KeyCorp plans to tweak its mutual fund wrap account linked to Charles Schwab & Co.'s popular OneSource mutual fund mart.

The banking company plans to introduce in the first quarter a "hybrid" or "open wrap" account, which would be incorporated into its KeyMap account, said William A. Dent, a director at Key Asset Management.

Wrap accounts let banks offer financial advice that is "wrapped" around an assortment of mutual funds. At present KeyMap investors get a "packaged wrap," with OneSource funds chosen by a five-member investment committee, Mr. Dent said. The new plan would let KeyCorp's 250 brokers choose from the OneSource product group to fit into existing model portfolios.

"The model portfolios are defined by asset class diversification," Mr. Dent said. Under the new plan it would be "up to the individual broker or investment adviser to select funds to actually go into those models."

Some analysts sounded a note of caution. Burton Greenwald, a mut-ual fund consultant in Philadelphia, said the new wrap account is obviously aimed at investors who need less "hand-holding" than others. He speculated that the packaged wrap account may prove to be more popular. Some investors want guidance, he noted.

Geoffrey H. Bobroff, an analyst based in East Greenwich, R.I., observed that though the open wrap account meets the desire for flexibility, it could also present a risk of "poor investment decisions" being made by brokers.

However, Mr. Dent countered that brokers are not going to be given "carte blanche" to select just any funds. Instead the investment committee and mutual fund analysts will identify four or five funds within seven or eight asset classes.

"Each of those four or five funds would be screened for style consistency, competitive expense ratios, investment management tenure, and the other types of variables that we look at to approve a fund," he said.

Mr. Dent said what he described as "paint-by-numbers asset allocation" mitigates any risk that might be involved.

To coincide with the launch, KeyCorp will extend to the new product the "cobranding" marketing campaign for its Key Gateway supermarket program with Schwab, he said. Though the primary brand will continue to be KeyMap, Charles Schwab will feature prominently in future advertising, he said.

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