Mark Twain Bancshares has trotted out a wrap account that executives believe will help its brokers compete with their nonbank rivals.

In December, the bank's broker-dealer began offering a wrap account that relies on outside money mangers to individually manage a customer's portfolio. The account carries a $250,000 investment minimum and customer fees ranges from 1.23% to 3.0%, depending on assets.

"It puts us in the arena of the major brokerage companies in terms of product offerings," said Nancy E. Graves, senior vice president for retail banking at Mark Twain. "They all offer outside money managers."

Ms. Graves said the move is part of a growing emphasis on increasing revenue from recurring fees instead of relying solely on sales commissions.

Mark Twain, a $2.8 billion-asset banking company based in St. Louis, collects an annual servicing fee for the wrap account, which is managed by Portfolio Management Consultants, Denver.

Mark Twain's cut ranges from 0.50% to 1.26%, depending on the size and type of assets in the portfolio.

"The servicing fee builds in an annuity for the broker," and the bank, Ms. Graves said.

But shifting to fee-based business is neither easy nor instantaneous, she conceded.

"It's a big transition for our sales force," Ms. Graves said. "We can't underestimate that."

Selling a fee-based asset management product, such as a wrap account, demands more time and effort than selling mutual funds or individual securities.

"It can take you two or three months, versus getting on the phone and selling a few bonds," Ms. Graves said.

So far the product is too new to have yielded significant results, Ms. Graves said.

Mark Twain Bank executives believe there's a market for the a traditional wrap product among affluent customers, who account for about 30% of the bank's customer base.

Many people prefer not to have their assets in mutual funds or pooled investment vehicles, Ms. Graves said.

The bank expects the product to appeal particularly to younger affluent executives, aged 40 to 60, and to two-executive households, regardless of the investors' ages.

Affluent people, she said, often don't have the time to manage their assets themselves.

Mark Twain outsources the selection of investment managers to Portfolio Management Consultants, a Denver-based company that specializes in identifying money managers and running wrap programs for such banks as Chase Manhattan.

The strategy wins kudos from at least one industry observer.

"For an upscale bank, this may very well may appeal to a segment of their clientele," said bank brokerage consultant John Philip Sousa 4th, president Investment Program Management, Henderson, Nev. "Everybody's trying to differentiate themselves, and this bank sounds like they're doing a pretty good job of it."

One long-term advantage to selling a portfolio management service, such as a wrap, may be that poor investment returns can be overcome by rejiggering managers.

In that case, said Ms. Graves, "You're not firing your broker - you're firing the money manager."

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