Dan McConnell, the man who put stockbrokers in banks and thrifts across the country, was in Washington last week to visit with federal regulators and to talk with this writer about Invest -- the company he founded three years ago and kept afloat when it was sinking in a sea of red ink.

After spending $19.8 million to get Invest going, McConnell said, its backers are pleased to see the business in the black. Invest posted a $1 million profit for the quarter ended Sept. 30 and McConnell expects a $4 million profit for the full fiscal year.

It's been uphill all the way.

The securities industry did not take kindly to the idea of banks selling stocks and bonds and responded with a lawsuit. Bankers themselves often were reluctant to join the Invest operation. Customers have been slow to discover that they could get investment services at their bank instead of their brokerage house.

Of the brokerage community, McConnell said: "They were almost contemptuous of us. They thought we were a joke." Even now, he suspects, "We're not keeping anyone at E.F. Hutton awake at night worrying . . . but we may be, in a couple of years."

McConnell is an intense 48-year-old Canadian with 20 years of experience in international investment banking. A former senior partner at Greenshields Inc. in Toronto, he is an avid golfer and a man who hates cold weather. McConnell now lives in Tampa, Fla. and, friends said, is preparing to apply for U.S. citizenship.

McConnell said the idea for Invest grew out of a 1980 meeting with a Florida savings and loan that wanted to provide free brokerage services to attract customers. Driving home from the meeting, he recalled, the idea for the Invest approach suddenly came to him: "It was clear as a bell."

With the help of several thrifts, McConnell pursued his dream, and when the financial going got rough, he brought in $16 million in fresh money from the Kemper Group, Northeast Savings of Hartford, Conn., and others. Kemper now holds a 27 percent interest, while 34 thrifts own the rest.

McConnell, who earns about $200,000 a year, has stock appreciation rights that give him the equivalent of a 6 percent interest in the company.

Today, there are 240 Invest centers in 135 financial institutions, including 11 centers in four Washington-area thrifts. That is far fewer than the 2,000 centers first predicted. Organizational problems, clearinghouse problems, a lack of capital and an uncertain regulatory climate all contributed to a rocky start. Some thrifts cut back on the number of centers as other thrifts joined up.

But the bottom line, said McConnell, is that business is picking up. To prove it, he disclosed the amount of business Invest centers in Washington did this past August compared with the August before. The numbers below represent gross commissions on customer transactions at the Invest centers. The first number is the August 1985 gross commissions, the second the August 1984 gross commissions.

Columbia First Federal Savings & Loan, Washington, (three centers); $43,164 versus $9,337.

National Permanent Bank, Washington, (four centers); $92,571 versus $29,295.

Perpetual American Bank, Alexandria, (three centers); $56,196 versus $44,907.

United Savings Bank, Vienna, Va., (one center), $39,966; not open in 1984.

The increases were most dramatic at Columbia First and National Permanent, which added a center, and less so at Perpetual American, which dropped one of its centers.

Nationwide, McConnell said, the Invest centers average $18,300 a month in gross commissions. By comparison, this past August's average figures for local Invest centers were: United Savings, $39,966; National Permanent, $23,142; Perpetual American, $18,732; Columbia First, $14,388.

Invest, in short, is a franchise-style operation in which McConnell's firm -- Investment Services for America -- provides organizational know-how and advisory services for financial institutions that want to go into the brokerage business.

Each thrift keeps about 65 to 70 percent of the gross commission, which includes bonuses. Out of its share, the thrifts pay the expenses of their Invest centers, including brokers' salaries. The other 30 to 35 percent goes to Invest which, after paying its clearing agent, keeps about 20 percent.

How profitable is Invest going to be for Washington-area thrifts? Steve Kramer, Invest's regional director, said Columbia First and National Permanent have been profitable for some time. Perpetual American's operation has had "a struggle," but he said the thrift now sees a "profitable trend."

At the United Savings Bank, investment manager Donald R. Sledge said his institution expected "a reasonable profit." Of the commissions it receives, Sledge said, about half goes to pay expenses. United Savings is planning to open a second Invest center in Tysons Corner next month.

Invest calls itself a full-service firm -- as opposed to a discount brokerage, which gives no advice -- and says its fees are lower than those at regular brokerage houses but higher than at the discounters. While Invest brokers are allowed to give advice, they are not permitted to offer their own opinions about investments. They must stick to Invest's official list of recommended stocks and other investment products.

Invest brokers are salaried, earning between $20,000 and $25,000 a year. That would be considered extremely low by regular commission brokers, who typically earn upwards of $50,000 annually. Yet, Invest says, many of its brokers formerly worked for top Wall Street firms. And that's where the debate begins.

Traditional brokers contend that any broker working for those wages must be inexperienced or unable to make it at major retail firms. Invest officials respond that not all brokers make large salaries and that not all brokers want to do the hard selling that commission work requires.

Invest brokers are allowed to do the kind of prospecting for customers that regular brokers do. They can do cold-calling, enclose brochures in mail sent to depositors, or use other techniques. One clear plus for Invest is that its brokers work in the financial institution's offices, where they have access to the thrift's customers.

If a customer opens a brokerage account, the broker may suggest that he or she also open an interest-bearing account so that the proceeds of any trade can be deposited promptly.

United Savings Bank's Sledge said that when a customer's certificate of deposit is up for renewal, the customer may be asked whether he or she has considered alternative investments or has any questions about investments. Sledge said he has found that customers appreciate being asked and he did not think there was any question of invasion of privacy.

"We're on salary," he said. "We have nothing to gain by hard-pressing anyone. The salary gives us a freedom to make good recommendations."

Several Washington banks, meanwhile, have set up their own discount brokerage services, including NS&T, American Security and National Bank of Washington.

NS&T Bank, said president Michael F. Ryan, went into discount brokerage as a way to complete its portfolio of services for customers, not necessarily to make a profit. On the other hand, he said, the bank does not want to lose money, either. As it has turned out, Ryan said the operation is "marginally profitable" but that he believes it helps bring in people who later become bank customers.

NS&T is reasonably aggressive in trying to sign up brokerage customers. Vice president Bob McGary noted that a bank incentive program encourages tellers and other employes to get customers to open brokerage accounts. If a customer shows up with a stock dividend check or a check from a brokerage house, the customer is likely to be asked if he would like to do business with the NS&T discount brokerage. Like other discounters, NS&T's brokers handle trades but do not give advice on what stocks to buy.

The National Bank of Washington's downtown brokerage office, staffed by manager Florence Branson and associate Paul Gambal, is adorned by a sign that reads: "Sell Your Broker Short." It advises bank customers, "We don't give you investment advice but we do give you a big break on commissions."

That's the kind of sentiment that is sure to enliven Washington's battle of the brokers.