In the City of London, it’s the ultimate sartorial faux pas. “Never wear brown in town,” runs the adage about what shoes the gentlemen of London’s financial district must eschew in order to escape the opprobrium of colleagues.

This unwritten rule works to the disadvantage of people from less affluent backgrounds, according to a study by the government’s social mobility commission.

The commission found that graduates with first-class degrees from elite universities are being “locked out” from jobs in investment banking if they commit the cardinal sin of wearing brown shoes. The same goes for those who appear uncomfortable in a suit, wear a loud tie, or lack esoteric qualities such as “polish” or “aura”.

According to the report, catchily titled Socio-Economic Diversity in Life Sciences and Investment Banking, such rigid criteria have “set up barriers for individuals from non-privileged backgrounds”.

Leadenhall Market, in the heart of the City, is where hundreds of financial hotshots spend their lunch breaks, grabbing gourmet sandwiches from a clutch of hole-in-the-wall cafes or sinking pints of lager in one of its historic pubs.

While there are plenty of brown shoes in evidence, most people passing through are well aware of the unwritten regulatory framework governing footwear.

“Brown in town isn’t done, it’s just sartorially wrong,” says Mark Baker, who works with many financial services firms for IT company IPsoft. “The guys in Savile Row would turn in their graves. It’s important to dress appropriately based on the clients you work with.”

Jason Meyers, 43, whose design and construction firm counts several financial services companies among its clients, is aware of the rulebook but isn’t a fan. Referring to a pair of high-end shoemakers, he says: “If you work in insurance they won’t let you through the door of [insurance market] Lloyd’s of London without a pair of black Church’s or Cheaneys.”

“I’ll put on my black shoes if I’m meeting a client in finance or insurance. You’re looked at like a bit of a spiv if not.”

When it comes to job interviews, he says some employers discriminate against those who weren’t raised in an environment where the colour of one’s shoe leather was deemed important. “It’s the City, so of course there’s a class issue.”

Dress down Friday? Nope. Photograph: Graeme Robertson/The Guardian

And where class is an issue, schooling is never far behind. Meyers adds: “If you’ve been to Eton or Winchester the interview is practically a formality anyway. If one candidate has been to Eton and the other to a comprehensive, the guy from Eton gets the job. If both candidates have been to Eton but one is wearing brown shoes, the other guy will get it. Of course it’s unfair, it’s bullshit. But the City will never change.”

Among some younger City workers though, there is a belief that the sartorial code is slowly becoming more relaxed. Charles Courtney, 23, a broker with currency trader Sigma Trading, is sporting a natty pair of what could be accurately described as brown hybrid slip-on tasseled brogues.

“The City is an old established place and there are a lot of rules that go back hundreds of years,” he says. “It comes with the territory. But up-and-coming firms tend to be more chilled, so it’s definitely changing. Back in the 80s, if you were wearing brown shoes you’d get booed off the trading floor.”

To those not steeped in the traditions of the London financial milieu, the brown shoe rule is an idiosyncratic quirk of Britishness. Frank van der Korput, 37, works for a Lloyds of London insurer and has had to get used to watching what he puts on his feet.

“In Holland and Italy, it’s fairly normal to wear brown shoes but here it’s like a little bit of history. The first time I came here I felt like being the Dutchman and just saying, ‘fuck it’ and wearing the brown shoes. It’s not accepted in London, not yet.

“It will work against you if you’re applying for a very good job. That’s unfair, it doesn’t say anything about how skilled you are.”

Not everybody in this part of the City knows the rules though. Rohan Chaffey, of communications firm AVMI said: “I’ve never heard of it. I work in sales and brown shoes with a blue suit is almost the uniform.”

Loafer or brogue? No matter, it’s brown. Photograph: Graeme Robertson/The Guardian

He believes interviewers judging people based on their shoes “does suggest elitism” but says that it is “important to dress for the job you want”. He adds: “It would definitely put you off if someone came in wearing a Winnie-the-Pooh tie.”

One City worker, swaying gently atop a pair of brown brogues, was even less aware of the dress code. “I’ve been on a bender for the last nine days mate, so I’m not really caring about what I’m wearing,” he says.

“My jacket doesn’t match my trousers … I’ve just put this on to show up for work. Shoes are the least of my worries.”