Merrill Lynch & Co.'s decision to get into on-line trading could affect how asset management companies price investment products, said Stephen E. Canter, the president of Dreyfus Corp.

The entry could also affect how companies approach distribution of their funds, said Mr. Canter, who is also Dreyfus' chief operating officer. He spoke at the New York headquarters of the Mellon Bank Corp. unit during its midyear equity briefing.

Merrill Lynch, which has nine million customers, announced last week that it would move from being a full-service-only broker and go head to head with the discount giant Charles Schwab Corp., charging $29.95 per trade on the Internet.

"It's a watershed event," Mr. Canter said. "I'm in the process of carefully evaluating the change."

Burton J. Greenwald, a Philadelphia-based mutual fund consultant, said Merrill's announcement could sound a "death knell" for commissions on mutual funds.

Ultimately most mutual fund transactions will be done through mutual fund supermarkets-such as the no-load, no-transaction-fee OneSource program of San Francisco-based Schwab-or through mutual fund wrap accounts, Mr. Greenwald said.

Geoffrey H. Bobroff, a mutual fund consultant based in East Greenwich, R.I., said some people were reacting like "Chicken Little" to Merrill's announcment.

Traditional commission-based sales volume is "still quite high," Mr. Bobroff said. And investors holding the most assets, those 55 years and over, still want advice, he added.

Mr. Canter said Dreyfus is in an "excellent" position to take advantage of any changes Merrill's decision brings to the market.

Dreyfus, which has $125 billion of assets under management, distributes through a number of channels. Mr. Canter credits that diversity for a jump in its net equity sales this year; in the first five months they were up 33% from a year earlier.

Dreyfus' funds are sold through banks, brokerages, financial planners, and no-transaction-fee programs, such as OneSource, which sells 56 of its portfolios.

Mr. Canter said Mellon is looking at how its own on-line brokerage operation fits into its overall business.

"It gives us an interesting window into a certain type of investing," Mr. Canter said. "But exactly how we use the knowledge and where it fits in in the longer term" is being weighed.

The unit, with 62,000 active accounts is still "evolving," he said.

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