- noun a practice employed by stockbrokers, where they buy and sell on a client’s discretionary account in order to earn their commission. The deals are frequently of no advantage to the client.
- noun a practice employed by insurance salesmen where the salesman suggests that a client should change his or her insurance policy solely in order to earn the salesman a commission
(written as Churning)Excessive trading by a broker in a client's account to produce the appearance of meaningful activity, or to increase commissions. Churning is defined as fraud by the Securities and Exchange Commission, as it creates a conflict of interest on the part of the broker, and may result in clients being charged for activities or services that are not to their benefit.
(written as Churning)Refers variously to such practices as the transfer of patients between l ong-term care hospitals and co-located acute care hospitals simply for financial gain. It is also used as a synonym for staff turnover. The term originates in financial markets (where it is also referred to as 'twisting') - an unethical practice by brokers to increase their commissions by excessively trading on a client's behalf or by convincing policyholders to drop their old coverage and switch to a new insurance policy merely to gain the commission.