Wells Fargo Wealth & Investment Management (WIM), one of the largest wealth managers in the U.S., with $2.5 trillion in client assets, announced the launch of a new proprietary system to internally manage proxy voting.
The move makes Wells Fargo the second major U.S. asset manager to reduce reliance on external proxy voting firms, which have recently come under fire from anti-ESG politicians for supporting climate and DEI shareholder resolutions.
According to Wells Fargo, under its new approach, the firm will direct proxy voting for client assets where it has both investment discretion and voting authority “based on its own custom policy and voting instructions focused on clients’ long‑term economic interests,” which the firm added will bring “increased independence,” and reduce its reliance on third parties.
Darrell Cronk, Chief Investment Officer at WIM, said:
“Offering an in-house proxy voting service allows us to take more direct responsibility for our proxy voting approach and underscores our dedication to delivering the most innovative and effective solutions for our clients.”
The proxy advisory business is largely dominated by two firms, Glass Lewis and Institutional Shareholder Services (ISS).
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.”
Earlier this month, JPMorgan announced that its asset management business will no longer use third party proxy advisory firms for managing voting for U.S. companies, with the firm launching a new AI-powered platform to handle its U.S. voting processes.
According to a Wall Street Journal report citing a person familiar with the matter, Wells Fargo has also cut ties with ISS.
As part of the launch of its new system, Wells Fargo said that expanded its relationship with fintech solutions provider Broadridge, and will be using Broadridge’s technology platform to support the administration of its proprietary voting service and vote processing.
