Vanguard Advisers Inc. has agreed to pay $19.5 million to resolve allegations by the U.S. Securities and Exchange Commission (SEC) that it failed to properly disclose financial incentives tied to enrolling customers in personal financial services.
According to the SEC, from August 2020 through December 2023, Vanguard incentivized its advisers to enroll and retain clients in fee-based services by linking year-end performance goals and bonuses to client retention. The agency said Vanguard did not adequately inform clients about how advisers were compensated, and some disclosures included contradictory statements, as outlined in the SEC’s cease-and-desist order.
The company’s website had described its advisers as salaried employees who did not work on commissions and had “no outside incentives, so they’ll always put your interests first.” The SEC noted these statements were removed from the site in 2023.
In a statement Friday, Vanguard said: “Vanguard is committed to supporting everyday investors and retirement savers. We are pleased to have reached an agreement to put this matter behind us.”
Without admitting or denying wrongdoing, Vanguard settled the claims with the SEC.
Separately on Friday, Empower Advisory and Empower Financial Services—two units within retirement plan recordkeeper Empower—agreed to pay a $750,000 penalty along with nearly $4.5 million in disgorgement and interest after being accused of failing to fully disclose adviser compensation arrangements for government retirement plan participants between July 2019 and December 2022. The SEC stated that Empower’s advisers were incentivized by bonuses and raises for enrolling customers in fee-based managed account services but did not sufficiently communicate this conflict of interest.
Empower spokesperson Stephen Gawlik said: “The SEC acknowledged Empower’s significant remediation efforts and substantial cooperation with the SEC staff during the investigation.” He added: “All of the issues identified by the SEC have been fully remediated,” noting that no participants were found to be harmed according to the SEC.
This story was originally published August 29, 2025 at 9:04 PM.
