A measure of change in the composition of an investment portfolio (one consisting of stocks, bonds and other tradable securities). It expresses the frequency and volume of trading of such securities in a brokerage account.
Simply put, churn rate is the rate (turnover rate) at which trades are executed by a broker on behalf of the client, holder of a brokerage account. A high churn rate reflects a fraudulent practice known as churning, i.e., excessive trading by a broker in a client’s account mainly to generate more commissions.
