May Day



Refers to May 1, 1975, when brokerages changed from a fixed commission for securities transactions to a negotiated one. Previous to this, commissions were standard from broker to broker.


At the time, the majority of Wall Street felt that these changes would have little effect on their commisions. However, shortly after the switch, Charles Schwab pioneered what are now known as discount brokerages, which charged much lower fees, and in some cases none at all - known as no-advice accounts. As a result, the number of individual investors expanded greatly. This was the first step in the creation of the discount brokerage houses that we know today.

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