This site may contain affiliate links. We may earn a commission if you sign up through our links. Content is for educational purposes only and is not financial, investment, tax, or legal advice. Consult a qualified professional before making financial decisions.

Back to Glossary

Churning

Compliance & Ethics

An unethical and often illegal practice where a broker excessively trades securities in a client's account primarily to generate commissions rather than to benefit the client. This practice violates the broker's fiduciary duty and can result in significant costs and potential losses for the investor. Signs of churning include frequent trades that don't align with your investment strategy.

Related Terms