PNC Bank Corp. is testing a wrap-fee account that would make sophisticated money management services available to customers with as little as $5,000 to invest.

The Pittsburgh company plans to use its proprietary mutual funds to build 20 different investment portfolios for retail customers at its more than 500 branches.

The product could be ready for sale by this fall, according to George Bernard, vice president in charge of mutual fund management at PNC Securities Corp.

More Banks Joining Fold

"We feel that most customers should have this kind of program," Mr. Bernard said.

Banks increasingly are launching their own versions of wrap-fee accounts, so-called because money management, investment advice, and trading fees are all wrapped together in one fee.

In PNC's case, these services will cost customers an annual fee of 1.5% of the assets under management.

Like many mutual fund wrap programs offered by fund companies and brokers, PNC will periodically change the mix of mutual funds within each portfolio to respond to changing market conditions and to maximize customer returns.

Right now, PNC is testing the program by using hypothetical customers as models.

Other bank companies that are working on mutual fund wrap programs include BankAmerica Corp. and Chemical Banking Corp. Like PNC, these banks have proprietary mutual funds they could use to create their wrap portfolios.

"It's the next natural step for banks as they become more comfortable with investment products," said James Zuccone, a Denver-based consultant who specializes in bank wrap programs.

Proprietaries Not Required

Banks that manage proprietary funds have an edge in launching wrap-fee programs, but other banks can get into the act, too.

Fidelity Investments, for instance, is marketing a program in which it supplies banks with a variety of funds and software, which are then used to fashion investment portfolios for customers.

Mutual fund wraps are offshoots of traditional wrap products that rely on professional money management firms to build portfolios from individual stocks. These programs typically cater to customers of higher net worth than the mutual fund programs do.

Chase Manhattan Corp. is believed to be the only bank in the country going this traditional route. It shares a 3% annual management fee with outside money management firms that assemble baskets of individual securities for Chase customers.

Some banks argue they have trust departments to serve this clientele and don't want to open the door to turf battles that could develop if outsiders become involved.

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