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Finance Glossary

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Over 700 finance terms, Shmooped to perfection.

Churning

Definition:

That feeling in your gut when you're long and the market is going down. But for The Seven, it is an illegal activity that unscrupulous brokers do to garner ill-gotten commissions. Churning is making more trades than are justifiable economically; churners "over trade" a client's account so that they can collect more commission than they should. Registered Advisors have a fiduciary duty to clients to act in the clients' best interest. You'd think that shouldn't have to be made explicitly but sadly it does.

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