There was a time when Wall Street was a club, a place where family connections helped make people rich.
Now the club has just about disappeared, toppled by a mouse - a computer mouse. Thanks to technology, Wall Street is undergoing one of the biggest changes since the days of ticker tape.
Call it the "democratization" of investing.
Trading, which started in 1792 under a buttonwood tree on the corner of Broad and Wall, is moving onto the Internet - a shift underscored this week when Merrill Lynch & Co. announced a low-cost online service for its customers.
That, coupled with a move toward round-the-clock trading, will likely involve the ordinary American even more in the market - changing the culture of Wall Street in unknown ways.
Now online companies offer ordinary investors the possibility of getting in on the ground floor. And the markets are moving toward longer hours, giving average investors the same trading opportunities as wealthy investors.
"We're seeing a revolution in retail investing," says Shawn Johnson, director of research at State Street Global Investors in Boston.
Already, one-third of all retail stock trades are done online, estimates Gomez Advisors Inc. in Concord, Mass., an independent authority on the Internet delivery of services.
Part of the draw is the big savings. To trade 100 shares of IBM could cost an investor $150 in commissions at a full-service brokerage house. On the Internet, it can be as low as $7.
"Any money you don't spend on commissions means a bigger chunk going towards investments," says Barb Roper, director of investor protection at the Consumer Federation of America.
The low cost is one of the main reasons Michael Walsh, a commercial banker from Westchester County in New York, is opening an account at San Francisco-based Charles Schwab & Co.'s midtown New York branch.
Goodbye to brokers
"I think I get enough information on my own," he says, complaining that his former broker at Merrill Lynch never called him and said, "I have a good idea" of a stock to buy.
At Schwab, a steady stream of customers - mostly office workers on their lunch break - stop in to use computer terminals to get quotes or make trades. One of those is Marvin Usatine, an electrician from New Jersey, who uses the Internet to trade stocks once or twice a week.
Although he still has an account at a full-service broker, he mainly talks to his broker when the market is volatile. "When stuff is happening in the market, he soothes me," he says.
For the most part individuals who use the Internet are self-directed. Gomez estimates there are now some 7.5 million online accounts. By the end of the year, it predicts there will be 10.5 million. Many of these new accounts are from young people who have never entered a brokerage house but are comfortable using the Internet.
Many individuals are going online by way of their self-directed retirement plans. Almost half of investors 401(k) accounts at Fidelity Investments use the Internet in managing their accounts.
"The combination of ease and reduced costs has opened up trading to a whole new slew of investors," says Mr. Johnson of State Street. "How many 22-year-olds have a brokerage account? Now, they have no problem doing this."
At InteractiveBrokers.com, the mix of investors goes from doctors and lawyers to ordinary workers. At the firm, one of the appeals of online trading is access to the markets. "No one has faster access than the next guy," says David Downey, an executive at the Timber Hill Group, LLC, the parent of Interactive.
The addition of new investors is good for the markets - adding more buyers and sellers. "When entering and exiting the market is very inexpensive, about the price of a couple of Big Macs, it brings lots of liquidity to the market," says Jeff Welter, who heads stock trading for American Express Financial Advisers in Minneapolis.
As more individuals use the Internet, the pressure is building for longer hours. Last week, the National Association of Securities Dealers approved a plan for evening hours, remaining open until 9 or 10 p.m.
However, long-time market observers doubt there will be a huge demand.
"I'm not sure thousands of people want to trade 24 hours a day," says Richard Torrenzanno, a former senior executive at the New York Stock Exchange who now heads his own public-relations firm.
"Maybe some people will want to trade when they come home from work, but the vast bulk of people will want to do it during normal hours," he says.
Mr. Torrenzanno, who was at the NYSE during the 1987 crash, worries that many of the new online investors will get "badly burned" when the stock market turns bearish.
The growth of online services also means investors can get information on new companies the same as institutional investors.
For example, when a company plans to issue stock, the officers often travel around the country, meeting with securities analysts and large institutional investors. Now, Direct Stock Market, a Los Angeles firm, is presenting "virtual roadshows," on the Internet.
"With people-powered markets, you have to be able to reach investors in Des Moines, Iowa, who don't have the time or money to travel to New York for a road show," says Clay Womack, the firm's chief executive officer.
With all the Internet activity, regulatory authorities are on the alert for fraud.
Last August, the Federal Trade Commission, in a report, said the Internet had become a "breeding ground" for fraud. Con men who normally would use the telephone or direct mail are embarking on online scams. Last year, the Securities and Exchange Commission formed an Internet enforcement division. Initially, it was receiving about 120 complaints per day.
Ms. Roper of Consumer Federation says she now receives e-mail solicitations to buy stocks in start-up companies.
"It's real dangerous out there," she warns. For example, many people are now getting their investment advice from Internet chat-room groups. "Why would you take investment advice from a stranger?" she asks.
Roper complains that many investors using the Internet are not very sophisticated. She says a recent poll found that only 12 percent of the investors polled could tell the difference between a growth stock (a fast-growing company such as Microsoft) and a value stock (often companies in traditional industries whose shares are undervalued). "Should they be picking their own stocks if they don't know?" she asks.
Mr. Womack says one solution to the fraud problem is education. His web site (www.directstockmarket.com) includes an education section on how to invest in early-stage companies.
"We have taken a position that an informed investor is a protected investor," he states. "Fraud is number one on our list of concerns."
* Neil Irwin contributed to this story from New York.