JPMorgan is cutting off proxy advisory firms and doing it without delay. The bank’s asset-management arm confirmed on Wednesday it has ended all ties with external proxy advisers, effective immediately.
The unit manages more than $7 trillion for clients and must vote shares at thousands of public companies every year. The decision lands while the proxy advisory business sits under pressure from the Trump administration, which ordered regulators to examine the sector.
Starting this proxy season, JPMorgan will rely on an internal AI platform called Proxy IQ for voting at U.S. companies. A memo allegedly seen by The Wall Street Journal says the system will run the voting process and review information from over 3,000 annual shareholder meetings.
The platform will also send vote recommendations directly to portfolio managers. Those jobs were traditionally handled by proxy advisers.
JPMorgan replaces proxy advisers with Proxy IQ
The memo says JPMorgan believes it is the first large investment company to fully stop using outside proxy advisers. The company had already moved away from using them for voting advice and shifted that work to its internal stewardship team. Proxy IQ now replaces the remaining roles that advisers played in research, analysis, and vote execution.
Proxy advisors like Institutional Shareholder Services and Glass Lewis sell research, advice, and voting systems to investors who must cast large volumes of shareholder votes, and their services are widely used across the industry.
Glass Lewis later announced it would end its broad benchmark voting recommendations in 2027 and added that it will focus instead on custom advice tailored to individual clients.
Large asset managers often run internal teams, while smaller companies on Wall Street depend more on proxy advisers. ISS and Glass Lewis dominate this market and operate as a two-firm stronghold in corporate governance advice, as their recommendations have long angered corporate leaders and other critics over claims that proxy advisers hold too much influence over shareholder votes and operate with conflicted business models.
In December, Cryptopolitan reported that President Donald Trump signed an executive order directing securities and antitrust regulators to investigate proxy advisory firms.
ISS had responded to Trump’s executive order by saying it does not dictate corporate-governance standards and that its institutional clients make their own voting choices.
Jamie Dimon, the CEO of JPMorgan, has been one of the loudest critics. At an industry event last spring, Jamie said proxy advisers were “incompetent” and “should be gone and dead, done with.”
The smartest crypto minds already read our newsletter. Want in? Join them.
Source: https://www.cryptopolitan.com/jpmorgan-to-use-ai-for-proxy-advisory/
