The future of three of the Washington area's biggest financial services companies depends on a question nobody can answer with confidence.

Investors in Capital One Financial Corp., Legg Mason Inc. and E-Trade Financial Corp. all need to know how Americans are going to manage their money in the 21st century.

Will we still do business with the bank on the corner and the stockbroker down the street? Or are nationwide brands and online access the only ways to go?

Will we be customers of a "financial supermarket" or a group of "boutiques" that cater to our specialized needs?

Will a credit card just be a credit card, or will it be the electronic key to the financial services provider of our choice?

Capital One, Legg Mason and E-Trade each have their own answers and are adopting new business strategies to prepare for the future as they see it.

E-Trade still would like to grow by acquiring one of its rivals in online financial services, although the rivals seem more inclined right now to do a deal with each other. Capitol One is moving into traditional banking and other services beyond filling your mailbox with credit card pitches. And Legg Mason seems to have decided that the local brokerage offices upon which the company was built are not in its future.

How right they are about picking their targets and how close they come to hitting them will determine how well their stocks perform in the future.

When we last looked in on E-Trade in May, the company, whose top executives are based in Arlington, had made an offer to buy Ameritrade Holding Corp., one of its top rivals in online financial services. Now, E-Trade has bettered its bid, but Ameritrade is still saying "no thanks." Instead, Ameritrade is talking now to TD Waterhouse USA, the third big player in their niche. Last year, E-Trade made a run at Waterhouse, which is owned by Canada's Toronto-Dominion Bank, but the two companies called off the deal on Jan. 19.

E-Trade's advantage is that it has both an online stock trading business and the nation's biggest online bank. Ameritrade is solely a broker, while Waterhouse is a hybrid, with online and branch-based operations.

The ideal merger would be to meld all three firms into an industry powerhouse, but egos, money and the tricky job of driving a troika stand in the way.

After building itself into the nation's fifth largest credit care issuer, McLean's Capital One is buying a bank and building up its car loan, home-equity loan and overseas lending operations in an effort to avoid being labeled what industry experts call a "mono-line credit card" operation.

"It's clear that the mono-line credit card company isn't long for this world," says Chris Brendler, an industry analyst for Legg Mason.

Capital One chief executive Richard D. Fairbank doesn't see the situation so starkly but he envisioned a new world when he announced in March the acquisition of Hibernia Corp., a big New Orleans bank. "The consumer lending markets are moving inexorably," Fairbank said, "from local scale and local brand on the corner to national platforms that can leverage the benefits of scale, brand, multi-channel marketing and data-driven underwriting."

The "local brand on the corner" that Fairbank mentioned is an apt description for the brokerage business of Baltimore's Legg Mason. Chairman Raymond A. "Chip" Mason founded his firm as a regional stock broker and built it into one of the biggest in the mid-Atlantic region, with 1,500 brokers and 135 offices.

But the brokerage operations are overshadowed today by Legg Mason's mutual fund and money management operations. They have become the tail that wags the dog, producing almost 70 percent of Legg Mason's revenue. Legg Mason money managers handle $373 billion for pension funds, endowments, other institutional investors and mutual fund investors. The assets managed by that business grew 30 percent in the past year, while brokerage revenues grew 2 percent.

All of which explains recent reports that Legg Mason is in talks to swap its network of stock brokers for the management and funds business of Citigroup Inc., the world's biggest publicly traded financial institution. (Legg Mason and Citigroup declined to discuss their talks.)

If simply being a stock broker or a credit card company is not a good model for the future, neither is the concept of an all-purpose financial supermarket. And that's widely viewed as Citigroup's motivation for talking to Legg Mason.

In addition to Citibank, Citigroup's operations include Smith Barney, the investment banker and stock broker, and Travelers insurance. Part of Travelers was sold in 2002 in what was viewed as the first sign that Citigroup believed the supermarket concept had been stretched too far.

Now the talk is that Citigroup would like to get out of the money management and mutual fund business. Wholesale money management doesn't fit into the retail strategy the company is pursuing.

Still, analyst Matt Snowling of Friedman, Billings, Ramsey Group Inc. is skeptical of reports that Citigroup will swap its $460 billion asset management and mutual fund business for Legg Mason's brokers.

"Legg Mason traditionally has not gone after deals to build managed assets," he said. In the past, Legg Mason has bought small but growing money management firms, then built them up -- a cheaper and potentially more profitable strategy than buying big batches of assets to manage.

Snowling also cautions that "Citi's funds are not up to Legg Mason standards." Many have underperformed the stock market indexes -- in contrast to Legg Mason's vaunted Value Trust fund, which has beaten the Standard & Poor's 500 stock index 14 years running. And asking Legg Mason's highly regarded fund managers to invest twice as much money as they now manage would be risky: When you're dealing with hundreds of billions, the more money you have to manage, the harder it gets.

Pointing out that Merrill Lynch also looked at buying the Legg Mason brokerages a year ago, Snowling said that deal faltered because Merrill concluded the branches and brokers weren't all that desirable.

There's a down side too for Legg Mason in spinning off its brokers, because they retail the company's mutual funds. Any deal for the brokerage would need to include a new distribution system for the mutual funds -- an ideal job for Smith Barney.

If Legg Mason and Citigroup do a deal, it's probably not going to be as simple as the one that's been described in published speculation, which many people believe was a trial balloon. A smaller-scale swap may be more likely.

So for Legg Mason, E-Trade and Capital One, the question these days is what they want to be when they grow up.

Legg Mason clearly wants to be a money manager.

Capital One hopes to transform itself from into more than just a credit card company so it does not someday become the credit card division of a company that's bigger and more diversified.

And E-Trade's desire is to be the dominant player in e-finance, lest it too be acquired by some giant.

Consumer lending markets are moving toward national platforms, Capital One chief executive Richard D. Fairbank says.