The romance of commercial and investment banking is starting to cool at many major financial institutions. The most overt sign of fracture to date was the decision by FleetBoston Financial Corp. in mid-April to sell off its Robertson Stephens investment banking unit. But knowledgeable observers of the financial services industry believe it's only a matter of time before other banks - principally the large regional operators - join the exodus. Disenchantment has set in, they say, because merger advice, securities underwriting, and corporate finance haven't, except at behemoths like Citigroup and J.P. Morgan Chase, delivered the synergistic or financial bang once envisioned from harnessing full-service capabilities. It's no coincidence that FleetBoston pulled the plug first. Economist and banking consultant Alan Gart says that the bank has been shocked simultaneously by a loss on Latin American operations because of turmoil in Argentina and the slide in the IPO and merger business at technology-heavy Robertson Stephens. "There is a tremendous overhead in investment banking," he comments. "These guys get paid big salaries plus bonuses. They (FleetBoston) are not used to dealing with things like that." Pointing out that commercial banks don't like "cyclicality of earnings," Gart looks for "squeamish" management either to shed their investment banking arms or bulk them up for economies of scale. "Either you get bigger in the business or you get out of the business," he says. "Unless you are broad-based, you may not be able to handle the pain." Regional commercial banks weren't all that eager to get into pure investment banking in the first place, according to Eric W. Aboaf, vice president and a financial services expert at Bain & Co. When they bought regional investment banks, he says, they really wanted the asset management and retail brokerage units but had to take the m&a, underwriting, and capital-raising functions as well. "It was a lot cheaper to get into asset management by buying one of these investment banks than by buying an asset manager that was trading at a p-e multiple of 25," he says. "The investment banks had multiples of 15." The banks also have reached the realization that middle-sized client companies don't execute enough mergers or sell enough securities to make the units pay so "having a mid-market investment bank is just not that valuable," Aboaf says. By contrast, international giants like Citicorp and J.P. Morgan Chase have reaped impressive payoffs from bundling investment and commercial banking operations and aiming them at big corporate customers who can tap both sides of the business repetitively. "They have taken it head on," he says. Aboaf expects the regionals to hang on to the asset management and brokerage units but either sell off the investment banking functions or put them into holding companies. The question mark hanging over the future of investment banking within commercial banks represents another indication that many institutions are moving away from the concept of becoming financial supermarkets. And unsettled times are expected to be the rule. Gart notes that many banks already have gotten out of credit cards and mortgage banking and are continuously reviewing their lines to determine where they want to compete or depart. Aboaf says that ultimately the regional survivors will have strong core operations in retail banking, and another three to four lines where they have mass or special expertise. But he sees the banks going through continual evolutions to keep abreast of constantly changing consumer behaviors. "We're going to continue to see waves of amalgamation and combinations on the one hand, and waves of focus on the other through sales of divisions," he forecasts. "Consumer behaviors have changed over each of the last few decades, and they will continue to change."