly less profitable," he said. "But the CDs banks are losing tend to be the shorter maturity CDs that are not profitable in the first place. Even if mutual funds reduce profitability, to some extent they are retaining customer relationships."

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