SEC Charges Empower Advisory Group, LLC and Empower Financial Services, Inc. for Failing to Adequately Disclose Conflicts of Interest to Retirement Plan Participants

ADMINISTRATIVE PROCEEDING
File No. 3-22517

August 29, 2025 – The Securities and Exchange Commission announced today that it has filed a settled administrative proceeding against Empower Advisory Group, LLC and Empower Financial Services, Inc. (collectively, Respondents) for inadequately disclosing conflicts of interest and making misleading statements when advising retail investors to enroll in Empower Advisory’s Managed Account service, a fee-based advisory service that provides retirement plan participants with ongoing discretionary portfolio management of their in-plan retirement accounts. Plan participants enrolled in the service pay Empower Advisory a quarterly asset-based fee as negotiated by the plan sponsor.

According to the SEC’s order, from July 2019 through December 2022, Respondents employed retirement plan advisors, all of whom were both registered representatives associated with Empower Financial Services and investment adviser representatives with Empower Advisory. The order finds that Respondents used a compensation system that financially incentivized certain retirement plan advisors, with bonuses and merit raises, to enroll plan participants in the Managed Account service.

Empower Financial Services, according to the order, failed to provide full and fair written disclosure of whether retirement plan advisors were acting as a registered representative or an investment adviser representative when recommending that a plan participant enroll in the Managed Account service. Additionally, the order states that Respondents did not adequately disclose the conflicts of interest that the incentive compensation system presented for certain retirement plan advisors. This omission rendered misleading certain statements made by retirement plan advisors to plan participants, including that they were salaried or noncommissioned. Some retirement plan advisors also told plan participants that they were acting in a fiduciary capacity and that they were acting in the plan participant’s best interest while not disclosing their financial incentive to enroll the plan participant in the Managed Account service. The order finds that these statements assured plan participants that retirement plan advisors were providing disinterested advice when they enrolled their in-plan retirement accounts into the Managed Account service but failed to disclose their financial incentives to do so. Finally, the order finds that Empower Financial Services failed to establish, maintain, and enforce written policies and procedures reasonably designed to identify and address conflicts of interest in connection with recommendations to enroll in the Managed Account service.

The order finds that Empower Advisory violated Section 206(2) of the Investment Advisers Act of 1940 and Empower Financial Services failed to comply with the Disclosure and Conflict of Interest Obligations of Regulation Best Interest, thereby violating the regulation’s General Obligation. Without admitting or denying the SEC’s findings, Empower Advisory and Empower Financial agreed to the entry of an order that censures Respondents and requires them to cease and desist from committing or causing violations of the provisions above, requires Empower Advisory to pay $4,063,569.80 in disgorgement and $426,400.14 in prejudgment interest, and requires Empower Advisory and Empower Financial Services each to pay a civil penalty of $750,000. The ordered monetary relief will be distributed to affected plan participants.

The SEC’s investigation was conducted by Rebekah Broe, Bill Dixon, and Katie Shelton, with assistance from Senior Trial Counsel Kristin Murnahan, and supervised by Natalie Brunson and Justin Jeffries, all of the SEC’s Atlanta Regional Office.