To gain favor with both mutual fund investors and brokers, Putnam Investments has begun selling versions of 15 of its mutual funds with reduced up-front sales fees.

Under the arrangement, investors pay a maximum front-end load of 3.5% of assets on selected Putnam equity funds, and of 3.25% on selected bond funds.

The new sales loads also are lower than a 4.5% charge Putnam tested earlier this year, and the maximum loads on other Putnam funds, which go as high as 7.57%.

While the lower loads mean brokers collect smaller sales commissions, Putnam aims to make up for this with higher ongoing fees.

These "trailing fees" have been boosted to 0.65% of assets invested in equity funds, and 0.40% of assets invested in fixed income funds. Putnam's normal trailing fees are 0.25%, also the industry norm.

By increasing trailing fees, Putnam hopes to "encourage ongoing financial service and support for shareholders," said William N. Shiebler, president of Putnam Mutual Funds.

The new pricing option is also "designed to lower front-end charges to compete with popular direct sellers," Mr. Shiebler said.

Indeed Stephen E. Gibson, Putnam's national retail marketing director, said that fund companies will have to develop attractive pricing options to remain competitive in selling through banks.

More and more of Putnam's bank clients are selling mutual funds that pay brokers ongoing fees, in addition to sales commissions, said Louis Tasiopoulos, director of the financial institutions division.

He said the high ongoing payouts and low up-front sales charges make the new funds fit better in wrap accounts.

Putnam's "midload" pricing is similar to a pricing option Boston's Fidelity Investments offers on the Advisor Funds it markets through financial intermediaries.

In an interview in July, Mr. Gibson had criticized Fidelity's pricing structure for not paying enough commission at the time of sale.

But over the past six months, banks' priorities have changed, Mr. Tasiopoulos said.

Now bankers prefer higher ongoing fees and lower front-end loads, in part to satisfy customer demand for lower initial sales charges, he said.

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