This article was produced 6 March 2025. 

Key takeaways: 

• A century ago, investing was conducted through hand signals and verbal agreements on trading floors, with investor accessibility restricted by virtue of high brokerage costs. 

• In the 1970s, NASDAQ launched the first electronic stock market without a trading floor, while the late 80s and 90s heralded a digitised approach in Australia as the ASX formed and the first online brokers emerged. 

• The US bid farewell to the ‘open outcry’ system on the trading floor in the early 2000s, before a new cohort of ‘neobrokers’ emerged, both overseas and locally, offering low-cost, fully digital investing experiences extending to mobile apps. 

• Today, not only has the role of brokers evolved, but investors have more control in their investment journey, with efficient, low-cost products affording access to a new generation of investors, democratising investing through lower barriers to entry. 

• It is important to do your own research before making decisions about investing. 

While many of us have come to know investing as a fully digitised experience, it wasn’t always this way. 

Over the last century, investing has evolved in a highly transformative way – from the chaotic trading floors that once defined Wall Street, to the cutting-edge apps now ubiquitous on the next-gen smartphones we all carry in our pockets.  

In fact, the first official stock market dates back to the early 17th century, in Amsterdam, clearly predating all the technology we have come to depend on in the modern era. 

Nonetheless, the passage of time has profoundly altered the way with which we embark on building our wealth by investing in the stock market. Through technological advances and emerging competition, investing has been democratised, making it accessible to an ever-growing audience, and at times, something representative of a group sentiment, driven by social media. 

The chaos of the trading floor 

Through much of the last century, investing was synonymous with the frenzy of trading floors. 

Amid a cacophony of chaos, traders stood on the floor of exchanges like the New York Stock Exchange (NYSE) — and even the six state-based exchanges that preceded the ASX — hurriedly taking notes and shouting over each other in something akin to an open-air market. 

Traders negotiated trades on behalf of brokers, who themselves received instructions by phone from their clients. On the trading floor, traders used hand signals to convey their buying and selling intentions to other traders. Known as the ‘open outcry’ system, traders would conduct trades verbally, in a process that could sometimes take several hours. 

Through the 1920s and the years that followed, investors were almost entirely dependent on their broker and the open outcry system, with little visibility as to live market conditions. Stock quotes were transmitted via telegraph and ticker tape machines, while physical slips took the form of orders. Physical share certificates served as proof of stock ownership, and it was not unusual for settlement to take weeks. 

While trading floors had strict protocols, their very nature favoured more access to institutional and high-net worth investors, who could generally afford high brokerage costs for the best brokers, especially with limited trading hours at the time. 

Electronic systems usher in a new era of online trading 

While the advent of electronic quote boards and computers harnessed efficiencies for brokers during the 1930s through to the 1960s — Australia welcomed electronic displays in 1976, followed by computer settlement in 1976 — it was the 1970s and 1980s when electronic trading truly landed. 

The pioneer for this shift was none other than the NASDAQ, which in 1971 was the first electronic stock market without a trading floor. This system relied on Electronic Communications Networks (ECN) for the digital matching and execution of trades. 

Locally, it wasn’t until 1987 when Australia's state-based exchanges merged to form the Australian Stock Exchange Limited, accompanied by its own electronic trading system, the Stock Exchange Automated Trading System (SEATS).  

One of the first markets to fully automate trading, the ASX closed its trading floor in 1990, and all stocks moved to SEATS, with the CHESS electronic sub register implemented in the mid 90s. These changes greatly improved the speed at which the market operated. Now, brokers could execute trades in seconds.  

At first, investors were afforded phone connectivity to execute trades. However, with internet access surging through the 90s, online trading platforms emerged, complete with market data previously only accessible to professional investors. These platforms were run by the first wave of ‘discount’ brokers. With lower broker fees, and accessibility from one’s own home, investing was now accessible to a much wider audience. 

Investing at your fingertips 

At the start of the 21st century, share trading went ‘fully’ electronic in the US. In 2006, the NYSE merged with Arca, creating the first all-electronic US exchange for both stocks and options, with the open outcry system phased out.  

Today you might still find traders on the trading floor at the NYSE, however, only a very small percentage of trades are conducted here, with everything done through computers running highly complex software. In some niche markets, open outcry still operates. The increasing sophistication of technology over the last twenty years has supported high-frequency trading, where computer algorithms automatically buy and sell large volumes of shares at speeds faster than humans can process. 

But as more investors turned to online platforms, a new wave of online brokers emerged. This included commission-free platforms like Robinhood, which arrived in the US in 2011, and the likes of Selfwealth, which in 2016 became Australia’s first flat-fee brokerage solution. 

In recent years, a transformative phenomenon has arrived — mobile investing. Brokers now offer apps that provide smartphone users with access to markets from any location, at any time. These apps include features once reserved for professionals. 

Today’s investors can easily diversify their portfolios, with streamlined access to international markets regardless of their location. With Selfwealth, for example, investors can access not only the local exchange, but also the NYSE, Nasdaq, and HKEX. 

A simpler, democratised investing experience 

The evolution of investing over the last century tells us that today’s experience is simpler, more efficient, more affordable, and more accessible to investors. While investing was once characterised by limited market participation, today’s affordable points of entry ensure mass retail participation. 

What was once a slow and cumbersome process, with many restrictions, has been redefined through technological changes, with trades executed in seconds, and a wide range of analytical features available to everyday investors. 

Brokers are still intermediaries for investors to access the market, but their role and purpose has changed. From the hands-on, relationship-based role of yesteryear, with traders operating directly from trading floors, many investors now use the online platforms and mobile apps of digital brokers to benefit from a seamless, democratised and empowered investing experience.