UK-based LGT Wealth Management has become the first European wealth manager to adopt pass-through voting technology, allowing clients to influence stewardship decisions within passive pooled-fund investments.
Pass-through voting gives fund investors a say in critical corporate decisions, a shift from the traditional centralized voting model where asset managers acted on behalf of clients using standardised policies.
The firm is leveraging ProxySphere technology developed by fintech Tumelo, in collaboration with asset manager Legal & General and investment service provider State Street Global Advisors, to implement the voting framework.
This step comes amid growing regulatory pressure in the UK for trustees and wealth managers to take greater ownership of stewardship practices, as the rise of passive investing has concentrated significant voting power in the hands of a few large asset managers, shared the firm.
Northern Trust rolls out proxy voting choices
Siobhan Archer, global stewardship lead at LGT Wealth Management, commented: “This is an important move for us. By adopting pass-through voting, we can better uphold our commitment to enhancing and preserving assets for our clients while creating long-term value for the economy, environment and society. We believe pass-through voting is rapidly becoming a key mechanism in investors’ stewardship toolkits and an effective way to complement our engagement efforts with managers.”
Edd Micklem, VP of investor partnerships at Tumelo, added: “We’ve already seen UK pension funds adopt pass-through voting via our partnership with LGIM. It’s exciting to see asset managers also collaborating with their wealth clients in this way. Wealth managers are paying much closer attention to the degree of voting alignment within their portfolios, particularly on environmental and social issues, so we are thrilled to enable them to take action.”
Mark Johnson, head of institutional clients at asset management, Legal & General added: “This is a progressive and an exciting partnership, many investors, especially those focused on sustainability issues, want their investments to align with their values. Pass-through voting allows greater freedom to vote in accordance with their own priorities and preferences.”
