Supermarkets put more choices on the shelves

Until recently, the much-heralded financial supermarkets have been more like gourmet shops of the well-to-do. Only those with $10,000 to $20,000 bankrolls could secure a cart full of central asset account goodies. Brokerage firms were the major vendors.

Now competition has emerged as banks and mutual funds jump in, and the minimum investment tag is comes down. While the upscale market remains the most popular target audience, some banks and mutual funds are offering these omnibus accounts for the corner-store price of $1,000.

For all such accounts, the basic package includes these items:

* Money funds (as many as three to chose from: taxable money market, tax-free , and government securities).

* Free, unlimited checking.

* A debit card (usually Visa) and/or a charge card (American Express Gold Card or MasterCard Gold Card).

* Brokerage services (discounted if it is a bank- or mutual fund-based account).

Integral to the accounts is the ''sweep.'' With this feature all dividends, interest, and deposits to checking are regularly swept into the money fund for higher-interest earnings. Most also include a monthly comprehensive statement (sometimes instead of returning canceled checks) giving all the account activity.

Merrill Lynch originated the concept in 1977, but it wasn't until late in 1981 that other brokerage firms begin to offer similiar services - and by then it was almost too late. Today, Merrill Lynch has some $75 billion tied into its accounts, and it has almost ten times as many accounts as it's nearest competitor, Dean Witter.

''Merrill Lynch says it is the most wonderful new securities business generator ever developed. It's attracting the kind of investors they've always courted,'' says Glen Parker, of the Institute of Econometric Research in Fort Lauderdale, Fla. ''Merrill Lynch got there first and I think a lot of interested people went there first. Everyone else is trying to get their clients back. Other brokerages are growing, but they're not actually taking a very big hunk of the whole. Many will deny it, but these accounts are being deemphasized. You just don't see the push at some brokerages.''

The reason?

Merrill Lynch has skimmed the cream. ''The $20,000 accounts are in a mature phase of their product life. The rate of growth of the new accounts is slowing already,'' explains Nicholas Kaiser, president of Unified Management Corporation , an Indianapolis-based mutual fund company.

Banks and mutual funds see a broader audience yet to be tapped. ''Bradford Trust (in New York) did some research showing that if you cut the minimum investment from $20,000 to $5,000, the market expands by a factor of four. Banks are looking at that. The study also shows that if you cut your minimum to $1,000 , the market size increases to about 20 times the size of the $20,000 market share,'' relates Mr. Kaiser. His own firm's central asset account, opened in July, has a $1,000 minimum.

The potential for banks is enormous, says Mr. Parker. ''If Merrill Lynch can make it a $100 billion business, think what 1,000 banks offering the same product can do.''

A survey last month of 285 banks and thrifts by Behavioral Science Research Corporation of Coral Gables, Fla., shows they are indeed eyeing this kind of account. Some 20 percent of the banks and 5 percent of the thrifts now have these accounts. By next year 47 percent of the remaining banks and 31 percent of the remaining thrifts expect to unveil central asset accounts, according to Bank Advertising News, which published the survey results.

For the investor, choosing between bank-based and brokerage-based accounts is still relatively simple. If you're looking for banking services and do most of your own investment research, a bank-based account is the logical choice. One criticism of brokerage-based accounts is that if you are not a stock trader, your broker might not be as interested in your account. Many see banks as offering a more personalized, service-oriented account. On the other hand, banks and mutual funds trade through discount brokerages. ''Someone used to relying upon a broker for investment guidance had better be very careful,'' counsels Mr. Parker. ''You may want a lot of information on your stocks. You may want someone following them closely for you at all times. If so, you'll probably want a full service (brokerage) - especially if you're buying new issues.'' But, he says, ''if you make your own investment decisions, I can't see what justifies paying two or three times what you'd pay a discount brokerage.''

Brokerage firms and banks are working to erase these differences. In the future, ''these accounts are going to become less and less distinguishable,'' says Parker. ''What's going to be different is how efficiently the account is handled, the fees charged (now $100 or less annually), and how often the money is swept.'' (See chart.)

Other than service problems, the caveats to the accounts are few but perhaps significant. One possible drawback is that the monthly statement lists all your financial activity. If this is your sole account, you may not want your broker to be privy to all your financial dealings. Also, the debit card could, if you were reckless, get you into borrowing trouble. It's works like a plastic check by allowing you to cash in all the assets in your account, including borrowing on margin against your securities.

After considering possible pitfalls, it may be useful to look at the available variations on the basic central asset theme. Some accounts offer:

* Monthly statements with a 99-category code for checks. Each check can have a two-digit code to designate tax or budget expenses. The purpose is to make tax filing easier by giving a month-by-month record of financial activity.

* Automatic bill payment.

* Home computer access: to monitor the account, get stock information, or make internal transfers.

* Insurance on assets of up to $25 million.

* A catalog of products you can buy by phone.

* Buying or selling of precious metals. Some banks offers storage, too.

Merrill Lynch's Mr. Flynn calls these add-ons ''bells and whistles.'' It claims what customers really want is a ''clear concise statement. We've spent the last 18 months simplifying our statment,'' he says.

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