Abstract
Twenty-five years ago, the stockbroker was literally in the centre of the stock market. Standing on the actual market floor, following the stock prices on large notice boards, moving physically between telephones used to contact investors and the trading zones in which they shouted out their ‘desires and intentions to buy or sell’ (Baker, 1984:789). This was the familiar open-outcry auction system. Although these markets may have come across as chaotic — at times they probably were — Baker’s classic study suggested that they nonetheless contained relatively stable patterns of social interaction among the brokers. Behind the scenes, away from the bustling trading floors, you could also find a few analysts providing support to the brokers in the form of in-depth analyses of firms and industries. The brokers would assign specific tasks to analysts working for their brokerage firm when and if they felt that this was called for. Typically, however, the broker’s own knowledge of the firms and industries behind the stocks they traded was sufficient to get the work done.
Once there were no investment banks, only stock brokerage firms. There are still some small stock brokerage firms around, but many of them, maybe most, have grown or merged into full house investment banks. In the brokerage firms we [brokers] dominated, in the investment bank we’re just … just sales — a significant part, but still just one of many parts in the system.
(Stock Brokerage Manager)
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© 2012 Jesper Blomberg, Hans Kjellberg and Karin Winroth
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Blomberg, J., Kjellberg, H., Winroth, K. (2012). Brokers Selling Investment Advice. In: Marketing Shares, Sharing Markets. Palgrave Macmillan, London. https://doi.org/10.1057/9780230361621_5
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DOI: https://doi.org/10.1057/9780230361621_5
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-32783-6
Online ISBN: 978-0-230-36162-1
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