Key Facts
• SEC identified insufficient disclosure of financial advisers’ incentives by Vanguard.
• From August 2020 to December 2023, adviser bonuses tied to client retention.
• Vanguard agreed to pay $19.5 million (approx. ¥2.865 billion) without admitting wrongdoing.
• SEC noted contradictions in Vanguard’s disclosure of adviser compensation structure.
• Vanguard removed claims of prioritizing client interests from its website in 2023.
• Empower Advisory and Empower Financial Services also failed to disclose adviser incentives.
• Empower stated all SEC-identified issues have been fully resolved.
Summary
The U.S. Securities and Exchange Commission (SEC) found Vanguard Advisors failed to adequately disclose financial advisers’ incentives tied to client retention and paid services from 2020 to 2023. Vanguard agreed to a $19.5 million settlement without admitting or denying the allegations. The SEC highlighted inconsistencies in Vanguard’s public claims about its advisers’ compensation structure, which were removed from its website in 2023. Similarly, Empower Advisory and Empower Financial Services faced similar allegations but have since resolved the issues. Vanguard expressed satisfaction with the resolution, emphasizing its commitment to supporting investors.
