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​​​When a financial advisor exercises control over your account or you rely on his advice to buy and sell and excessive trading takes place, the advisor may be putting their own interest by generating a commission for themselves instead of looking out for your interests.
Factors of control include:

  • Identity, age, education, intelligence, and investment and business experience of the customer;
  • Relationship of the financial advisor and customer;
  • Customer's sophistication of the market;
  • Regularity of discussions between the financial advisor and customer;
  • Whether the customer authorized the trades; and
  • Who made the recommendations for the trades.

Regarding excessive trading, courts and arbitration panels generally look at some type of turnover rate, which indicates the account's trading volume in relation to its size.

Source :

Language : English


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