unit investment trusts

Unit Investment Trusts May Present Opportunity for Churning

At the end of the maturity period of a Unit Investment Trust, you and your financial advisor may decide to rollover the investment into a new UIT. While this is a perfectly legitimate transaction, it also opens up the opportunity for an unscrupulous broker to rollover the investment more than once — perhaps many times.

When this excessive rolling-over of a UITs is done to gain a financial advisor illegitimate fees, it’s called churning. Churning is considered a form of misconduct and may open a financial advisor up to regulatory action, fines, and disbarment from FINRA.