London's first stockbrokers were banned from the Royal Exchange for rudeness.
The word "broker" comes from the Anglo-French brocour, meaning a retail dealer or peddler, someone who served as an intermediary in small transactions.1 By the late seventeenth century, when trading in government debt and company shares expanded in London, a new class of intermediaries emerged to handle the buying and selling. They were called stockbrokers.
Their reputation was poor from the start. In the 1690s, stockbrokers were expelled from the Royal Exchange for their aggressive and disorderly behavior. They relocated to the coffeehouses of Exchange Alley, particularly Jonathan's Coffee House, which became the de facto trading floor for securities.2
Parliament passed the Brokers Act of 1697, requiring all brokers to be licensed and capping their number at one hundred. The legislation also prohibited them from trading on their own accounts, though this rule was widely ignored.3
In New York, the Buttonwood Agreement of 1792 established a set commission structure among 24 brokers, forming the nucleus of what would become the Stock Market on Wall Street.4 Fixed commissions persisted in the United States until May 1, 1975, known on Wall Street as "May Day," when the Securities and Exchange Commission deregulated brokerage fees.5
Charles Schwab founded his discount brokerage firm in 1975, the same year commissions were deregulated, offering trades at a fraction of the price charged by full-service firms. By 2019, most major brokerages had eliminated commissions on stock trades entirely, a shift accelerated by the launch of Robinhood in 2015.6