JPMorgan’s asset management business will no longer use third party proxy advisory firms for managing voting for U.S. companies, with the firm turning instead to a newly launched AI-powered platform according to a company memo seen by ESG Today.
According to the memo, the move makes JPMorgan the first major investment firm to end the use of external advisors for U.S. proxy voting.
J.P. Morgan Asset & Wealth Management is one of the largest global investment managers, with over $4.5 trillion in AUM. Going forward, the company will now utilize Proxy IQ, a new AI-powered launched by the firm on its Spectrum investment data platform, to cover all aspects of the voting process in the U.S. According to the memo, Proxy IQ will aggregate and analyze proprietary data from more than 3,000 company annual meetings, eliminating the need for third party data collection and voting recommendations.
The proxy advisory business is largely dominated by two firms, Glass Lewis and Institutional Shareholder Services (ISS). The move by JPMorgan comes as the firms face growing pressure from lawmakers and regulators in the U.S., who have targeted them as part of a broad anti-ESG campaign.
In December, President Trump issued an executive order directing several U.S. federal agencies to increase oversight of the proxy advisory firms, and to investigate them for violating antitrust, unfair competition and deceptive practices laws, noting that the two companies account for more than 90% of the proxy advisory market, and claiming that they “regularly use their substantial power to advance and prioritize radical politically-motivated agendas,” specifically highlighting ESG and DEI.
Trump’s executive order followed lawsuits and investigations launched by Florida and Texas, and a warning from SEC Chair Paul Atkins of plans to examine and propose actions focused on the role of proxy advisory firms over the “weaponization of shareholder proposals by politicized shareholder activists.”
Glass Lewis recently announced plans to significantly change its delivery of research and voting recommendations, including no longer providing singular voting advice to clients, noting that investors in the U.S. and Europe are diverging on issues including sustainability and corporate engagement.
