Now that tax-free common trust conversion has become law, the hard work of actually moving those assets into mutual funds has begun.

Bankers remain eager to infuse their proprietary mutual funds with common trust assets, estimated at $153 billion by the federal government last year. But the logistical headaches for bankers and their mutual fund servicing vendors make the years spent lobbying Washington lawmakers for relief look easy.

Banks' fund administrators are already swamped with requests to schedule the conversions, made possible by a provision in the minimum wage law passed this summer. The demand to make the switch has caused bottlenecks for bankers raring to pump up their mutual funds.

Even bankers lucky enough to have landed a conversion slot have plenty of legal, regulatory, and computer programming issues to resolve.

"It's like a land rush with everyone trying to get through the door at the same time," said Timothy J. Leach, president of Qualivest Capital Management, U.S. Bancorp's money management and mutual fund unit.

"We've at least got a reserved seat at Bisys for the beginning of December" to make the asset move, Mr. Leach said. The Bisys Group, Little Falls, N.J., administers the Qualivest funds.

Other bankers are scurrying to reserve scarce time slots when their fund administrators can process the thousands of transactions that will convert common funds into mutual fund shares.

"We are literally deluged with requests," said George Stevens, director of client services, Bisys Fund Services. Despite an experienced fund support staff that numbers in the hundreds, he explained, "there's just a limit to how much conversion activity we - or any other provider - can do."

The crunch will probably get worse before it gets better. As slower banks overcome their internal fiduciary, legal, and operational hurdles, it will put more pressure on fund vendors.

When more banks seek "specific conversion dates, it will be a logistical challenge for all of us in the servicing business," Mr. Stevens said.

Meanwhile, Federated Investors is counseling clients to take a go-slow approach.

Wachovia Corp., a Federated client, is in no hurry to begin conversions, although they eventually could boost proprietary fund assets by 50%, said R. Edward Bowling, senior vice president and manager of proprietary funds.

"We want to make sure we're comfortable with our fiduciary responsibilities... (that we) have a good business plan in place," Mr. Bowling explained.

He estimated that Wachovia would convert its common funds during the middle of next year.

But a few Federated customers are "ready to go immediately, and we're working hard to help them accomplish that," said G. Andrew Bonnewell, corporate counsel at the Pittsburgh fund company.

Meanwhile, the trust conversion ball is about to start rolling at SEI Corp., Wayne, Penn., with the first switch scheduled for later this month, said Robert Wagner, executive vice president for investment services.

"I think we'll get this done by the end of the first or second quarter," he said.

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