Is your client in a wrap program, despite being a low-volume trader? Read about reverse churning
I work for a dual registered broker-dealer/investment advisor. Recently we underwent an examination and during the exit interview the examiner mentioned that he had some concerns over what he called reverse churning. Im not sure I understand what he was getting at, since I always thought of churning as excessive trading. How can an account be traded too little? It almost sounds like the examiner wants the client to pay more. Can you help make sense of this for me?
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