As their industries converge, commercial and investment banks are suddenly reexamining their business relationships.

In recent months, major commercial banks have announced plans to buy such investment banks as Montgomery Securities, Alex. Brown & Sons, and Wheat First Butcher Singer.

These deals are forcing commercial bankers to reconsider who they rely on for advice on sensitive matters of corporate finance and policy, including whether to sell or not.

"This is something we've thought a lot about," said Michael S. Patterson, chairman and chief executive at Triangle Bancorp, Raleigh, N.C.

His investment banker, Wheat First Butcher Singer, agreed last month to sell to commercial banking giant First Union Corp. Mr. Patterson says he has no plans to sever the five-year-old relationship. But he added that he will be watching for any signs that First Union is interfering with the investment bank's ability to provide him with objective counsel.

Investment bankers, meanwhile, may have to put extra effort into maintaining relationships with commercial bank clients.

The issue is particularly acute for Montgomery Securities, which recently agreed to be bought by NationsBank Corp. Montgomery's client list has included some of the biggest names in the business, including Wells Fargo & Co., NBD Bancorp, and BankAmerica Corp.

Wells Fargo recently ended its relationship with Montgomery, although a spokeswoman said the decision was made before the NationsBank deal was struck.

Montgomery chairman and chief executive Thomas W. Weisel acknowledges that his firm has lost "a couple" of clients since announcing its merger with NationsBank. But he insisted the losses are not too worrisome, saying, "More have been willing to continue with us than we thought."

Nevertheless, industry observers say for the next several months bankers are going to have to grapple with the fact that their longtime investment banker may now ultimately work for a competing banking company.

And this may roil the once quiet, clubby world of investment banking relationships.

"Can you imagine taking advice on the most important decisions your company makes from someone who reports to your biggest competitor?," asked Richard J. Kelly, managing director at M.A. Schapiro & Co., an investment bank that specializes in financial services companies and stands to benefit from any shakeout.

To be sure, commercial bank J.P. Morgan & Co. has long been building its investment banking operations and this year has advised such banks as Barnett Banks Inc. and Signet Banking Corp. on their decisions to sell. But bankers say Morgan is considered such a unique franchise that it is not perceived as a competitor to regional banks.

Bankers Trust New York Corp. will also be watched closely, because it acquired Alex. Brown & Sons Inc., which has advised many small and midsize banks. But Bankers Trust is not thought to be interested in the business small and midsize banks do.

Last year Bankers Trust also acquired James D. Wolfensohn & Co., an advisory boutique. Wolfensohn has been hired by Advanta Corp. to explore a sale, but so far has not been a part of any announced mergers involving financial services companies, a spokesman said.

Roy Smith, professor of finance at New York University and limited partner at Goldman, Sachs & Co., said that investment bankers will likely leave their employers and open their own firms if they find their ties to their clients in some way violated by their commercial banking owners. "It'll be a great time to be an entrepreneur," he said.

But for at least the next few years, most investment bankers are bound by retention agreements to stay with their new commercial banking employers.

Montgomery Securities will need to show its clients that a call to the bank advisory team led by J. Richard Fredericks isn't tantamount to a tipoff to NationsBank chief executive Hugh L. McColl, observers said.

In all, the San Francisco-based investment bank advised on $15.4 billion worth of bank mergers in 1996, and $1.2 billion worth in the first half of 1997, according to Sheshunoff Information Services, placing the firm among the ranks of Goldman, Sachs & Co., Merrill Lynch & Co., and Morgan Stanley.

But its practice is not likely to endure in the same form, executives at the firm acknowledge, now that the investment bank has agreed to sell to NationsBank.

Officials at First Chicago NBD declined to comment on how the merger would affect their choice of investment banker. BankAmerica and U.S. Bancorp officials also declined to comment.

Losing any of these clients could be devastating to Montgomery's M&A practice. Outside these large banks, the firm primarily advises thrifts, such as Charter One Financial Inc. and H.F. Ahmanson & Co.

Montgomery chairman Mr. Weisel said that Montgomery would try to counteract any client losses by adding more specialty finance company clients to its financial institutions group, which before the merger with NationsBank was divided between large banks, regional banks, and specialty financiers, he said.

Edward J. Brown 3d, head of global finance at NationsBank, acknowledged Montgomery could lose some bank customers, but said in an interview that he was confident his company's new investment banking unit could quickly rebuild any advisory and underwriting business lost because of the merger.

"We have a reservoir of clients that we'll send over to them," Mr. Brown said.

The change in ownership, "is really not that much of a negative," Mr. Weisel insisted, observing, "Things move in this business."

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